Supply chain – The COVID 19 pandemic has certainly had the impact of its influence on the world. health and Economic indicators have been affected and all industries have been touched inside a way or even yet another. One of the industries in which it was clearly noticeable will be the agriculture and food industry.
Throughout 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 dropped € 7.1 billion within 2020. The hospitality industry 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 big consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Even though it was clear to many men and women that there was a big impact at the end of this chain (e.g., hoarding around grocery stores, eateries closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for that will the impact is much less clear. It is therefore imperative that you find out how properly the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with around thirty Dutch source chain actors.
Need within retail up, in food service down It is obvious and well known that need in the foodservice stations went down as a result of the closure of joints, amongst others. In a few instances, sales for suppliers in the food service business thus fell to about 20 % of the initial volume. As a complication, demand in the retail channels went up and remained within a level of about 10-20 % higher than before the problems started.
Products that had to come via abroad had the own issues of theirs. With the change in demand from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic material was required for wearing in buyer packaging. As much more of this particular packaging material ended up in consumers’ houses instead of in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a major impact on production activities. In a few instances, this even meant the full stop in production (e.g. in the duck farming industry, which arrived to a standstill on account 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), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport electrical capacity which is limited throughout the earliest weeks of the crisis, and costs 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 at borders, which in the end were not as strict as feared. What was problematic in many instances, however, was the availability of motorists.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this key components of supply chain resilience:
To us this particular framework for the assessment of the interview, the results indicate that few organizations were nicely prepared for the corona problems and in reality mainly applied responsive methods. The most notable source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to create the supply chain for agility and versatility. This looks especially complicated for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capability to do so.
Next, it was discovered that much more attention was necessary on spreading danger and aiming for risk reduction inside the supply chain. For the future, meaning more attention ought to be given to the way companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing strategies in situations in which demand cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but additionally to improve market shares wherein competitors miss options. This particular challenge is not new, although it has in addition been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the financial impact of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It is usually unclear how further costs (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally replace the basic discussions between creation and logistics on the one hand as well as marketing and advertising on the other, the future must explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?