Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the planet. Economic indicators and health have been compromised and all industries are touched inside a way or perhaps some other. Among the industries in which it was clearly apparent would be the farming as well as food business.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was clear to most men and women that there was a great effect at the tail end of the chain (e.g., hoarding in grocery stores, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors inside the source chain for that the impact is much less clear. It’s thus vital that you find out how effectively the food supply chain as a whole is armed to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with about 30 Dutch supply chain actors.
Demand within retail up, in food service down It is obvious and popular that need in the foodservice channels went down due to the closure of restaurants, amongst others. In some instances, sales for suppliers in the food service industry as a result fell to about 20 % of the first volume. As a side effect, demand in the list stations went up and remained at a degree of about 10-20 % greater than before the crisis started.
Products which had to come via abroad had their own problems. With the change in need coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup and plastic material was required for use in buyer packaging. As more of this packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had an important effect on output activities. In certain instances, this even meant a full stop in output (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport electrical capacity that is restricted during the very first weeks of the crisis, and high costs for container transport as a result. Truck transportation faced various issues. To begin with, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in most cases, nonetheless, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the core things of supply chain resilience:
To us this framework for the evaluation of the interviews, the conclusions show that few companies were well prepared for the corona problems and in fact mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to develop the supply chain for versatility and agility. This appears particularly complicated for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to do so.
Next, it was observed that more interest was necessary on spreading threat and aiming for risk reduction within the supply chain. For the future, this means more attention has to be provided to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing strategies in situations in which demand can’t be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but in addition to increase market shares in which competitors miss options. This challenge isn’t new, although it has additionally been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona problems shows you us that the monetary impact of a crisis additionally relies on the way cooperation in the chain is actually set up. It is usually unclear precisely how extra costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain operates are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the classic considerations between generation and logistics on the one hand as well as marketing and advertising on the other, the potential future will need to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?