Supply chain – The COVID-19 pandemic has definitely had its impact influence on the world. Economic indicators and health have been compromised and all industries have been touched in a way or even another. Among the industries in which this was clearly noticeable is the farming as well as food industry.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as many stakeholders are affected. Despite the fact that it was clear to most men and women that there was a great effect at the conclusion of this chain (e.g., hoarding around supermarkets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors in the supply chain for that will the impact is much less clear. It’s thus imperative that you determine how well the food supply chain as being a whole is actually armed to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic all over the food resources chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand within retail up, that is found food service down It’s obvious and well known that demand in the foodservice channels went down as a result of the closure of places, amongst others. In a few cases, sales for vendors in the food service business thus fell to aproximatelly twenty % of the original volume. As a side effect, demand in the list stations went up and remained within a level of about 10 20 % higher than before the crisis started.
Products that had to come from abroad had their own issues. With the change in demand from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic was necessary for wearing in consumer packaging. As much more of this 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 a big impact on output activities. In a few instances, this even meant a complete stop in production (e.g. in the duck farming industry, which arrived to a standstill due to demand fall out on the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is limited during the first weeks of the problems, and costs that are high for container transport as a result. Truck transportation faced various problems. Initially, there were uncertainties on how transport will be managed for borders, which in the long run were not as rigid as feared. The thing that was problematic in instances that are most , nonetheless, was the availability of motorists.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key elements of supply chain resilience:
To us this framework for the analysis of the interviews, the conclusions show that not many companies had been nicely prepared for the corona crisis and in fact mostly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for agility and versatility. This appears especially complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the potential to do so.
Second, it was observed that much more attention was required on spreading threat and also aiming for risk reduction in the supply chain. For the future, meaning more attention should be made available to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in cases in which need can’t be met. Explicit prioritization is needed to keep on to satisfy market expectations but additionally to improve market shares wherein competitors miss options. This task is not new, but it’s also been underexposed in this crisis and was frequently not part of preparatory activities.
Fourthly, the corona issues teaches us that the economic result of a crisis in addition depends on the way cooperation in the chain is set up. It’s typically unclear how extra costs (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain works are actually in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally switch the traditional considerations between production and logistics on the one hand and marketing on the other, the future will need to tell.
How’s the Dutch food supply chain coping throughout the corona crisis?