Supply chain – The COVID 19 pandemic has definitely had its impact influence on the world. Economic indicators and health have been compromised and all industries are touched in one way or some other. Among the industries in which it was clearly visible is the farming and food business.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences 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 huge impact at the conclusion of this chain (e.g., hoarding in food markets, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors in the source chain for that the impact is much less clear. It is thus imperative that you determine how effectively the food supply chain as being a whole is equipped to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about thirty Dutch source chain actors.
Need within retail up, in food service down It is evident and well known that demand in the foodservice channels went down due to the closure of places, amongst others. In certain cases, sales for suppliers of the food service business thus fell to about 20 % of the initial volume. Being a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % greater than before the problems started.
Goods that had to come via abroad had their own problems. With the change in need from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic material was necessary for use in consumer packaging. As more of this particular packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a major impact on production activities. In a few cases, this even meant a full stop of production (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in restricted transport capability during the earliest weeks of the issues, and high costs for container transport as a direct result. Truck travel experienced different problems. To begin with, there were uncertainties regarding how transport will be managed for borders, which in the long run weren’t as rigid as feared. That which was problematic in most situations, nevertheless, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this primary elements of supply chain resilience:
To us this framework for the assessment of the interviews, the results show that not many organizations had been well prepared for the corona problems and in fact mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This seems especially challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capacity to do it.
Second, it was discovered that more interest was necessary on spreading threat and aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be provided to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in situations in which demand can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to boost market shares where competitors miss opportunities. This task isn’t new, though it has also been underexposed in this crisis and was usually not a component of preparatory activities.
Fourthly, the corona issues shows you us that the economic result of a crisis in addition relies on the way cooperation in the chain is actually set up. It’s often unclear precisely how further costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally change the traditional discussions between logistics and production on the one hand as well as advertising and marketing on the other, the long term will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?