Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries have been touched in one way or perhaps some other. Among the industries in which it was clearly visible is the farming and food business.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 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 in the food chain have significant consequences for the Dutch economy as well as food security as many stakeholders are affected. Despite the fact that it was clear to many individuals that there was a big impact at the tail end of this chain (e.g., hoarding around grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for which the effect is much less clear. It is thus imperative that you determine how effectively the food supply chain as being a whole is equipped to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Need in retail up, that is found food service down It is obvious and popular that demand in the foodservice channels went down as a result of the closure of places, amongst others. In certain cases, sales for vendors in the food service business as a result fell to aproximatelly twenty % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained at a level of aproximatelly 10-20 % higher than before the problems started.
Goods that had to come from abroad had their own problems. With the change in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic was needed for use in customer packaging. As more of this packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a significant affect on output activities. In certain cases, this even meant the full stop of production (e.g. inside the duck farming industry, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capacity that is restricted throughout the first weeks of the problems, and expenses which are high for container transport as a consequence. Truck transport experienced different problems. To begin with, there were uncertainties about how transport will be handled for borders, which in the long run weren’t as strict as feared. What was problematic in many situations, nevertheless, was the accessibility of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the primary elements of supply chain resilience:
Using this framework for the assessment of the interviews, the results show that not many companies had been nicely prepared for the corona problems and in fact mainly applied responsive methods. The most notable source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to create the supply chain for agility as well as flexibility. This appears especially challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capacity to accomplish that.
Next, it was observed that more attention was required on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, this means more attention has to be given to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in cases where need can’t be met. Explicit prioritization is needed to keep on to meet market expectations but additionally to improve market shares wherein competitors miss options. This particular challenge isn’t new, though it has also been underexposed in this crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona crisis shows you 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 additional costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain capabilities are in the driving accommodate during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally switch the classic considerations between logistics and creation on the one hand as well as marketing on the other, the long term must explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?