Supply chain – The COVID 19 pandemic has definitely had its impact impact on the planet. Economic indicators and health have been compromised and all industries are touched in one of the ways or perhaps yet another. One of the industries in which this was clearly noticeable is the farming and food industry.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as many stakeholders are impacted. Though it was apparent to numerous individuals that there was a great impact at the conclusion of the chain (e.g., hoarding doing supermarkets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors in the supply chain for that the impact is less clear. It’s thus vital that you find out how effectively the food supply chain as a whole is actually prepared to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and coming from 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 the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It’s obvious and widely known that need in the foodservice stations went down on account of the closure of places, amongst others. In certain cases, sales for vendors in the food service industry as a result fell to about twenty % of the first volume. Being a side effect, demand in the retail channels went up and remained at a quality of aproximatelly 10 20 % greater than before the crisis started.
Products that had to come through abroad had their very own issues. With the shift in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, glass or plastic was necessary for wearing in buyer packaging. As more of this product packaging material ended up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a big effect on output activities. In a few instances, this even meant a complete stop of output (e.g. within the duck farming industry, which arrived to a standstill on account of demand fall out on the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity which is restricted during the very first weeks of the problems, and expenses that are high for container transport as a consequence. Truck transport experienced different problems. To begin with, there were uncertainties regarding how transport would be managed for borders, which in the end weren’t as strict as feared. That which was problematic in a large number of cases, nonetheless, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the primary elements of supply chain resilience:
To us this framework for the analysis of the interview, the findings show that few companies were nicely prepared for the corona crisis and in reality mainly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
For starters, the need to develop the supply chain for versatility and agility. This seems especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capability to accomplish that.
Second, it was discovered that much more attention was necessary on spreading risk and aiming for risk reduction within the supply chain. For the future, what this means is more attention should be provided to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing strategies in cases where demand cannot be met. Explicit prioritization is needed to keep on to meet market expectations but in addition to boost market shares where competitors miss opportunities. This task is not new, but it has in addition been underexposed in this crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic result of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It’s typically unclear precisely how additional costs (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain functions are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the classic discussions between generation and logistics on the one hand as well as marketing on the other hand, the future must tell.
How’s the Dutch foods supply chain coping during the corona crisis?