Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been affected and all industries are touched within one of the ways or another. One of the industries in which this was clearly visible will be the agriculture as well as food business.
In 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality trade 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 major consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was clear to many folks that there was a great impact at the conclusion of the chain (e.g., hoarding around supermarkets, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for that will the impact is much less clear. It’s thus important to determine how properly the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food resources chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand in retail up, that is found food service down It is evident and popular that demand in the foodservice stations went down on account of the closure of joints, amongst others. In certain cases, sales for vendors in the food service business as a result fell to aproximatelly 20 % of the initial volume. Being a side effect, demand in the list stations went up and remained within a degree of about 10-20 % higher than before the crisis began.
Products that had to come from abroad had the own problems of theirs. With the change in demand coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was needed for wearing in consumer packaging. As more of this packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a major impact on output activities. In certain cases, this even meant a full stop of production (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity that is limited throughout the earliest weeks of the problems, and costs that are high for container transport as a result. Truck travel encountered different problems. At first, there were uncertainties on how transport would be managed at borders, which in the long run were not as strict as feared. What was problematic in situations which are many, nonetheless, was the accessibility of motorists.
The response to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the core elements of supply chain resilience:
To us this framework for the evaluation of the interview, the results indicate that not many companies were nicely prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility and flexibility. This seems especially complicated for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to do so.
Next, it was found that more interest was required on spreading threat and aiming for risk reduction inside the supply chain. For the future, meaning far more attention ought to be provided to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in cases where demand cannot be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to boost market shares wherein competitors miss opportunities. This particular challenge is not new, though it has additionally been underexposed in this specific crisis and was often not a component of preparatory activities.
Fourthly, the corona issues teaches us that the financial effect of a crisis additionally is determined by the way cooperation in the chain is set up. It is usually unclear precisely how further costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally replace the traditional discussions between logistics and generation on the one hand as well as marketing and advertising on the other, the future will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?