Supply chain – The COVID 19 pandemic has certainly had its impact effect on the world. health and Economic indicators have been compromised and all industries have been touched within one way or perhaps some other. One of the industries in which it was clearly noticeable would be the agriculture as well as food business.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as lots of stakeholders are impacted. Though it was clear to numerous folks that there was a great impact at the tail end of this chain (e.g., hoarding around supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors within the supply chain for that the impact is much less clear. It is therefore vital that you determine how well the food supply chain as being a whole is prepared to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need in retail up, in food service down It’s obvious and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry thus fell to aproximatelly 20 % of the original volume. Being a side effect, demand in the list stations went up and remained at a level of about 10 20 % higher than before the problems started.
Products which had to come through abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was required for wearing in buyer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a significant effect on output activities. In a few cases, this even meant a total stop in production (e.g. inside the duck farming industry, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in limited transport capacity during the very first weeks of the issues, and costs that are high for container transport as a consequence. Truck travel experienced various problems. Initially, there were uncertainties about how transport would be managed at borders, which in the long run were not as strict as feared. That which was problematic in a large number of instances, nevertheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this primary things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the findings indicate that not many businesses were well prepared for the corona problems and actually mostly applied responsive practices. The most important supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
To begin with, the need to develop the supply chain for flexibility as well as agility. This seems particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the potential to do so.
Next, it was observed that more interest was needed on spreading risk as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and clever rationing techniques in situations in which demand can’t be met. Explicit prioritization is needed to keep on to meet market expectations but in addition to boost market shares wherein competitors miss options. This particular challenge isn’t new, but it has in addition been underexposed in this specific crisis and was frequently not a part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the economic result of a crisis in addition is determined by the way cooperation in the chain is actually set up. It’s usually unclear how extra expenses (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain operates are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally replace the basic considerations between logistics and production on the one hand as well as marketing on the other hand, the potential future must tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?