Supply chain – The COVID 19 pandemic has certainly had its impact impact on the planet. health and Economic indicators have been affected and all industries have been completely touched inside a way or perhaps yet another. Among the industries in which this was clearly obvious is the agriculture and food industry.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as many stakeholders are affected. Though it was apparent to most people that there was a big 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 finding customers), there are numerous actors inside the source chain for that will the effect is much less clear. It is therefore vital that you figure out how properly the food supply chain as a whole is armed to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It is apparent and popular that need in the foodservice channels went down on account of the closure of places, amongst others. In certain cases, sales for vendors in the food service industry thus fell to aproximatelly 20 % of the first volume. Being an adverse reaction, demand in the retail channels went up and remained at a degree of aproximatelly 10 20 % greater than before the crisis began.
Products which had to come via abroad had the own problems of theirs. With the shift in need from foodservice to retail, the need for packaging changed dramatically, More tin, glass and plastic material was needed for wearing in customer packaging. As much more of this particular packaging material ended up in consumers’ homes instead of in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a significant affect on output activities. In a few instances, this even meant a complete stop in production (e.g. within the duck farming industry, which emerged to a standstill on account of demand fall out in the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport electrical capacity which is restricted during the very first weeks of the crisis, and high costs for container transport as a result. Truck travel encountered various problems. Initially, there were uncertainties about how transport would be handled for borders, which in the end weren’t as strict as feared. That which was problematic in cases which are many, nevertheless, was the availability of drivers.
The reaction to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core things of supply chain resilience:
Using this framework for the evaluation of the interviews, the results show that few companies had been well prepared for the corona problems and in reality mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
For starters, the need to design the supply chain for flexibility and agility. This seems particularly complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often do not have the capability to do it.
Second, it was found that more attention was required on spreading danger and aiming for risk reduction within the supply chain. For the future, what this means is far more attention ought to be provided to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but additionally to boost market shares in which competitors miss opportunities. This challenge isn’t new, though it has additionally been underexposed in this problems and was frequently not a part of preparatory pursuits.
Fourthly, the corona issues shows us that the monetary impact of a crisis in addition depends on the way cooperation in the chain is set up. It is usually unclear exactly how further costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the traditional discussions between production and logistics on the one hand and advertising and marketing on the other hand, the long term must tell.
How’s the Dutch food supply chain coping during the corona crisis?