Supply chain – The COVID 19 pandemic has certainly had the impact of its impact on the planet. Economic indicators and health have been compromised and all industries are touched within one way or perhaps some other. One of the industries in which this was clearly obvious would be the agriculture and food business.
In 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Despite the fact that it was apparent to most men and women that there was a great impact at the end of this chain (e.g., hoarding in supermarkets, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors in the source chain for that will the effect is less clear. It is therefore imperative that you determine how effectively the food supply chain as a whole is actually armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with about 30 Dutch source chain actors.
Demand within retail up, found food service down It is apparent and widely known that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some cases, sales for vendors in the food service industry as a result fell to aproximatelly twenty % of the original volume. As a side effect, demand in the retail channels went up and remained at a degree of aproximatelly 10 20 % higher than before the problems began.
Products that had to come through abroad had the own problems of theirs. With the shift in need from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was necessary for use in consumer packaging. As much more of this particular packaging material ended up in consumers’ homes as opposed to in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had a significant impact on production activities. In some instances, this even meant the full stop of production (e.g. in the duck farming industry, which emerged to a standstill on account of demand fall out inside the foodservice sector). In other cases, a big part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in restricted transport electrical capacity during the earliest weeks of the issues, and high expenses for container transport as a result. Truck travel faced various issues. At first, there were uncertainties on how transport will be managed at borders, which in the end weren’t as strict as feared. That which was problematic in instances that are a large number of , nevertheless, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of the key components of supply chain resilience:
Using this framework for the evaluation of the interviews, the conclusions indicate that not many organizations had been well prepared for the corona crisis and actually mainly applied responsive practices. The most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to develop the supply chain for agility as well as versatility. This looks particularly complicated 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 capacity to do so.
Next, it was observed that more attention was required on spreading threat as well as aiming for risk reduction in the supply chain. For the future, this means more attention ought to be given to the way businesses count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in cases where need cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but in addition to boost market shares in which competitors miss options. This challenge is not new, but it’s also been underexposed in this problems and was usually not a component of preparatory activities.
Fourthly, the corona problems shows us that the financial result of a crisis also depends on the way cooperation in the chain is actually set up. It’s typically unclear precisely how further costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functions are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional considerations between creation and logistics on the one hand and advertising and marketing on the other hand, the potential future must explain to.
How’s the Dutch food supply chain coping during the corona crisis?