Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been completely touched within a way or even another. Among the industries in which this was clearly noticeable would be the farming and food business.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was apparent to numerous individuals that there was a significant impact at the end of the chain (e.g., hoarding in food markets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors inside the supply chain for which the impact is less clear. It’s therefore important to find out how effectively the food supply chain as a whole is actually armed to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand within retail up, in food service down It’s apparent and popular that need in the foodservice channels went down as a result of the closure of joints, amongst others. In a few instances, sales for suppliers in the food service industry thus fell to aproximatelly 20 % of the first volume. Being a complication, demand in the list stations went up and remained within a degree of about 10-20 % higher than before the problems started.
Products that had to come through abroad had their own issues. With the shift in need from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic was needed for wearing in customer packaging. As more of this packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had a major affect on output activities. In some cases, this even meant the full stop of production (e.g. inside the duck farming industry, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea bins to slow down pretty soon in 2020. This resulted in restricted transport capability during the first weeks of the issues, and high costs for container transport as a result. Truck travel experienced various issues. Initially, there were uncertainties regarding how transport will be handled at borders, which in the long run weren’t as rigid as feared. What was problematic in a large number of instances, nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this key things of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions show that few organizations had been nicely prepared for the corona problems and in fact mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
To begin with, the need to develop the supply chain for flexibility as well as agility. This appears especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to do it.
Next, it was observed that more interest was required on spreading danger and also aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be given to the way organizations count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing techniques in situations where need can’t be met. Explicit prioritization is required to keep on to meet market expectations but also to boost market shares wherein competitors miss options. This challenge isn’t new, however, it’s in addition been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona problems teaches us that the financial impact of a crisis additionally relies on the manner in which cooperation in the chain is set up. It is usually unclear precisely how further expenses (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain works are in the driving accommodate during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional discussions between production and logistics on the one hand and marketing and advertising on the other, the future will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?