Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its influence on the world. Economic indicators and health have been affected and all industries are touched within one of the ways or even some other. One of the industries in which it was clearly obvious will be the agriculture as well as food business.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was clear to many folks that there was a great effect at the conclusion of this chain (e.g., hoarding around food markets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find many actors in the supply chain for which the effect is much less clear. It’s therefore vital that you figure out how properly the food supply chain as a whole is actually prepared to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand within retail up, found food service down It’s apparent and well known that need in the foodservice channels went down due to the closure of places, amongst others. In certain cases, sales for vendors of the food service business thus fell to aproximatelly twenty % of the original volume. Being a side effect, demand in the retail stations went up and remained within a level of aproximatelly 10-20 % greater than before the problems began.
Products which had to come via abroad had their own problems. With the change in desire coming from foodservice to retail, the need for packaging changed dramatically, More tin, glass or plastic was needed for use in buyer packaging. As more of this particular packaging material concluded up in consumers’ homes as opposed to in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had an important affect on production activities. In a few cases, this even meant a total stop in output (e.g. in the duck farming industry, which arrived to a standstill due to demand fall out in the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capacity which is restricted during the first weeks of the issues, and high costs for container transport as a result. Truck transportation experienced various problems. To begin with, there were uncertainties about how transport will be managed for borders, which in the long run weren’t as rigid as feared. What was problematic in cases that are most , nonetheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this primary components of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions show that few companies had been well prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most important supply 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 appears especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to accomplish that.
Second, it was discovered that more interest was needed on spreading risk and also aiming for risk reduction inside the supply chain. For the future, this means far more attention ought to be provided to the manner in which businesses rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in cases in which need can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to boost market shares in which competitors miss opportunities. This particular task is not new, however, it has in addition been underexposed in this specific crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona crisis teaches us that the economic effect of a crisis also is determined by the manner in which cooperation in the chain is set up. It’s often unclear exactly how additional costs (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain operates are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally switch the basic considerations between creation and logistics on the one hand as well as advertising and marketing on the other, the future must explain to.
How is the Dutch food supply chain coping during the corona crisis?