Supply chain – The COVID 19 pandemic has certainly had the impact of its impact on the planet. health and Economic indicators have been compromised and all industries are touched in a way or perhaps another. Among the industries in which this was clearly visible would be the farming and food industry.
In 2019, the Dutch farming and food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 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 in the food chain have significant effects for the Dutch economy as well as food security as many stakeholders are affected. Though it was clear to majority of individuals that there was a significant effect at the conclusion 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), there are many actors within the supply chain for that will the impact is less clear. It is therefore imperative that you find out how properly the food supply chain as a whole is actually armed to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food supplies chain. They based their analysis on interviews with around thirty Dutch source chain actors.
Need within retail up, that is found food service down It’s apparent and well known that need in the foodservice channels went down due to the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service business thus fell to aproximatelly twenty % of the original volume. Being a complication, demand in the list channels went up and remained at a level of about 10 20 % greater than before the crisis started.
Products that had to come from abroad had the own issues of theirs. With the shift in need coming from foodservice to retail, the demand for packaging improved considerably, More tin, cup and plastic material was necessary for use in consumer packaging. As more of this particular packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had an important affect on production activities. In a few cases, this even meant a total stop in output (e.g. inside the duck farming business, which emerged to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea bins to slow down pretty shortly in 2020. This resulted in restricted transport capability during the earliest weeks of the crisis, and high costs for container transport as a consequence. Truck transportation faced various issues. To begin with, there were uncertainties regarding how transport would be managed at borders, which in the long run were not as strict as feared. That which was problematic in many instances, nevertheless, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key components of supply chain resilience:
To us this particular framework for the analysis of the interview, the results show that few organizations had been nicely prepared for the corona problems and in reality mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
First, the need to create the supply chain for versatility and agility. This looks particularly challenging for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capability to do so.
Second, it was observed that much more attention was required on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, meaning more attention has to be given to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing techniques in situations in which need cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but in addition to boost market shares wherein competitors miss options. This task is not new, although it has also been underexposed in this problems and was often not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic effect of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It’s often unclear precisely how additional expenses (and benefits) are sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain functionality are actually in the driving seat during a crisis. Product development and advertising activities have to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally switch the traditional considerations between creation and logistics on the one hand as well as advertising on the other, the future will have to explain to.
How’s the Dutch food supply chain coping during the corona crisis?