Supply chain – The COVID 19 pandemic has certainly had its impact effect on the planet. health and Economic indicators have been affected and all industries have been completely touched inside a way or another. Among the industries in which this was clearly apparent will be the farming and food industry.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 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 consequences for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to many folks that there was a big effect at the tail end of the chain (e.g., hoarding around grocery stores, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the supply chain for that the effect is less clear. It’s thus vital that you find out how properly the food supply chain as a whole is actually equipped to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Need within retail up, found food service down It is evident and widely known that demand in the foodservice stations went down on account of the closure of places, amongst others. In some instances, sales for suppliers of the food service business thus fell to aproximatelly twenty % of the original volume. As a side effect, demand in the retail channels went up and remained within a level of about 10 20 % higher than before the crisis began.
Goods that had to come via abroad had their very own problems. With the shift in need from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic was required for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a significant impact on output activities. In a few cases, this even meant a complete stop of production (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea bins to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity throughout the earliest weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transport experienced various issues. Initially, there were uncertainties about how transport would be handled for borders, which in the long run were not as strict as feared. That which was problematic in instances that are many , nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – supply 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 framework for the analysis of the interview, the results indicate that few businesses were well prepared for the corona problems and actually mostly applied responsive practices. The most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to develop the supply chain for agility and versatility. This looks especially complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capability to accomplish that.
Second, it was observed that much more attention was needed on spreading threat and aiming for risk reduction within the supply chain. For the future, meaning more attention has to be given to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and intelligent rationing techniques in situations in which demand can’t be met. Explicit prioritization is required to continue to meet market expectations but also to increase market shares where competitors miss options. This challenge is not new, although it’s additionally been underexposed in this specific crisis and was often not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the monetary impact of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s usually unclear how extra expenses (and benefits) are sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the basic discussions between generation and logistics on the one hand as well as advertising on the other hand, the future will need to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?