Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the planet. Economic indicators and health have been compromised and all industries have been touched inside a way or even yet another. Among the industries in which this was clearly apparent is the farming and food business.
In 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 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 big consequences for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to most people that there was a significant effect at the conclusion of the chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the source chain for that the effect is much less clear. It’s therefore vital that you determine how properly the food supply chain as a whole is actually equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Demand in retail up, in food service down It is obvious and well known that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In certain instances, sales for suppliers of the food service industry as a result fell to aproximatelly 20 % of the initial volume. Being a complication, demand in the retail stations went up and remained at a quality of aproximatelly 10 20 % greater than before the crisis began.
Products that had to come through abroad had their own problems. With the change in need from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic was necessary for use in customer packaging. As much more of this particular packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had a major affect on output activities. In some cases, this even meant a full stop of production (e.g. inside the duck farming industry, which came to a standstill due to demand fall-out on the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capacity that is restricted throughout the very first weeks of the crisis, and expenses that are high for container transport as a consequence. Truck travel encountered various issues. Initially, there were uncertainties about how transport would be managed for borders, which in the long run weren’t as strict as feared. That which was problematic in situations that are most , nonetheless, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary things of supply chain resilience:
Using this particular framework for the assessment of the interviews, the results indicate that not many businesses were well prepared for the corona problems and actually mainly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to develop the supply chain for agility and flexibility. This appears particularly complicated for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capability to do it.
Second, it was found that much more interest was needed on spreading risk and also aiming for risk reduction in the supply chain. For the future, what this means is more attention should be provided to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in situations in which demand can’t be met. Explicit prioritization is actually required to keep on to satisfy market expectations but additionally to boost market shares in which competitors miss opportunities. This particular challenge is not new, though it has in addition been underexposed in this problems and was frequently not part of preparatory activities.
Fourthly, the corona issues shows us that the financial result of a crisis also relies on the manner in which cooperation in the chain is set up. It’s usually unclear exactly how extra expenses (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain functions are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the basic considerations between creation and logistics on the one hand as well as marketing on the other hand, the future will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?