Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the world. health and Economic indicators have been compromised and all industries have been touched in one of the ways or perhaps yet another. Among the industries in which this was clearly visible is the farming and food business.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was clear to numerous men and women that there was a great effect at the conclusion of this chain (e.g., hoarding in food markets, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find many actors inside the supply chain for that will the effect is less clear. It’s therefore vital that you determine how well the food supply chain as a whole is prepared to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as from 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 the examination of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, contained food service down It is obvious and widely known that need in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for vendors in the food service industry thus fell to about twenty % of the initial volume. As a complication, demand in the retail stations went up and remained within a level of aproximatelly 10-20 % higher than before the crisis began.
Goods that had to come via abroad had their very own issues. With the change in desire coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup or plastic was required for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a big impact on output activities. In some instances, this even meant a full stop of production (e.g. inside the duck farming industry, which emerged to a standstill on account of demand fall out on the foodservice sector). In other situations, a big section of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the problems, and costs which are high for container transport as a direct result. Truck transportation faced different problems. Initially, there were uncertainties regarding how transport would be managed at borders, which in the end weren’t as strict as feared. The thing that was problematic in situations that are most , however, was the availability 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 the main components of supply chain resilience:
To us this framework for the analysis of the interviews, the findings show that not many organizations were nicely prepared for the corona crisis and actually mainly applied responsive practices. The most important source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to design the supply chain for agility and versatility. This looks especially challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capability to do it.
Next, it was found that much more interest was required on spreading risk as well as aiming for risk reduction in the supply chain. For the future, this means 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 intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but in addition to boost market shares where competitors miss opportunities. This particular challenge is not new, although it has in addition been underexposed in this specific problems and was usually not a part of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic result of a crisis also depends on the way cooperation in the chain is set up. It’s usually unclear precisely how extra costs (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain operates are actually in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally replace the traditional discussions between generation and logistics on the one hand and marketing and advertising on the other hand, the long term must explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?