Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the planet. health and Economic indicators have been affected and all industries are touched inside one way or yet another. One of the industries in which this was clearly apparent is the agriculture and food industry.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to most folks that there was a significant impact at the conclusion of the chain (e.g., hoarding around food markets, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the source chain for which the impact is much less clear. It is therefore vital that you find out how effectively the food supply chain as a whole is prepared to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with around 30 Dutch source chain actors.
Need within retail up, in food service down It’s apparent and well known that demand in the foodservice stations went down as a result of the closure of joints, amongst others. In a few cases, sales for suppliers in the food service business as a result fell to aproximatelly twenty % of the first volume. As a side effect, demand in the retail stations went up and remained within a degree of aproximatelly 10-20 % greater than before the problems began.
Products which had to come via abroad had their very own issues. With the shift in desire from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic was needed for wearing in buyer packaging. As much more of this packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major affect on output activities. In a few instances, this even meant a full stop of production (e.g. in the duck farming business, which came to a standstill on account of demand fall out inside the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability that is limited throughout the very first weeks of the issues, and costs that are high for container transport as a direct result. Truck transport experienced various issues. At first, there were uncertainties on how transport would be handled for borders, which in the long run were not as strict as feared. That which was problematic in a large number of instances, nevertheless, was the accessibility of drivers.
The reaction to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this key elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the conclusions show that few organizations had been well prepared for the corona problems and in reality mainly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for agility and flexibility. 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 don’t have the capacity to do so.
Next, it was discovered that more interest was needed on spreading danger and aiming for risk reduction in the supply chain. For the future, what this means is more attention should be made available to the manner in which businesses rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in situations in which demand can’t be met. Explicit prioritization is required to continue to meet market expectations but in addition to improve market shares in which competitors miss opportunities. This particular task isn’t new, however, it’s also been underexposed in this crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona issues shows you us that the monetary result of a crisis in addition relies on the way cooperation in the chain is actually set up. It’s usually unclear exactly how extra costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain capabilities are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the classic discussions between generation and logistics on the one hand and marketing on the other, the future will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?