Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been completely touched within one way or even yet another. One of the industries in which this was clearly apparent will be the farming as well as food industry.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to numerous folks that there was a great effect at the tail end of this chain (e.g., hoarding around food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the source chain for that the effect is much less clear. It’s thus vital that you figure out how well the food supply chain as a whole is actually armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It’s evident and well known that demand in the foodservice channels went down as a result of the closure of places, amongst others. In some instances, sales for suppliers in the food service business therefore fell to aproximatelly 20 % of the initial volume. Being a side effect, demand in the list stations went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis started.
Goods that had to come through abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, glass or plastic was necessary for use in customer packaging. As much more of this product packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a major impact on output activities. In certain cases, this even meant a complete stop in output (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability which is limited during the earliest weeks of the problems, and expenses which are high for container transport as a consequence. Truck transport faced various problems. At first, there were uncertainties on how transport would be handled at borders, which in the end were not as strict as feared. What was problematic in situations that are a large number of , however, was the accessibility of motorists.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of the core things of supply chain resilience:
Using this particular framework for the analysis of the interview, the findings indicate that not many organizations were well prepared for the corona problems and in fact mainly applied responsive practices. The most important supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to create the supply chain for versatility as well as agility. This seems particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to do it.
Second, it was discovered that much more interest was needed on spreading risk and also aiming for risk reduction within the supply chain. For the future, what this means is more attention should be given to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing techniques in situations where demand cannot be met. Explicit prioritization is required to continue to satisfy market expectations but in addition to improve market shares where competitors miss options. This particular task isn’t new, but it has in addition been underexposed in this specific problems and was often not a part of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic impact of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It’s typically unclear how extra costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain works are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the classic considerations 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 foods supply chain coping during the corona crisis?