Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the planet. health and Economic indicators have been affected and all industries are touched inside one of the ways or even another. One of the industries in which it was clearly obvious is the farming and food business.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big effects 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 end of the chain (e.g., hoarding doing supermarkets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors inside the supply chain for that the impact is less clear. It is thus imperative that you figure out how properly the food supply chain as being a whole is armed to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Demand in retail up, in food service down It’s obvious and widely known that demand in the foodservice stations went down due to the closure of places, amongst others. In a few instances, sales for suppliers of the food service business as a result fell to aproximatelly twenty % of the initial volume. Being a side effect, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % greater than before the problems began.
Products that had to come via abroad had the own problems of theirs. With the change in need from foodservice to retail, the need for packaging changed dramatically, More tin, cup or plastic material was required for wearing in buyer packaging. As much more of this packaging material ended up in consumers’ homes rather than in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a significant affect on production activities. In some instances, this even meant a complete stop in output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall out on the foodservice sector). In other instances, a significant part of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability that is limited during the first weeks of the problems, and expenses that are high for container transport as a consequence. Truck transportation experienced various problems. At first, there were uncertainties regarding how transport would be managed at borders, which in the long run were not as strict as feared. What was problematic in cases that are most , nonetheless, was the availability of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this primary elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the conclusions indicate that few companies had been nicely prepared for the corona problems and in fact mostly applied responsive practices. The most notable supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This seems particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capacity to do so.
Second, it was discovered that more attention was needed on spreading threat as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be made available to the way companies depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually needed to continue to satisfy market expectations but additionally to increase market shares where competitors miss opportunities. This challenge is not new, though it’s additionally been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona issues teaches us that the financial result of a crisis also relies on the manner in which cooperation in the chain is actually set up. It is typically unclear exactly how further costs (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the operations and supply chain functionality are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional considerations between logistics and production on the one hand and marketing and advertising on the other hand, the long term will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?