Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the planet. health and Economic indicators have been affected and all industries have been completely touched within a way or even some other. One of the industries in which it was clearly obvious will be the agriculture as well as food industry.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was clear to majority of folks that there was a big effect at the end of the chain (e.g., hoarding around supermarkets, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find many actors within the supply chain for that the impact is less clear. It is thus vital that you find out how properly the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Need within retail up, found food service down It’s evident and well known that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In a few instances, sales for vendors of the food service business thus fell to aproximatelly 20 % of the original volume. Being a complication, demand in the list channels went up and remained at a quality of aproximatelly 10 20 % greater than before the problems started.
Products which had to come from abroad had the own problems of theirs. With the shift in need coming from foodservice to retail, the demand for packaging changed considerably, More tin, cup and plastic was needed for wearing in customer packaging. As more of this packaging material ended up in consumers’ homes as opposed to in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had a major impact on production activities. In certain instances, this even meant a total stop of production (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall-out on the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down pretty soon in 2020. This resulted in restricted transport capability during the very first weeks of the problems, and high expenses for container transport as a result. Truck transport encountered different problems. Initially, there were uncertainties regarding how transport would be handled for borders, which in the long run were not as stringent as feared. That which was problematic in situations that are many , however, was the availability of drivers.
The response to COVID 19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary things of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results show that not many companies had been nicely prepared for the corona crisis and in reality mainly applied responsive practices. The most important source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for agility as well as versatility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capability to do it.
Second, it was observed that more interest was needed on spreading danger and aiming for risk reduction inside the supply chain. For the future, meaning more attention should be provided to the manner in which organizations count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to increase market shares wherein competitors miss opportunities. This task is not new, however, it’s also been underexposed in this crisis and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the financial effect of a crisis additionally relies on the manner in which cooperation in the chain is set up. It’s often unclear exactly how additional costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic considerations between creation and logistics on the one hand and marketing and advertising on the other, the potential future will need to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?