Supply chain – The COVID 19 pandemic has definitely had its impact effect on the planet. Economic indicators and health have been affected and all industries have been touched within one of the ways or even some other. One of the industries in which it was clearly noticeable would be the farming as well as food business.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was apparent to numerous people that there was a huge effect at the end of this chain (e.g., hoarding doing supermarkets, restaurants closing) and at the start of the chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the supply chain for that the impact is much less clear. It’s therefore imperative that you figure out how effectively the food supply chain as a whole is prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supplies chain. They based their analysis on interviews with about 30 Dutch supply chain actors.
Need in retail up, contained food service down It is obvious and well known that need in the foodservice channels went down due to the closure of places, amongst others. In a few cases, sales for vendors in the food service business thus fell to about twenty % of the original volume. As a complication, demand in the retail channels went up and remained within a degree of about 10 20 % greater than before the problems began.
Goods that had to come through abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic material was needed for wearing in consumer packaging. As more of this particular product packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had an important affect on output activities. In certain instances, this even meant a full stop in output (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
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 first weeks of the problems, and expenses which are high for container transport as a consequence. Truck travel experienced different problems. Initially, there were uncertainties on how transport would be handled for borders, which in the long run weren’t as strict as feared. The thing that was problematic in cases that are most , nonetheless, was the availability of motorists.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the main elements of supply chain resilience:
To us this framework for the assessment of the interviews, the findings indicate that not many organizations were nicely prepared for the corona crisis and in reality mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to develop the supply chain for versatility as well as agility. This appears particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often do not have the capability to accomplish that.
Next, it was found that much more attention was necessary on spreading risk and also aiming for risk reduction inside the supply chain. For the future, this means more attention should be given to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing strategies in cases in which need can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but also to increase market shares where competitors miss options. This task is not new, however, it has in addition been underexposed in this specific crisis and was frequently not a part of preparatory activities.
Fourthly, the corona problems teaches us that the financial effect of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It’s usually unclear exactly 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 businesses and supply chain works are in the driving accommodate during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the traditional discussions between logistics and creation on the one hand and advertising and marketing on the other hand, the future must explain to.
How’s the Dutch foods supply chain coping during the corona crisis?