Supply chain – The COVID-19 pandemic has certainly had its impact effect on the planet. Economic indicators and health have been compromised and all industries have been completely touched within one way or some other. Among the industries in which this was clearly visible will be the farming and food industry.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was clear to numerous people that there was a significant effect at the conclusion of this chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the supply chain for that the effect is less clear. It’s therefore imperative that you determine how effectively the food supply chain as being a whole is equipped to contend with disruptions. Researchers in the Operations Research as well as 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 throughout the food resources chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need in retail up, contained food service down It’s apparent and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In some instances, sales for suppliers of the food service industry as a result fell to about 20 % of the original volume. As a complication, demand in the list stations went up and remained at a quality of aproximatelly 10 20 % higher than before the crisis began.
Products which 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, glass or plastic was required for use in consumer packaging. As more of this product packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important impact on output activities. In some instances, this even meant a complete stop of production (e.g. in the duck farming industry, which arrived to a standstill on account of demand fall out inside 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 facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport electrical capacity which is limited during the first weeks of the issues, and costs which are high for container transport as a direct result. Truck transport faced different issues. To begin with, there were uncertainties regarding how transport will be handled for borders, which in the long run were not as rigid as feared. That which was problematic in cases which are many, however, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of the core things of supply chain resilience:
To us this framework for the analysis of the interview, the results indicate that few businesses had been well prepared for the corona crisis and actually mainly applied responsive practices. Probably the most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to create the supply chain for agility and flexibility. This looks especially complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capacity to do so.
Next, it was observed that more interest was necessary on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, what this means is more attention ought to be provided to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and smart rationing techniques in situations where need can’t be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to improve market shares wherein competitors miss opportunities. This challenge is not new, but it’s additionally been underexposed in this specific crisis and was frequently not a part of preparatory activities.
Fourthly, the corona problems shows you us that the economic impact of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It is often unclear precisely how additional costs (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain works are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally change the basic discussions between logistics and generation on the one hand as well as advertising on the other, the potential future must explain to.
How’s the Dutch foods supply chain coping during the corona crisis?