Supply chain – The COVID 19 pandemic has definitely had its impact influence on the world. health and Economic indicators have been compromised and all industries are touched in one way or another. Among the industries in which it was clearly visible is the agriculture as well as food industry.
In 2019, the Dutch farming and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Even though it was clear to a lot of individuals that there was a significant impact at the tail end of this chain (e.g., hoarding in supermarkets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the source chain for that will the effect is less clear. It’s thus vital that you figure out how properly the food supply chain as a whole is equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with around 30 Dutch source chain actors.
Demand within retail up, found food service down It is obvious and well known that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service industry therefore fell to aproximatelly twenty % of the original volume. Being a side effect, demand in the retail channels went up and remained within a level of aproximatelly 10-20 % greater than before the problems started.
Products that had to come from abroad had the own problems of theirs. With the change in need from foodservice to retail, the requirement for packaging improved considerably, More tin, cup and plastic was needed for wearing in consumer packaging. As much more of this product packaging material concluded up in consumers’ homes as opposed to in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had an important affect on output activities. In a few instances, this even meant a full stop of output (e.g. within the duck farming industry, which arrived to a standstill due to demand fall out on the foodservice sector). In other instances, a major section 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 start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in limited transport capability during the earliest weeks of the problems, and costs which are high for container transport as a consequence. Truck transportation encountered various problems. At first, there were uncertainties on how transport would be handled for borders, which in the end weren’t as strict as feared. The thing that was problematic in instances that are many , however, was the accessibility of motorists.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key things of supply chain resilience:
To us this framework for the analysis of the interview, the conclusions show that not many businesses had been nicely prepared for the corona crisis and in fact mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for flexibility as well as agility. This seems particularly challenging for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the potential to do it.
Second, it was observed that much more attention was necessary on spreading threat and also aiming for risk reduction within the supply chain. For the future, this means far more attention has to be made available to the way companies rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as clever rationing techniques in situations where demand cannot be met. Explicit prioritization is actually required to continue to meet market expectations but also to boost market shares in which competitors miss opportunities. This particular challenge is not new, however, it has in addition been underexposed in this specific crisis and was usually not a component of preparatory activities.
Fourthly, the corona problems shows us that the financial result of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s usually unclear how extra costs (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain works are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally change the traditional discussions between logistics and production on the one hand and advertising on the other, the long term will have to explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?