Supply chain – The COVID-19 pandemic has definitely had its impact impact on the planet. Economic indicators and health have been affected and all industries are touched in a way or another. One of the industries in which this was clearly noticeable is the farming as well as food business.
In 2019, the Dutch extension and food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to numerous men and women that there was a big effect at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors in the source chain for that will the effect is less clear. It is therefore imperative that you figure out how well the food supply chain as a whole is equipped to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supply chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand in retail up, in food service down It’s evident and popular that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In some instances, sales for suppliers of the food service industry thus fell to aproximatelly 20 % of the original volume. Being an adverse reaction, demand in the retail channels went up and remained within a quality of about 10 20 % greater than before the problems began.
Products which had to come through abroad had the own issues of theirs. With the change in demand from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic material was required for use in consumer packaging. As more of this particular packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a major effect on production activities. In some instances, this even meant the full stop of output (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in limited transport capability throughout the first weeks of the crisis, and high expenses for container transport as a consequence. Truck transport faced various issues. At first, there were uncertainties about how transport would be managed for borders, which in the long run were not as strict as feared. What was problematic in instances that are a large number of , nonetheless, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the core components of supply chain resilience:
Using this particular framework for the assessment of the interviews, the results indicate that not many organizations had been well prepared for the corona problems and in fact mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This appears especially challenging for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capability to accomplish that.
Second, it was found that much more interest was required on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, what this means is more attention has to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in cases where demand can’t be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to increase market shares in which competitors miss opportunities. This challenge isn’t new, but it has additionally been underexposed in this problems and was often not a component of preparatory pursuits.
Fourthly, the corona problems teaches us that the monetary impact of a crisis also relies on the manner in which cooperation in the chain is set up. It is typically unclear precisely how further expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain characteristics are in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the basic considerations between logistics and creation on the one hand as well as marketing and advertising on the other hand, the future will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?