Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the world. health and Economic indicators have been compromised and all industries have been completely touched within one of the ways or perhaps yet another. One of the industries in which it was clearly obvious would be the farming as well as food business.
In 2019, the Dutch extension and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry 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 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 a lot of stakeholders are affected. Even though it was clear to most men and women that there was a huge impact at the tail end of this chain (e.g., hoarding in supermarkets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors in the source chain for that the effect is much less clear. It’s therefore imperative that you find out how properly the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Need within retail up, that is found food service down It is apparent and widely known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In certain cases, sales for vendors in the food service business therefore fell to aproximatelly 20 % of the first volume. As an adverse reaction, demand in the retail stations went up and remained within a quality of aproximatelly 10 20 % greater than before the crisis began.
Products which had to come through abroad had their very own problems. With the change in need from foodservice to retail, the requirement for packaging changed considerably, More tin, glass and plastic was needed for use in consumer packaging. As more of this particular product packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a major affect on output activities. In a few cases, this even meant a complete stop in production (e.g. within the duck farming business, which emerged to a standstill as a result of demand fall out on the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in restricted transport capability during the first weeks of the issues, and expenses that are high for container transport as a consequence. Truck travel encountered different 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 a large number of instances, nevertheless, was the availability of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this core elements of supply chain resilience:
To us this framework for the assessment of the interviews, the findings show that not many organizations had been well prepared for the corona problems and in reality mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
For starters, the need to design the supply chain for agility as well as versatility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capacity to do so.
Next, it was found that more interest was necessary on spreading risk and aiming for risk reduction within the supply chain. For the future, meaning more attention has to be provided to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and smart rationing strategies in situations in which need cannot be met. Explicit prioritization is necessary to keep on to meet market expectations but additionally to boost market shares where competitors miss opportunities. This particular task isn’t new, however, it has also been underexposed in this problems and was often not a part of preparatory activities.
Fourthly, the corona problems shows you us that the economic effect of a crisis in addition depends on the way cooperation in the chain is set up. It’s usually unclear exactly how additional costs (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain events. Whether the corona pandemic will structurally replace the basic considerations between logistics and generation on the one hand as well as marketing on the other, the future will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?