Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been affected and all industries have been touched inside one way or even some other. Among the industries in which it was clearly obvious is the farming and food industry.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic item (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 same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Even though it was apparent to a lot of folks that there was a big effect at the conclusion of the chain (e.g., hoarding in supermarkets, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the supply chain for that will the impact is less clear. It is therefore vital that you figure out how effectively the food supply chain as a whole is actually armed to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It is obvious and widely known that need in the foodservice stations went down due to the closure of restaurants, amongst others. In some instances, sales for vendors of the food service business as a result fell to aproximatelly 20 % of the first volume. Being a side effect, demand in the retail stations went up and remained within a level of aproximatelly 10-20 % greater than before the problems started.
Products that had to come via abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup and plastic material was required for use in consumer packaging. As much more of this product packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a major effect on production 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 on the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in restricted transport capability throughout the earliest weeks of the crisis, and expenses which are high for container transport as a direct result. Truck travel experienced various 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 situations which are most, however, was the accessibility of drivers.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this primary elements of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the findings show that few companies were nicely 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 food supply chain resilience
For starters, the need to develop the supply chain for agility and flexibility. This seems especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capability to accomplish that.
Second, it was found that more interest was necessary on spreading danger and aiming for risk reduction inside the supply chain. For the future, this means more attention should be provided to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and smart rationing strategies in situations in which demand can’t be met. Explicit prioritization is required to continue to satisfy market expectations but in addition to boost market shares in which competitors miss options. This particular task is not new, although it’s also been underexposed in this crisis and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the monetary effect of a crisis additionally depends on the way cooperation in the chain is actually set up. It is usually unclear exactly how further expenses (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally switch the traditional discussions between logistics and generation on the one hand and marketing and advertising on the other hand, the future must tell.
How is the Dutch meal supply chain coping during the corona crisis?