Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. health and Economic indicators have been compromised and all industries have been touched in a way or yet another. One of the industries in which it was clearly noticeable is the farming as well as food business.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 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 the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Despite the fact that it was clear to numerous people that there was a huge impact at the tail end of the chain (e.g., hoarding in grocery stores, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for which the effect is less clear. It is thus vital that you figure out how effectively the food supply chain as a whole is equipped to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food supplies chain. They based their examination on interviews with around 30 Dutch source chain actors.
Need within retail up, that is found food service down It is evident and popular that need in the foodservice channels 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 twenty % of the initial volume. As an adverse reaction, demand in the retail stations went up and remained within a quality of about 10-20 % greater than before the problems started.
Products that had to come via abroad had their very own issues. With the shift in need from foodservice to retail, the demand for packaging changed dramatically, More tin, glass and plastic was required for use in buyer packaging. As much more of this particular packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a major effect on production activities. In certain instances, this even meant the full stop in production (e.g. within the duck farming industry, which came to a standstill on account of demand fall out on the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport electrical capacity which is limited throughout the very first weeks of the problems, and costs that are high for container transport as a result. Truck transport faced various issues. Initially, there were uncertainties on how transport will be handled for borders, which in the long run were not as rigid as feared. What was problematic in cases which are many, however, was the accessibility of motorists.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis 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 particular framework for the evaluation of the interview, the results show that not many companies had been nicely prepared for the corona problems and actually mainly applied responsive practices. 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 and versatility. This appears especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capacity to do so.
Second, it was discovered that more interest was necessary on spreading risk and also 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 necessary for explicit prioritization as well as intelligent rationing strategies in cases where need cannot be met. Explicit prioritization is actually necessary to continue to meet market expectations but additionally to boost market shares where competitors miss opportunities. This particular challenge isn’t new, although it has also been underexposed in this crisis and was frequently not a component of preparatory activities.
Fourthly, the corona problems shows you us that the financial impact of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is typically unclear exactly how additional expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain functions are in the driving accommodate during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the basic discussions between creation and logistics on the one hand and advertising and marketing on the other, the long term must tell.
How’s the Dutch foods supply chain coping during the corona crisis?