Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been compromised and all industries have been touched inside a way or perhaps yet another. Among the industries in which it was clearly noticeable will be the farming as well as food industry.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to many folks that there was a significant effect at the tail end of this chain (e.g., hoarding around food markets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find many actors within the supply chain for that will the effect is much less clear. It is therefore important to find out how well the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Demand in retail up, contained food service down It’s evident and well known that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In a few cases, sales for suppliers of the food service industry therefore fell to about 20 % of the initial volume. Being a complication, demand in the list stations went up and remained within a level of aproximatelly 10-20 % higher than before the problems started.
Products which had to come from abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the demand for packaging improved dramatically, More tin, glass and plastic material was needed for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling function 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 full stop in output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in restricted transport capacity during the earliest weeks of the problems, and expenses which are high for container transport as a result. Truck transportation encountered various issues. To begin with, there were uncertainties regarding how transport would be managed for borders, which in the end weren’t as stringent as feared. That which was problematic in cases 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 Colleagues and Leeuw, was used on the overview of this key elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the conclusions indicate that few businesses were well prepared for the corona problems and actually mainly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capacity to do so.
Second, it was observed that much more attention was needed on spreading threat and also aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be given to the way businesses count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in situations where need can’t be met. Explicit prioritization is actually required to keep on to satisfy market expectations but additionally to boost market shares where competitors miss options. This particular task isn’t new, though it has in addition been underexposed in this specific problems and was often not a part of preparatory pursuits.
Fourthly, the corona issues shows you us that the financial effect of a crisis additionally is determined by the way cooperation in the chain is set up. It’s often unclear precisely how further expenses (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally replace the traditional considerations between logistics and production on the one hand and marketing and advertising on the other, the potential future will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?