Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the planet. Economic indicators and health have been affected and all industries have been completely touched within a way or perhaps yet another. Among the industries in which this was clearly apparent is the agriculture as well as food industry.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality industry 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 significant effects for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was apparent to numerous people that there was a great effect at the tail end of this chain (e.g., hoarding around food markets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the supply chain for which the impact is much less clear. It’s thus vital that you find out how well the food supply chain as being a whole is equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need in retail up, contained food service down It is evident and well known that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In certain cases, sales for suppliers of the food service business as a result fell to about 20 % of the initial volume. Being a side effect, demand in the list channels went up and remained within a degree of about 10-20 % greater than before the problems began.
Goods that had to come from abroad had their very own issues. With the change in demand coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass or plastic material was necessary for wearing in buyer packaging. As much more of this packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a major impact on production activities. In a few cases, this even meant a total stop in output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall out in the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in limited transport capability throughout the first weeks of the problems, and costs that are high for container transport as a consequence. Truck transportation experienced different problems. Initially, there were uncertainties about how transport would be managed for borders, which in the end were not as rigid as feared. The thing that was problematic in many situations, nevertheless, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the main components of supply chain resilience:
To us this particular framework for the analysis of the interview, the conclusions show that few organizations had been nicely prepared for the corona problems and actually mainly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
First, the need to develop the supply chain for agility and versatility. This appears particularly complicated for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capability to do it.
Second, it was discovered that much more attention was needed on spreading risk and aiming for risk reduction inside the supply chain. For the future, what this means is far more attention should be provided to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing strategies in cases in which demand cannot be met. Explicit prioritization is actually required to keep on to satisfy market expectations but additionally to increase market shares where competitors miss options. This particular challenge is not new, although it’s in addition been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona problems shows us that the monetary result of a crisis additionally is determined by the way cooperation in the chain is set up. It is usually unclear exactly how further expenses (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain characteristics are in the driving accommodate during a crisis. Product development and advertising activities have to go hand in hand with supply chain activities. Whether the corona pandemic will structurally switch the basic discussions between creation and logistics on the one hand and advertising and marketing on the other, the long term will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?