Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the planet. health and Economic indicators have been compromised and all industries have been touched within a way or yet another. Among the industries in which it was clearly obvious would be the agriculture as well as food industry.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy and food security as many stakeholders are impacted. Even though it was clear to a lot of people that there was a huge impact at the end of this chain (e.g., hoarding around supermarkets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors inside the source chain for which the effect is less clear. It’s therefore vital that you figure out how well the food supply chain as being a whole is actually prepared to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Demand within retail up, in food service down It’s evident and popular that need in the foodservice channels went down due to the closure of restaurants, amongst others. In certain instances, sales for vendors of the food service business thus fell to about twenty % of the original volume. Being a side effect, demand in the retail stations went up and remained within a quality of about 10 20 % greater than before the problems began.
Goods that had to come from abroad had their very own problems. With the change in desire from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic material was necessary for wearing in consumer packaging. As much more of this particular packaging material ended up in consumers’ houses rather than in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had a big affect on output activities. In a few instances, this even meant a complete stop of output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity during the earliest weeks of the problems, and costs that are high for container transport as a consequence. Truck travel experienced various issues. To begin with, there were uncertainties regarding how transport will be handled at borders, which in the end weren’t as stringent as feared. That which was problematic in a large number of instances, nonetheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this main things of supply chain resilience:
Using this particular framework for the assessment of the interview, the findings indicate that not many businesses had been nicely prepared for the corona crisis and actually mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This looks especially complicated for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capacity to do so.
Next, it was observed that more interest was required on spreading risk as well as aiming for risk reduction in the supply chain. For the future, this means far more attention has to be made available to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in situations where demand can’t be met. Explicit prioritization is needed to keep on to meet market expectations but in addition to improve market shares in which competitors miss opportunities. This particular challenge is not new, but it has in addition been underexposed in this problems and was frequently not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the monetary result of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It is often unclear precisely how extra costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional considerations between creation and logistics on the one hand as well as marketing on the other, the future will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?