Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the world. Economic indicators and health have been affected and all industries have been touched within a way or yet another. Among the industries in which this was clearly noticeable would be the agriculture and food business.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy as well as food security as many stakeholders are affected. Though it was apparent to many folks that there was a significant effect at the conclusion of the chain (e.g., hoarding in supermarkets, eateries closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the supply chain for that will the effect is much less clear. It’s therefore vital that you figure out how well the food supply chain as being a whole is actually equipped to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic all over the food supply chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, in food service down It is obvious and well known that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In a few cases, sales for vendors of the food service business as a result fell to aproximatelly 20 % of the first volume. Being a side effect, demand in the list channels went up and remained at a quality of aproximatelly 10 20 % higher than before the crisis began.
Products that had to come via abroad had the own problems of theirs. With the shift in need coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was needed for wearing in buyer packaging. As much more of this particular packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a major effect on production activities. In some cases, this even meant a complete stop of output (e.g. within the duck farming industry, which arrived to a standstill due to demand fall-out on the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in restricted transport electrical capacity during the very first weeks of the issues, and expenses which are high for container transport as a consequence. Truck travel faced various issues. At first, there were uncertainties regarding how transport would be managed for borders, which in the long run weren’t as strict as feared. What was problematic in most situations, nonetheless, was the availability of drivers.
The response to COVID 19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of this primary elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results indicate that not many companies had been well prepared for the corona problems and in fact mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This appears especially challenging for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capability to do so.
Second, it was found that much more interest was necessary on spreading threat and also aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be given to the manner in which companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing strategies in cases in which need can’t be met. Explicit prioritization is needed to keep on to meet market expectations but additionally to boost market shares where competitors miss opportunities. This task isn’t new, however, it has in addition been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona crisis shows you us that the financial result of a crisis additionally relies on the way cooperation in the chain is set up. It’s typically unclear how extra costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain operates are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally change the basic considerations between creation and logistics on the one hand and marketing and advertising on the other hand, the potential future will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?