Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been compromised and all industries have been touched in one way or another. Among the industries in which it was clearly visible would be the farming as well as food industry.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was apparent to a lot of folks that there was a huge impact at the tail end of this chain (e.g., hoarding doing grocery stores, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the source chain for that will the impact is less clear. It is thus vital that you find out how effectively the food supply chain as being a whole is actually armed to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It is obvious and widely known that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few cases, sales for vendors in the food service industry as a result fell to about 20 % of the first volume. As an adverse reaction, demand in the list channels went up and remained at a level of about 10 20 % higher than before the problems started.
Products which had to come from abroad had their very own issues. With the shift in desire from foodservice to retail, the need for packaging changed considerably, More tin, glass or plastic was necessary for use in buyer packaging. As much more of this product packaging material ended up in consumers’ houses as opposed to in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had an important affect on production activities. In some cases, this even meant the full stop of output (e.g. within the duck farming business, which came to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capability that is limited throughout the earliest weeks of the issues, and expenses that are high for container transport as a consequence. Truck transportation faced different problems. Initially, there were uncertainties regarding how transport would be managed at borders, which in the long run were not as stringent as feared. What was problematic in situations that are most , however, was the availability of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the main components of supply chain resilience:
Using this particular framework for the assessment of the interviews, the conclusions show that not many companies were nicely prepared for the corona crisis and in reality mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capability to do so.
Next, it was observed that more interest was necessary on spreading threat as well as aiming for risk reduction within the supply chain. For the future, meaning far more attention ought to be made available to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually required to continue to meet market expectations but additionally to increase market shares wherein competitors miss options. This particular task is not new, though it has in addition been underexposed in this specific crisis and was often not a component of preparatory activities.
Fourthly, the corona problems shows us that the economic effect of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It is usually unclear exactly how further costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally switch the classic discussions between logistics and creation on the one hand and advertising on the other, the potential future will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?