Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been compromised and all industries have been completely touched in one way or even yet another. One of the industries in which this was clearly visible is the farming and food business.
In 2019, the Dutch extension and food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 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 in the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was clear to many individuals that there was a big effect at the tail end of this chain (e.g., hoarding around grocery stores, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that the impact is much less clear. It’s therefore vital that you find out 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 University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic throughout the food supply chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need in retail up, that is found food service down It is obvious and widely known that demand in the foodservice stations went down due to the closure of places, amongst others. In a few cases, sales for vendors of the food service business thus fell to about 20 % of the initial volume. As an adverse reaction, demand in the list channels went up and remained at a degree of about 10-20 % higher than before the problems started.
Products that had to come through abroad had the own problems of theirs. With the change in desire coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic was needed for wearing in consumer packaging. As more of this packaging material concluded up in consumers’ homes as opposed to in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a major effect on output activities. In a few cases, this even meant a complete stop in production (e.g. inside the duck farming industry, which came to a standstill on account of demand fall-out in the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the problems, and high costs for container transport as a result. Truck transport experienced different issues. To begin with, there were uncertainties about how transport would be handled at borders, which in the long run weren’t as rigid as feared. What was problematic in most cases, however, was the accessibility of drivers.
The reaction to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the key elements of supply chain resilience:
Using this particular framework for the assessment of the interview, the findings show that not many companies were nicely prepared for the corona crisis and actually mainly applied responsive methods. The most important source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
To begin with, the need to create the supply chain for versatility as well as agility. This seems particularly challenging for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capability to accomplish that.
Second, it was discovered that much more attention was necessary on spreading threat and aiming for risk reduction inside the supply chain. For the future, meaning far more attention ought to be provided to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in situations in which need can’t be met. Explicit prioritization is required to keep on to meet market expectations but in addition to boost market shares in which competitors miss opportunities. This task is not new, however, it has additionally been underexposed in this specific problems and was often not part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the monetary impact of a crisis additionally depends on the manner in which cooperation in the chain is set up. It is often unclear exactly how further expenses (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally change the traditional considerations between logistics and creation on the one hand as well as advertising on the other, the potential future will need to explain to.
How is the Dutch foods supply chain coping during the corona crisis?