Supply chain – The COVID 19 pandemic has definitely had its impact impact on the world. Economic indicators and health have been compromised and all industries have been touched inside one way or even yet another. Among the industries in which this was clearly apparent will be the farming and food business.
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 shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are affected. Even though it was clear to many men and women that there was a significant impact at the conclusion of this chain (e.g., hoarding in grocery stores, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors within the source chain for that the impact is much less clear. It is therefore vital that you find out how well the food supply chain as being a whole is actually armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Need in retail up, found food service down It is obvious and widely known that demand in the foodservice stations went down as a result of the closure of joints, amongst others. In certain cases, sales for vendors of the food service business therefore fell to about twenty % of the first volume. As a complication, demand in the list channels went up and remained at a level of about 10 20 % higher than before the crisis started.
Goods that had to come from abroad had their very own issues. With the shift in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic was needed for wearing in buyer packaging. As much more of this packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a major effect on production activities. In certain cases, this even meant a total stop of output (e.g. within the duck farming business, which arrived to a standstill due to demand fall-out in the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty shortly in 2020. This resulted in restricted transport electrical capacity throughout the earliest weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transport encountered different problems. At first, there were uncertainties on how transport would be managed for borders, which in the long run weren’t as rigid as feared. The thing that was problematic in situations that are most , however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this key elements of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions show that not many companies had been well prepared for the corona problems and in reality mainly applied responsive practices. Probably the most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This seems especially challenging for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capacity to do it.
Second, it was discovered that more attention was required on spreading danger as well as aiming for risk reduction in the supply chain. For the future, meaning far more attention ought to be provided to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in cases in which need can’t be met. Explicit prioritization is required to continue to meet market expectations but additionally to boost market shares where competitors miss options. This task is not new, however, it’s in addition been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona issues shows you us that the monetary effect of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is often unclear exactly how further expenses (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain works are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic discussions between generation and logistics on the one hand and marketing and advertising on the other hand, the potential future will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?