Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its impact on the planet. Economic indicators and health have been affected and all industries have been completely touched within one of the ways or perhaps some other. One of the industries in which it was clearly obvious would be the farming and food industry.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was clear to majority of men and women that there was a great effect at the tail end of this chain (e.g., hoarding doing grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for which the effect is much less clear. It’s therefore vital that you determine how effectively the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Demand within retail up, found food service down It’s apparent and popular that demand in the foodservice channels went down due to the closure of joints, amongst others. In a few cases, sales for suppliers of the food service business as a result fell to about twenty % of the first volume. As a complication, demand in the retail stations went up and remained at a level of about 10-20 % higher than before the crisis started.
Goods that had to come from abroad had their very own issues. With the shift in desire from foodservice to retail, the need for packaging improved considerably, More tin, cup or plastic material was necessary for wearing in consumer packaging. As much more of this product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had an important effect on production activities. In some instances, this even meant a full stop in output (e.g. in the duck farming industry, which came to a standstill due to demand fall out inside the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in restricted transport electrical capacity during the very first weeks of the problems, and expenses which are high for container transport as a direct result. Truck transportation encountered various issues. At first, there were uncertainties regarding how transport would be handled at borders, which in the long run weren’t as rigid as feared. What was problematic in most situations, nevertheless, was the accessibility of drivers.
The reaction to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this core elements of supply chain resilience:
To us this framework for the analysis of the interviews, the conclusions indicate that not many organizations had been well prepared for the corona problems and actually mainly applied responsive practices. The most notable supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
First, the need to create the supply chain for flexibility as well as agility. This seems especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the potential to do it.
Next, it was observed that much more attention was needed on spreading danger and also aiming for risk reduction in the supply chain. For the future, meaning 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 as well as smart rationing strategies in situations in which demand cannot be met. Explicit prioritization is required to keep on to meet market expectations but in addition to boost market shares where competitors miss opportunities. This challenge isn’t new, however, it has additionally been underexposed in this specific crisis and was usually not a part of preparatory activities.
Fourthly, the corona crisis shows us that the economic impact of a crisis additionally depends on the manner in which cooperation in the chain is set up. It’s typically unclear exactly how additional costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain functions are in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the basic discussions between generation and logistics on the one hand and marketing on the other, the future must tell.
How’s the Dutch foods supply chain coping during the corona crisis?