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 are touched inside one way or another. One of the industries in which this was clearly apparent will be the farming as well as food industry.
In 2019, the Dutch farming and food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality industry 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 significant effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to majority of people that there was a huge effect at the end of the chain (e.g., hoarding doing grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for that the effect is much less clear. It is thus imperative that you find out how properly the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as from 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 their analysis on interviews with about thirty Dutch source chain actors.
Need in retail up, that is found food service down It’s apparent and popular that demand in the foodservice channels went down due to the closure of places, amongst others. In a few cases, sales for suppliers in the food service industry as a result fell to about twenty % of the first volume. As an adverse reaction, demand in the list channels went up and remained at a level of aproximatelly 10-20 % greater than before the problems started.
Goods that had to come through abroad had their very own problems. With the change in desire from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic was required for wearing in consumer packaging. As more of this particular product packaging material ended up in consumers’ houses instead of in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had an important effect on output activities. In some cases, this even meant a total stop of production (e.g. within the duck farming business, which emerged to a standstill due to demand fall-out on the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capacity which is limited throughout the earliest weeks of the problems, and expenses which are high for container transport as a result. Truck transportation experienced various issues. To begin with, there were uncertainties on how transport will be handled at borders, which in the long run weren’t as stringent as feared. What was problematic in most instances, however, was the availability of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this core things of supply chain resilience:
Using this framework for the analysis of the interviews, the results show that not many businesses had been nicely prepared for the corona crisis and in reality mostly applied responsive practices. The most important supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
For starters, the need to design the supply chain for versatility as well as agility. This appears especially 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 potential to accomplish that.
Second, it was discovered that much more attention was required on spreading danger and aiming for risk reduction inside the supply chain. For the future, meaning more attention should be made available to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in situations in which need cannot be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but in addition to improve market shares where competitors miss options. This challenge isn’t new, however, it has in addition been underexposed in this specific problems and was often not part of preparatory activities.
Fourthly, the corona issues shows us that the financial impact of a crisis additionally relies on the way cooperation in the chain is set up. It’s often unclear precisely how further expenses (and benefits) are sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain functions are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally switch the traditional discussions between logistics and production on the one hand as well as advertising and marketing on the other, the potential future will need to explain to.
How’s the Dutch meal supply chain coping throughout the corona crisis?