Supply chain – The COVID 19 pandemic has certainly had its impact impact on the world. Economic indicators and health have been compromised and all industries have been completely touched in one of the ways or some other. One of the industries in which this was clearly noticeable will be the farming as well as food business.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its 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 as well as food security as many stakeholders are impacted. Even though it was clear to many men and women that there was a significant effect at the tail end of the chain (e.g., hoarding doing grocery stores, restaurants closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for that will the effect is much less clear. It is thus imperative that you find out how properly the food supply chain as a whole is actually prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Need in retail up, contained food service down It’s obvious and popular that demand in the foodservice channels went down on account of the closure of places, amongst others. In some instances, sales for vendors of the food service industry therefore fell to aproximatelly 20 % of the initial volume. As a complication, demand in the retail stations went up and remained at a degree of aproximatelly 10 20 % greater than before the crisis began.
Products that had to come through abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the need for packaging changed dramatically, More tin, glass or plastic was necessary for use in consumer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major impact on production activities. In a few cases, this even meant a full stop of output (e.g. in the duck farming industry, which came to a standstill as a result of demand fall out in the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capacity that is limited during the very first weeks of the problems, and costs which are high for container transport as a result. Truck transportation encountered various problems. To begin with, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in cases which are a large number of, nevertheless, was the accessibility of drivers.
The reaction to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core things of supply chain resilience:
Using this particular framework for the analysis of the interviews, the conclusions show that few businesses were nicely prepared for the corona problems and actually mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for agility and versatility. This seems particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the capacity to do it.
Next, it was found that more interest was needed on spreading danger as well as aiming for risk reduction within the supply chain. For the future, what this means is far more attention should be made available to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but in addition to increase market shares wherein competitors miss options. This particular challenge isn’t new, but it has in addition been underexposed in this problems and was frequently not part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It’s usually unclear precisely how extra expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally replace the basic discussions between production and logistics on the one hand and advertising and marketing on the other hand, the potential future must explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?