Supply chain – The COVID 19 pandemic has undoubtedly 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. One of the industries in which it was clearly noticeable will be the agriculture and food business.
In 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 dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as many stakeholders are impacted. Even though it was clear to a lot of individuals that there was a significant effect at the tail end of the chain (e.g., hoarding doing food markets, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for that will the impact is less clear. It’s therefore imperative that you figure out how properly the food supply chain as a whole is prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and out of 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 30 Dutch supply chain actors.
Need in retail up, contained food service down It’s evident and well known that demand in the foodservice channels went down due to the closure of places, amongst others. In a few cases, sales for vendors of the food service business therefore fell to about twenty % of the first volume. As an adverse reaction, demand in the list stations went up and remained at a quality of aproximatelly 10-20 % greater than before the problems began.
Goods that had to come via abroad had the own problems of theirs. With the change in demand from foodservice to retail, the demand for packaging improved considerably, More tin, glass or plastic was necessary for use in consumer packaging. As much more of this particular product packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant effect on output activities. In certain instances, this even meant a full stop of production (e.g. within the duck farming business, which came to a standstill due to demand fall-out inside the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly shortly in 2020. This resulted in restricted transport capability throughout the first weeks of the crisis, and high costs for container transport as a result. Truck transport experienced different problems. At first, there were uncertainties regarding how transport will be handled at borders, which in the end weren’t as strict as feared. That which was problematic in many instances, nevertheless, was the accessibility of motorists.
The response to COVID 19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core components of supply chain resilience:
Using this framework for the evaluation of the interview, the results show that not many companies were nicely prepared for the corona crisis and in fact mainly applied responsive methods. The most important supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
To begin with, the need to develop the supply chain for agility as well as versatility. This seems especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often do not have the capacity to do so.
Next, it was discovered that more interest was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, meaning more attention should be made available to the way organizations count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in situations in which need can’t be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but in addition to improve market shares wherein competitors miss opportunities. This task isn’t new, however, it has additionally been underexposed in this problems and was often not a part of preparatory pursuits.
Fourthly, the corona crisis shows us that the economic effect of a crisis in addition relies on the way cooperation in the chain is set up. It is usually unclear precisely how further costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain operates are actually in the driving seat during a crisis. Product development and advertising activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the classic discussions between generation and logistics on the one hand as well as advertising and marketing on the other hand, the potential future must explain to.
How is the Dutch food supply chain coping during the corona crisis?