Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the planet. health and Economic indicators have been affected and all industries have been touched within one way or even some other. One of the industries in which this was clearly noticeable will be the agriculture and food industry.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the gross domestic item (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 exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was clear to most people that there was a big effect at the conclusion of this chain (e.g., hoarding around grocery stores, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find many actors within the supply chain for that the effect is less clear. It is thus important to figure out how effectively the food supply chain as a whole is actually armed to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food resources chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Need within retail up, contained food service down It is obvious and well known that need in the foodservice stations went down on account of the closure of places, amongst others. In some cases, sales for suppliers of the food service industry as a result fell to about twenty % of the initial volume. Being a complication, demand in the list channels went up and remained at a level of about 10-20 % greater than before the problems began.
Products that had to come from abroad had the own problems of theirs. With the change in desire from foodservice to retail, the demand for packaging improved considerably, More tin, glass and plastic material was needed for use in customer packaging. As more of this particular packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a big affect on production activities. In some instances, this even meant a complete stop in production (e.g. in the duck farming industry, which emerged to a standstill due to demand fall-out on the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity that is limited during the very first weeks of the crisis, and expenses that are high for container transport as a result. Truck travel encountered various problems. At first, there were uncertainties on how transport would be managed for borders, which in the long run were not as stringent as feared. What was problematic in a large number of situations, however, was the availability of motorists.
The response to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the core components of supply chain resilience:
To us this framework for the evaluation of the interview, the findings show that few companies were nicely prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
For starters, the need to create the supply chain for agility and flexibility. This seems particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capability to do it.
Next, it was found that more attention was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be given to the manner in which companies depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in cases where need cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but additionally to increase market shares in which competitors miss options. This challenge is not new, though it has in addition been underexposed in this problems and was usually not a component of preparatory pursuits.
Fourthly, the corona crisis teaches us that the monetary effect of a crisis additionally depends on the manner in which 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.
Lastly, relative to other functional departments, the operations and supply chain functions are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the classic discussions between creation and logistics on the one hand and advertising on the other, the potential future will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?