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 touched within one of the ways or another. Among the industries in which it was clearly noticeable will be the agriculture and food industry.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was clear to majority of individuals that there was a huge effect at the conclusion of the chain (e.g., hoarding around food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors inside the supply chain for that the effect is less clear. It is thus important to find out how properly the food supply chain as a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around 30 Dutch supply chain actors.
Need in retail up, in food service down It is apparent and popular that need in the foodservice channels went down due to the closure of joints, amongst others. In a few instances, sales for suppliers in the food service business thus fell to about twenty % of the initial volume. Being a side effect, demand in the list channels went up and remained within a quality of about 10 20 % higher than before the crisis started.
Goods that had to come from abroad had their own problems. With the shift in need from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic was required for wearing in consumer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had an important affect on output activities. In certain instances, this even meant a total stop of production (e.g. within the duck farming industry, which came to a standstill on account of demand fall-out on the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down pretty soon in 2020. This resulted in transport capacity that is limited during the very first weeks of the problems, and costs that are high for container transport as a result. Truck travel faced various problems. Initially, there were uncertainties on how transport would be handled at borders, which in the end weren’t as stringent as feared. The thing that was problematic in most situations, nonetheless, was the accessibility of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the core elements of supply chain resilience:
To us this framework for the analysis of the interview, the conclusions show that few businesses were well prepared for the corona problems and actually mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
For starters, the need to design the supply chain for agility as well as flexibility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to do so.
Next, it was observed that more attention was required on spreading threat and also aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be provided to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in cases in which demand cannot be met. Explicit prioritization is needed to continue to meet market expectations but additionally to improve market shares in which competitors miss opportunities. This particular task is not new, however, it has additionally been underexposed in this problems and was often not part of preparatory pursuits.
Fourthly, the corona issues shows you us that the financial result of a crisis additionally is determined by the way cooperation in the chain is actually set up. It is typically unclear precisely how extra costs (and benefits) are distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain operates are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the traditional considerations between production and logistics on the one hand and advertising and marketing on the other, the future will have to tell.
How is the Dutch foods supply chain coping during the corona crisis?