Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the planet. health and Economic indicators have been compromised and all industries are touched within one of the ways or even yet another. One of the industries in which this was clearly obvious is the farming and food business.
In 2019, the Dutch extension and food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality industry 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 lots of stakeholders are impacted. Despite the fact that it was apparent to majority of people that there was a huge effect at the tail end of the chain (e.g., hoarding around grocery stores, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find many actors in the supply chain for that will the effect is much less clear. It is thus vital that you find out how well the food supply chain as a whole is prepared to cope with disruptions. Researchers from the 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 effects of the COVID 19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Need within retail up, contained food service down It is obvious and popular that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In certain cases, sales for vendors of the food service industry as a result fell to about 20 % of the original volume. Being an adverse reaction, demand in the retail stations went up and remained at a degree of about 10-20 % greater than before the problems started.
Products which had to come through abroad had their own issues. With the shift in need coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass and plastic was needed for use in consumer packaging. As more of this particular packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major effect on production activities. In some instances, this even meant a total stop of production (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down pretty soon in 2020. This resulted in transport electrical capacity that is restricted throughout the very first weeks of the problems, and expenses which are high for container transport as a result. Truck travel encountered various issues. Initially, there were uncertainties regarding how transport would be handled for borders, which in the long run were not as strict as feared. The thing that was problematic in a large number of instances, nonetheless, was the accessibility of drivers.
The response to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of the key elements of supply chain resilience:
To us this framework for the evaluation of the interviews, the results show that few organizations were well prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
First, the need to design the supply chain for versatility as well as agility. This looks particularly 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 so.
Second, it was discovered that much more interest was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be given to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as clever rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but in addition to increase market shares where competitors miss options. This challenge is not new, but it’s in addition been underexposed in this problems and was usually not a component of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic result of a crisis additionally depends on the way cooperation in the chain is set up. It’s usually unclear exactly how further expenses (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain characteristics are in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand as well as marketing and advertising on the other, the future will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?