Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been compromised and all industries are touched inside one of the ways or some other. One of the industries in which this was clearly noticeable will be the farming as well as food business.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as many stakeholders are affected. Though it was clear to most folks that there was a huge impact at the tail end of the chain (e.g., hoarding around grocery stores, restaurants closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors inside the source chain for that will the impact is much less clear. It’s therefore important to determine how properly the food supply chain as being a whole is prepared to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need within retail up, in food service down It is evident and popular that need in the foodservice stations went down due to the closure of places, amongst others. In a few cases, sales for vendors in the food service industry thus fell to aproximatelly twenty % of the first volume. Being a complication, demand in the retail channels went up and remained at a degree of aproximatelly 10-20 % greater than before the problems began.
Goods that had to come from abroad had their very own issues. With the shift in need coming from foodservice to retail, the demand for packaging improved dramatically, More tin, cup or plastic was required for wearing in customer packaging. As much more of this product packaging material ended up in consumers’ houses instead of in restaurants, the cardboard recycling function got disrupted too, causing shortages.
The shifts in desire have had a big effect on production activities. In a few cases, this even meant a total stop in output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out on the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down pretty soon in 2020. This resulted in limited transport electrical capacity during the earliest weeks of the problems, and expenses which are high for container transport as a direct result. Truck travel encountered different problems. At first, 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 instances that are a large number of , nonetheless, was the availability of motorists.
The response to COVID 19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of the core components of supply chain resilience:
To us this framework for the assessment of the interview, the conclusions indicate that not many companies were well prepared for the corona crisis and actually mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to develop the supply chain for agility as well as versatility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the potential to accomplish that.
Next, it was observed that much more interest was needed on spreading risk and also aiming for risk reduction inside the supply chain. For the future, meaning more attention ought to be given to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and clever rationing techniques in cases in which need cannot be met. Explicit prioritization is needed to continue to satisfy market expectations but in addition to increase market shares wherein competitors miss opportunities. This challenge is not new, though it has additionally been underexposed in this specific crisis and was usually not a part of preparatory activities.
Fourthly, the corona issues teaches us that the economic impact of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is usually unclear exactly how further costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the traditional considerations between logistics and creation on the one hand as well as advertising on the other hand, the potential future will need to explain to.
How’s the Dutch meal supply chain coping during the corona crisis?