Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its influence on the world. health and Economic indicators have been compromised and all industries have been completely touched in one way or even some other. One of the industries in which it was clearly noticeable will be the farming and food business.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality trade 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 big consequences for the Dutch economy and food security as lots of stakeholders are impacted. Even though it was clear to many people that there was a big effect at the tail end of this chain (e.g., hoarding around grocery stores, eateries closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the source chain for that will the impact is less clear. It is thus important to figure out how well the food supply chain as a whole is equipped to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food resources chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need within retail up, in food service down It’s obvious and popular that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In a few instances, sales for suppliers in the food service industry therefore fell to aproximatelly 20 % of the original volume. As a side effect, demand in the list channels went up and remained at a degree of about 10 20 % greater than before the problems began.
Products which had to come through abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic material was needed for wearing in buyer packaging. As much more of this product packaging material concluded up in consumers’ homes rather than in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a big impact on production activities. In some cases, this even meant the full stop of output (e.g. inside the duck farming business, which emerged to a standstill due to demand fall-out on the foodservice sector). In other instances, a major 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 beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in restricted transport capacity during the very first weeks of the issues, and expenses which are high for container transport as a direct result. Truck transport experienced various issues. To begin with, there were uncertainties on how transport will be managed for borders, which in the long run weren’t as strict as feared. The thing that was problematic in cases that are most , nonetheless, was the accessibility of motorists.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this key elements of supply chain resilience:
Using this framework for the assessment of the interviews, the results show that few organizations had been well prepared for the corona crisis and in reality mostly applied responsive practices. The most important supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for versatility as well as agility. This seems especially complicated for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the potential to do so.
Next, it was observed that more attention was necessary on spreading threat and aiming for risk reduction inside the supply chain. For the future, this means far more attention ought to be given to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing techniques in cases in which need cannot be met. Explicit prioritization is actually needed to continue to satisfy market expectations but in addition to improve market shares where competitors miss options. This task is not new, though it’s also been underexposed in this specific problems and was usually not a component of preparatory activities.
Fourthly, the corona crisis teaches us that the monetary result of a crisis in addition depends on 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.
Lastly, relative to other purposeful departments, the operations and supply chain capabilities are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally switch the traditional considerations between logistics and production on the one hand as well as advertising and marketing on the other hand, the potential future must tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?