Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the planet. health and Economic indicators have been affected and all industries have been touched within one of the ways or perhaps some other. Among the industries in which it was clearly obvious will be the agriculture as well as food industry.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as many stakeholders are impacted. Though it was clear to most individuals that there was a big impact at the end of this chain (e.g., hoarding in supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), there are many actors within the supply chain for that will the effect is less clear. It is therefore vital that you figure out how well the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Demand within retail up, contained food service down It’s obvious and well known that demand in the foodservice stations went down as a result of the closure of joints, amongst others. In certain cases, sales for suppliers in the food service industry thus fell to about 20 % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained within a quality of about 10 20 % greater than before the problems started.
Goods that had to come through abroad had their very own issues. With the change in demand coming from foodservice to retail, the need for packaging changed dramatically, More tin, glass or plastic material was necessary for use in consumer packaging. As much more of this packaging material concluded up in consumers’ houses rather than in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a significant effect on production activities. In certain instances, this even meant the full stop of output (e.g. within the duck farming industry, which came to a standstill as a result of demand fall out in the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capacity which is restricted during the earliest weeks of the problems, and expenses which are high for container transport as a result. Truck travel experienced different issues. At first, there were uncertainties on how transport would be handled for borders, which in the long run were not as stringent as feared. That which was problematic in most situations, nonetheless, was the availability of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this primary elements of supply chain resilience:
Using this particular framework for the evaluation of the interview, the results show that not many companies had been nicely prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to design the supply chain for agility and versatility. This appears especially complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capability to do so.
Second, it was observed that much more interest was necessary on spreading risk as well as aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be made available to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing strategies in situations where demand can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to improve market shares in which competitors miss options. This particular challenge isn’t new, however, it’s in addition been underexposed in this problems and was often not part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the financial effect of a crisis additionally is determined by the way cooperation in the chain is set up. It’s often unclear precisely how additional expenses (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain functionality are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the traditional considerations between logistics and generation on the one hand as well as marketing and advertising on the other hand, the future must tell.
How’s the Dutch food supply chain coping during the corona crisis?