Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been compromised and all industries have been touched inside one of the ways or perhaps another. One of the industries in which it was clearly apparent will be the farming as well as food industry.
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 dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to numerous folks that there was a great impact at the conclusion of the chain (e.g., hoarding doing food markets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find many actors inside the supply chain for that the effect is less clear. It’s thus vital that you figure out how well the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Demand within retail up, in food service down It is apparent and widely known that need in the foodservice channels went down as a result of the closure of places, amongst others. In some instances, sales for vendors of the food service business thus fell to aproximatelly twenty % of the first volume. As a complication, demand in the list stations went up and remained at a degree of aproximatelly 10 20 % higher than before the crisis started.
Products that had to come through abroad had the own problems of theirs. With the change in demand coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic material was needed for wearing in customer packaging. As much more of this packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had a big affect on production activities. In certain cases, this even meant the full stop of 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 situations, a major portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down pretty soon in 2020. This resulted in restricted transport capability throughout the first weeks of the crisis, and costs that are high for container transport as a consequence. Truck transportation faced different issues. To begin with, there were uncertainties on how transport will be handled at borders, which in the end were not as strict as feared. The thing that was problematic in instances that are many , however, was the availability of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this primary things 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 reality mainly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This seems particularly challenging for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capability to do it.
Next, it was found that more attention was needed on spreading risk and also aiming for risk reduction in the supply chain. For the future, this means more attention ought to be provided to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases in which demand can’t be met. Explicit prioritization is necessary to continue to meet market expectations but in addition to boost market shares wherein competitors miss options. This particular challenge isn’t new, although it’s also been underexposed in this problems and was often not a part of preparatory activities.
Fourthly, the corona crisis shows us that the financial impact of a crisis in addition relies on the way cooperation in the chain is set up. It’s often unclear how further expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally change the basic considerations between production and logistics on the one hand as well as marketing on the other, the long term will have to tell.
How’s the Dutch food supply chain coping during the corona crisis?