Supply chain – The COVID 19 pandemic has certainly had its impact effect on the world. health and Economic indicators have been compromised and all industries have been touched in one way or even some other. Among the industries in which it was clearly obvious is the farming as well as food business.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are affected. Even though it was clear to numerous people that there was a great impact at the tail end of this chain (e.g., hoarding around supermarkets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for that the impact is much less clear. It’s therefore important to determine how well the food supply chain as being a whole is equipped to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food resources chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand within retail up, contained food service down It’s obvious and widely known that need in the foodservice stations went down on account of the closure of places, amongst others. In a few instances, sales for vendors in the food service business therefore fell to about twenty % of the original volume. Being a side effect, demand in the retail stations went up and remained within a level of about 10 20 % greater than before the problems started.
Goods that had to come through abroad had the own issues of theirs. With the change in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic material was needed for wearing in consumer packaging. As more of this product packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a major impact on production activities. In certain cases, this even meant the full stop in production (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall-out inside the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capability that is restricted during the very first weeks of the problems, and costs that are high for container transport as a result. Truck transport faced different issues. Initially, there were uncertainties about how transport would be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in a large number of situations, however, was the availability of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of this core elements of supply chain resilience:
Using this framework for the analysis of the interview, the results show that not many companies had been nicely prepared for the corona problems and in reality mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to develop the supply chain for agility as well as versatility. This appears particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capability to do it.
Second, it was discovered that more interest was needed on spreading risk and aiming for risk reduction in the supply chain. For the future, what this means is far more attention ought to be made available to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing techniques in cases in which need cannot be met. Explicit prioritization is required to continue to meet market expectations but also to boost market shares wherein competitors miss opportunities. This task isn’t new, although it has also been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the monetary effect of a crisis also relies on the manner in which cooperation in the chain is set up. It’s often unclear precisely how further costs (and benefits) are sent out in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Whether the corona pandemic will structurally switch the traditional considerations between logistics and generation on the one hand and marketing on the other, the future must tell.
How’s the Dutch food supply chain coping during the corona crisis?