Supply chain – The COVID 19 pandemic has certainly had the impact of its impact on the world. Economic indicators and health have been compromised and all industries are touched in a way or even some other. One of the industries in which this was clearly obvious would be the agriculture and food industry.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are impacted. Though it was apparent to a lot of folks that there was a huge impact at the tail end of the chain (e.g., hoarding doing supermarkets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find many actors within the source chain for that the effect is much less clear. It is thus imperative that you find out how well the food supply chain as being a whole is prepared to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supply 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 need in the foodservice stations went down on account of the closure of restaurants, amongst others. In some instances, sales for suppliers of the food service business thus fell to about 20 % of the original volume. As a side effect, demand in the retail stations went up and remained within a quality of about 10 20 % greater than before the problems started.
Products which had to come through abroad had the own issues of theirs. With the shift in need coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic material was needed for use in buyer packaging. As more of this particular packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in demand have had a major impact on production activities. In a few instances, this even meant a complete stop of production (e.g. in the duck farming business, which came to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capability that is restricted throughout the first weeks of the issues, and high costs for container transport as a consequence. Truck transport faced different issues. Initially, there were uncertainties regarding how transport will be handled at borders, which in the long run weren’t as stringent as feared. What was problematic in most cases, nonetheless, was the accessibility of motorists.
The reaction to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the primary elements of supply chain resilience:
Using this particular framework for the evaluation of the interview, the results show that few companies had been nicely prepared for the corona crisis and in reality mainly applied responsive practices. The most important supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for agility as well as versatility. This looks particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often do not have the potential to do it.
Next, it was observed that more interest was required on spreading threat as well as aiming for risk reduction in the supply chain. For the future, this means far more attention has to be made available to the manner in which organizations count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing strategies in situations in which demand cannot be met. Explicit prioritization is actually needed to continue to meet market expectations but in addition to boost market shares in which competitors miss options. This particular challenge isn’t new, although it’s also been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the monetary effect of a crisis additionally is determined by the way cooperation in the chain is set up. It is typically unclear exactly how further costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain features are actually in the driving accommodate 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 switch the basic discussions between creation and logistics on the one hand and marketing on the other, the future will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?