Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been touched within one way or perhaps another. Among the industries in which this was clearly visible would be the farming as well as food business.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as a lot of stakeholders are affected. 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 food markets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are many actors in the source chain for which the effect is much less clear. It is therefore vital that you find out how properly the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food resources chain. They based their analysis on interviews with around thirty Dutch source chain actors.
Need within retail up, contained food service down It is evident and popular that need in the foodservice channels went down on account of the closure of joints, amongst others. In a few cases, sales for vendors of the food service business therefore fell to aproximatelly twenty % of the initial volume. As a complication, demand in the list stations went up and remained within a degree of about 10-20 % greater than before the problems started.
Goods that had to come from abroad had their very own problems. With the change in need from foodservice to retail, the need for packaging changed dramatically, More tin, cup and plastic was necessary for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had an important affect on production activities. In some cases, this even meant a complete stop of output (e.g. within the duck farming business, which arrived to a standstill on account of demand fall out on the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China triggered the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capability that is limited throughout the very first weeks of the crisis, and expenses which are high for container transport as a result. Truck travel faced different problems. At first, there were uncertainties on how transport will be managed for borders, which in the end were not as rigid as feared. The thing that was problematic in cases which are most, nonetheless, was the availability of drivers.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the core components of supply chain resilience:
To us this particular framework for the evaluation of the interview, the conclusions indicate that not many organizations had been well prepared for the corona problems and actually mainly applied responsive methods. The most notable source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to design the supply chain for versatility and agility. This seems particularly challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capability to do it.
Next, it was discovered that more interest was necessary on spreading threat and aiming for risk reduction inside the supply chain. For the future, this means more attention ought to be provided to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and intelligent rationing strategies in cases where demand cannot be met. Explicit prioritization is required to continue to meet market expectations but also to improve market shares wherein competitors miss options. This task is not new, however, it has in addition been underexposed in this crisis and was frequently not part of preparatory activities.
Fourthly, the corona crisis shows you us that the monetary result of a crisis also relies on the manner in which cooperation in the chain is actually set up. It is typically unclear exactly how extra expenses (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain operates are in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain events. Whether the corona pandemic will structurally change the basic considerations between logistics and production on the one hand and marketing and advertising on the other, the potential future will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?