Supply chain – The COVID 19 pandemic has definitely had its impact impact on the planet. health and Economic indicators have been affected and all industries have been completely touched in a way or another. One of the industries in which it was clearly noticeable will be the agriculture and food business.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was clear to most folks that there was a big effect at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are many actors within the supply chain for that will the impact is much less clear. It’s therefore important to figure out how effectively the food supply chain as being a whole is actually armed to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food supply chain. They based their examination on interviews with around 30 Dutch source chain actors.
Demand within retail up, found food service down It’s apparent and widely known that demand in the foodservice stations went down due to the closure of places, amongst others. In some cases, sales for vendors of the food service business thus fell to aproximatelly 20 % of the original volume. Being a side effect, demand in the retail stations went up and remained at a degree of about 10 20 % higher than before the crisis began.
Products that had to come via abroad had their very own problems. With the change in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic material was needed for use in customer packaging. As more of this particular product packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had a big affect on output activities. In certain instances, this even meant the full stop of output (e.g. inside the duck farming industry, which emerged to a standstill on account of demand fall-out inside the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in restricted transport capacity during the first weeks of the problems, and high expenses for container transport as a result. Truck transport encountered various issues. To begin with, there were uncertainties on how transport would be handled for borders, which in the end weren’t as rigid as feared. What was problematic in situations that are most , nonetheless, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the primary elements of supply chain resilience:
To us this particular framework for the assessment of the interviews, the findings show that not many companies were nicely prepared for the corona problems and in reality mainly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
First, the need to design the supply chain for agility and flexibility. This seems especially challenging for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capability to do so.
Next, it was found that much more interest was necessary on spreading threat and also aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be given to the way companies depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and smart rationing strategies in situations in which need can’t be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to improve market shares wherein competitors miss options. This particular task isn’t new, though it has in addition been underexposed in this specific problems and was frequently not part of preparatory activities.
Fourthly, the corona issues shows you us that the financial impact 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 actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functions 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 activities. Regardless of whether the corona pandemic will structurally change the basic discussions between logistics and creation on the one hand as well as marketing and advertising on the other, the potential future will need to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?