Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the planet. Economic indicators and health have been affected and all industries are touched in one way or even another. Among the industries in which it was clearly apparent is the agriculture as well as food industry.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was apparent to numerous folks that there was a huge effect at the end of this chain (e.g., hoarding in supermarkets, restaurants closing) and at the start of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the supply chain for that the effect is less clear. It’s therefore imperative that you figure out how effectively the food supply chain as a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with about 30 Dutch supply chain actors.
Demand in retail up, contained food service down It is evident and well known that need in the foodservice stations went down on account of the closure of joints, amongst others. In certain cases, sales for suppliers of the food service industry therefore fell to about 20 % of the first 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 began.
Products that had to come through abroad had the own problems of theirs. With the change in demand from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic was required 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 system got disrupted too, causing shortages.
The shifts in demand have had a big effect on production activities. In certain cases, this even meant a complete stop of production (e.g. in the duck farming industry, which emerged to a standstill due to demand fall-out in the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capability which is limited throughout the first weeks of the crisis, and high expenses for container transport as a consequence. Truck transportation encountered various issues. At first, there were uncertainties about how transport will be handled at borders, which in the long run were not as rigid as feared. The thing that was problematic in cases that are a large number of , however, was the availability of motorists.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this main components of supply chain resilience:
To us this framework for the evaluation of the interview, the conclusions indicate that few organizations had been well prepared for the corona problems and actually mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
First, the need to create the supply chain for agility and flexibility. This looks especially complicated for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often do not have the capability to accomplish that.
Next, it was found that more attention was needed on spreading threat and aiming for risk reduction in the supply chain. For the future, meaning more attention has to be given to the way companies rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as clever rationing techniques in situations where demand cannot be met. Explicit prioritization is needed to continue to meet market expectations but additionally to increase market shares wherein competitors miss opportunities. This challenge isn’t new, however, it’s also been underexposed in this crisis and was often not part of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic effect of a crisis additionally depends on the way cooperation in the chain is actually set up. It’s usually unclear precisely how extra costs (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the classic discussions between creation and logistics on the one hand as well as advertising and marketing on the other, the potential future will have to explain to.
How is the Dutch food supply chain coping during the corona crisis?