Supply chain – The COVID-19 pandemic has undoubtedly had its impact impact on the world. health and Economic indicators have been affected and all industries are touched in a way or yet another. Among the industries in which this was clearly obvious will be the agriculture and food business.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020[1]. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to most people that there was a big impact at the end of this chain (e.g., hoarding doing grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the source chain for which the impact is much less clear. It’s therefore vital that you figure out how properly the food supply chain as a whole is actually armed to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Need within retail up, contained food service down It is obvious and popular that demand in the foodservice stations went down on account of the closure of places, amongst others. In a few instances, sales for suppliers of the food service business therefore fell to about 20 % of the initial volume. Being a side effect, demand in the retail channels went up and remained within a level of aproximatelly 10 20 % greater than before the problems started.
Products which had to come via abroad had the own problems of theirs. With the shift in need coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass or plastic was required for wearing in buyer packaging. As more of this packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a major effect on production activities. In certain cases, this even meant a full stop of output (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capability which is restricted during the first weeks of the issues, and high costs for container transport as a result. Truck transport experienced various issues. At first, there were uncertainties about how transport will be handled for borders, which in the long run weren’t as rigid as feared. What was problematic in instances that are many , nevertheless, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the primary things of supply chain resilience:
To us this framework for the analysis of the interview, the conclusions show that not many organizations had been well prepared for the corona problems and in reality mainly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for agility as well as versatility. This appears especially complicated for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the capacity to do so.
Second, it was found that much more attention was needed on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning far more attention should be made available to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases where demand cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but also to increase market shares where competitors miss options. This task isn’t new, but it’s additionally been underexposed in this problems and was frequently not a part of preparatory activities.
Fourthly, the corona issues shows you us that the financial result of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It is often unclear precisely how additional expenses (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally replace the basic considerations between logistics and production on the one hand as well as advertising and marketing on the other, the long term must tell.
How’s the Dutch food supply chain coping during the corona crisis?
