Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the world. health and Economic indicators have been compromised and all industries have been touched within one of the ways or perhaps some other. Among the industries in which this was clearly obvious will be the farming and food industry.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was clear to numerous individuals that there was a great effect at the end of this chain (e.g., hoarding doing supermarkets, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the supply chain for which the impact is less clear. It’s thus imperative that you determine how effectively the food supply chain as being a whole is armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food resources chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Demand within retail up, found food service down It’s apparent and well known that need in the foodservice channels went down on account of the closure of restaurants, amongst others. In a few cases, sales for suppliers in the food service business thus fell to aproximatelly twenty % of the initial volume. As an adverse reaction, demand in the list stations went up and remained within a level of aproximatelly 10 20 % higher than before the problems started.
Products which had to come through abroad had the own issues of theirs. With the shift in desire coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass or plastic material was required for wearing in customer packaging. As more of this product packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a big affect on production activities. In certain cases, this even meant a full stop of output (e.g. inside the duck farming business, which came to a standstill on account of demand fall out on the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in limited transport electrical capacity during the earliest weeks of the crisis, and high costs for container transport as a result. Truck transportation faced various issues. Initially, there were uncertainties about how transport will be managed at borders, which in the end weren’t as strict as feared. The thing that was problematic in situations that are a large number of , however, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the main elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the findings show that few companies were well prepared for the corona problems and actually mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility and flexibility. This looks particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the capacity to accomplish that.
Next, it was discovered that more attention was necessary on spreading danger and also aiming for risk reduction inside the supply chain. For the future, meaning more attention has to be given to the manner in which companies depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and smart rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to boost market shares in which competitors miss opportunities. This particular task isn’t new, although it’s in addition been underexposed in this specific crisis and was often not a component of preparatory pursuits.
Fourthly, the corona issues shows us that the monetary impact of a crisis in addition relies on the way cooperation in the chain is set up. It is typically unclear precisely 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 characteristics are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally switch the classic considerations between logistics and creation on the one hand and marketing on the other, the potential future will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?