Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been completely touched inside one of the ways or perhaps another. Among the industries in which it was clearly apparent will be the farming as well as food business.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as a lot of stakeholders are affected. Though it was apparent to most individuals that there was a big impact at the tail end of the chain (e.g., hoarding doing grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors within the supply chain for that will the effect is less clear. It’s therefore important to find out how well the food supply chain as a whole is armed to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Need in retail up, in food service down It’s obvious and well known that need in the foodservice stations went down due to the closure of joints, amongst others. In some instances, sales for suppliers in the food service industry thus fell to about 20 % of the original volume. As an adverse reaction, demand in the retail channels went up and remained within a level of aproximatelly 10 20 % greater than before the problems started.
Products which had to come through abroad had the own issues of theirs. With the change in demand coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was required for use in consumer packaging. As much more of this product packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a significant impact on output activities. In some instances, this even meant a total stop of production (e.g. within the duck farming business, which emerged to a standstill on account of demand fall-out on the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in limited transport capability during the first weeks of the issues, and high expenses for container transport as a consequence. Truck transport faced different problems. To begin with, there were uncertainties regarding how transport would be handled for borders, which in the long run were not as strict as feared. What was problematic in many instances, nevertheless, was the availability of motorists.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this primary things of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the findings show that few companies had been nicely prepared for the corona crisis and in fact mainly applied responsive methods. The most notable supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This appears especially complicated for smaller 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 it.
Next, it was observed that much more attention was needed on spreading risk and aiming for risk reduction in the supply chain. For the future, meaning far more attention has to be made available to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing strategies in cases where need can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but additionally to improve market shares in which competitors miss options. This particular task is not new, although it has in addition been underexposed in this problems and was often not a part of preparatory activities.
Fourthly, the corona problems shows us that the financial impact of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is often unclear exactly how additional costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain works are in the driving seat 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 basic considerations between production and logistics on the one hand and marketing on the other hand, the future will have to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?