Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched inside a way or another. Among the industries in which it was clearly apparent is the farming as well as food business.
Throughout 2019, the Dutch extension as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as many stakeholders are impacted. Though it was clear to numerous men and women that there was a great effect at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for that the impact is less clear. It is therefore vital that you find out how properly the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as 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 their analysis on interviews with about 30 Dutch supply chain actors.
Demand in retail up, contained food service down It is obvious and well known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In a few instances, sales for suppliers of the food service industry therefore fell to about 20 % of the initial volume. Being a complication, demand in the list channels went up and remained within a quality of aproximatelly 10-20 % higher than before the crisis started.
Products that had to come via abroad had the own problems of theirs. With the change in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was necessary for wearing in buyer packaging. As much more of this particular packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had an important affect on production activities. In certain instances, this even meant the full stop in production (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall out on the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea bins to slow down pretty soon in 2020. This resulted in transport electrical capacity which is limited during the earliest weeks of the crisis, and high expenses for container transport as a consequence. Truck travel encountered various problems. At first, there were uncertainties on how transport would be handled for borders, which in the long run weren’t as rigid as feared. That which was problematic in instances that are a large number of , however, was the accessibility of motorists.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results indicate that not many organizations had been nicely prepared for the corona crisis and actually mostly applied responsive practices. The most important supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as flexibility. This looks particularly complicated for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the potential to accomplish that.
Second, it was discovered that more attention was necessary on spreading danger and aiming for risk reduction inside the supply chain. For the future, what this means is more attention has to be made available to the manner in which organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent 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 task is not new, though it has in addition been underexposed in this specific problems and was frequently not a part of preparatory pursuits.
Fourthly, the corona issues teaches us that the monetary effect of a crisis also is determined by the manner in which cooperation in the chain is set up. It’s typically unclear how extra expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain functionality are actually in the driving seat during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally switch the traditional discussions between production and logistics on the one hand and marketing and advertising on the other hand, the future will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?