Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the planet. Economic indicators and health have been compromised and all industries have been touched within a way or yet another. One of the industries in which it was clearly obvious is the farming as well as food business.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was clear to numerous people that there was a great impact at the tail end of the chain (e.g., hoarding around food markets, eateries closing) and at the start of the chain (e.g., harvested potatoes not finding customers), you will find many actors in the supply chain for that the effect is much less clear. It’s therefore vital that you determine how effectively the food supply chain as being a whole is prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Demand within retail up, contained food service down It’s apparent and popular that demand in the foodservice stations went down as a result of the closure of places, amongst others. In some cases, sales for vendors in the food service industry therefore fell to about 20 % of the original volume. Being a complication, demand in the list stations went up and remained at a quality of about 10-20 % greater than before the problems started.
Products that had to come via abroad had the own issues of theirs. With the shift in desire from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic material was needed for wearing in consumer packaging. As more of this particular packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had a big impact on output activities. In a few cases, this even meant a full stop in output (e.g. inside the duck farming industry, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capability that is restricted during the earliest weeks of the problems, and high expenses for container transport as a result. Truck transportation experienced various problems. Initially, there were uncertainties regarding how transport will be managed at borders, which in the end weren’t as stringent as feared. That which was problematic in cases that are a large number of , nonetheless, was the availability of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of this core elements of supply chain resilience:
Using this particular framework for the assessment of the interviews, the results indicate that not many organizations were nicely prepared for the corona problems and in fact mostly applied responsive methods. The most notable supply chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
To begin with, the need to design the supply chain for flexibility as well as agility. This seems particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the potential to do it.
Second, it was discovered that more interest was needed on spreading danger and aiming for risk reduction within the supply chain. For the future, meaning far more attention should be given to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in situations in which need cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but also to improve market shares wherein competitors miss opportunities. This particular task isn’t new, though it’s in addition been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona issues teaches us that the economic result of a crisis also depends on the manner in which cooperation in the chain is actually set up. It is often unclear exactly how extra costs (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain works are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the traditional considerations between generation and logistics on the one hand and marketing and advertising on the other hand, the long term will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?