Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the planet. Economic indicators and health have been affected and all industries are touched within a way or even another. Among the industries in which this was clearly obvious is the farming as well as food business.
In 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 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 of the food chain have significant effects for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was apparent to majority of folks that there was a great impact at the end of the chain (e.g., hoarding in grocery stores, restaurants closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors within the source chain for that the impact is less clear. It’s therefore imperative that you figure out how well the food supply chain as a whole is actually armed to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also 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 the examination of theirs on interviews with about thirty Dutch supply chain actors.
Need within retail up, contained food service down It’s evident and popular that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few cases, sales for suppliers of the food service business thus fell to about twenty % of the initial volume. Being a side effect, demand in the list stations went up and remained at a degree of about 10-20 % greater than before the problems started.
Goods that had to come from abroad had their very own issues. With the shift in desire coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic was necessary for use in buyer packaging. As much more of this product packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a big effect on production activities. In some cases, this even meant a complete stop in output (e.g. in the duck farming industry, which emerged to a standstill due to demand fall-out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is restricted during the very first weeks of the issues, and costs which are high for container transport as a direct result. Truck transportation experienced different problems. Initially, there were uncertainties on how transport would be handled at borders, which in the long run were not as rigid as feared. What was problematic in a large number of cases, nevertheless, was the accessibility of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this key components of supply chain resilience:
Using this framework for the assessment of the interview, the results indicate that not many businesses were nicely prepared for the corona crisis and in fact mainly applied responsive methods. The most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This appears particularly challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capacity to do so.
Second, it was discovered that more attention was necessary on spreading danger and aiming for risk reduction within the supply chain. For the future, meaning far more attention should be made available to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in cases in which demand can’t be met. Explicit prioritization is necessary to continue to meet market expectations but in addition to improve market shares in which competitors miss options. This particular task isn’t new, though it has additionally been underexposed in this problems and was frequently not part of preparatory activities.
Fourthly, the corona problems shows you us that the financial effect of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear how extra costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain functionality are in the driving seat during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally change the traditional discussions between production and logistics on the one hand and advertising and marketing on the other, the future will have to explain to.
How’s the Dutch food supply chain coping during the corona crisis?