Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the planet. Economic indicators and health have been affected and all industries have been completely touched within one way or another. Among the industries in which it was clearly visible is the farming and food business.
In 2019, the Dutch extension and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was clear to many men and women that there was a huge impact at the end of this chain (e.g., hoarding around grocery stores, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors in the source chain for that will the impact is much less clear. It’s thus imperative that you determine how effectively the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need within retail up, found food service down It’s evident and widely known that need in the foodservice channels went down on account of the closure of restaurants, amongst others. In certain instances, sales for vendors of the food service industry therefore fell to aproximatelly twenty % of the first volume. As a side effect, demand in the retail stations went up and remained within a quality of aproximatelly 10 20 % higher than before the problems began.
Products which had to come via abroad had their very own problems. With the change in demand from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic was needed for wearing in consumer packaging. As more of this particular product packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had an important affect on production activities. In a few cases, this even meant a complete stop of production (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity which is restricted throughout the earliest weeks of the crisis, and high costs for container transport as a consequence. Truck transport encountered various problems. To begin with, there were uncertainties regarding how transport would be managed for borders, which in the long run were not as strict as feared. That which was problematic in many situations, nonetheless, was the availability of drivers.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary components of supply chain resilience:
To us this particular framework for the analysis of the interview, the conclusions indicate that not many businesses had been well prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This appears especially complicated for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the potential to do so.
Next, it was observed that more attention was required on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, this means far more attention should be made available to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing techniques in situations where demand can’t be met. Explicit prioritization is actually required to continue to satisfy market expectations but additionally to improve market shares in which competitors miss options. This challenge isn’t new, though it’s additionally been underexposed in this specific problems and was often not part of preparatory pursuits.
Fourthly, the corona crisis shows us that the financial result of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It is often unclear exactly how extra costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain operates are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the classic discussions between logistics and generation on the one hand as well as advertising and marketing on the other, the future will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?