Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its impact on the planet. health and Economic indicators have been compromised and all industries have been completely touched within one way or perhaps some other. Among the industries in which this was clearly noticeable is the agriculture as well as food business.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Though it was clear to a lot of men and women that there was a great impact at the tail end of this chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for that the impact is much less clear. It is therefore vital that you find out how properly the food supply chain as being a whole is actually prepared to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about thirty Dutch supply chain actors.
Demand within retail up, in food service down It is evident and popular that demand in the foodservice channels went down due to the closure of joints, amongst others. In certain cases, sales for vendors of the food service industry therefore fell to aproximatelly twenty % of the original volume. As a complication, demand in the retail stations went up and remained at a quality of about 10-20 % higher than before the problems began.
Goods that had to come through abroad had the own problems of theirs. With the change in demand from foodservice to retail, the demand for packaging changed dramatically, More tin, glass or plastic was necessary for wearing in buyer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had a major affect on production activities. In certain cases, this even meant the full stop in output (e.g. in the duck farming business, which came to a standstill on account of demand fall-out on the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in limited transport capability throughout the earliest weeks of the crisis, and high costs for container transport as a direct result. Truck transport encountered different issues. Initially, there were uncertainties about how transport would be handled for borders, which in the long run weren’t as strict as feared. That which was problematic in instances that are many , nevertheless, was the availability of drivers.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the core things of supply chain resilience:
To us this particular framework for the assessment of the interviews, the findings indicate that not many companies had been nicely prepared for the corona crisis and in reality mostly applied responsive methods. The most important supply 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 and flexibility. This seems especially complicated for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often don’t have the capability to do so.
Next, it was discovered that much more attention was needed on spreading danger and aiming for risk reduction in the supply chain. For the future, this means more attention should be made available to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing strategies in situations in which need can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but additionally to boost market shares in which competitors miss opportunities. This task isn’t new, although it’s also been underexposed in this problems and was usually not part of preparatory activities.
Fourthly, the corona crisis shows us that the monetary impact of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It’s usually unclear exactly how additional expenses (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain functionality are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally switch the traditional discussions between generation and logistics on the one hand and marketing and advertising on the other, the potential future will need to tell.
How’s the Dutch foods supply chain coping during the corona crisis?