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 are touched in a way or some other. One of the industries in which this was clearly visible will be the agriculture and food industry.
In 2019, the Dutch farming and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Though it was apparent to a lot of men and women that there was a huge impact at the tail end of the chain (e.g., hoarding around grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the source chain for that the impact is much less clear. It’s therefore imperative that you figure out how well the food supply chain as being a whole is actually prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Need in retail up, in food service down It’s apparent and widely known that demand in the foodservice channels went down on account of the closure of places, amongst others. In certain cases, sales for vendors in the food service business thus fell to aproximatelly twenty % of the initial volume. Being a complication, demand in the retail channels went up and remained within a degree of about 10-20 % higher than before the problems began.
Products that had to come from abroad had the own issues of theirs. With the shift in desire coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup or plastic was needed for use in customer packaging. As much more of this packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a significant effect on production activities. In certain instances, this even meant a total stop of output (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out in the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capability that is restricted throughout the earliest weeks of the crisis, and high costs for container transport as a consequence. Truck travel encountered different problems. At first, there were uncertainties regarding how transport will be handled for borders, which in the long run weren’t as strict as feared. That which was problematic in instances which are a large number of, however, was the availability of motorists.
The response to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the primary things of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the conclusions indicate that few organizations were nicely prepared for the corona problems and in fact mainly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as flexibility. This appears especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often do not have the potential to accomplish that.
Second, it was found that more attention was necessary on spreading danger and aiming for risk reduction in the supply chain. For the future, meaning far more attention should be provided to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in situations where need cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to increase market shares in which competitors miss opportunities. This particular task is not new, however, it’s additionally been underexposed in this crisis and was usually not part of preparatory activities.
Fourthly, the corona issues shows us that the economic effect of a crisis additionally depends on the way cooperation in the chain is actually set up. It’s usually unclear precisely how extra expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally replace the basic considerations between generation and logistics on the one hand and marketing on the other hand, the potential future will have to tell.
How is the Dutch meal supply chain coping throughout the corona crisis?