Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the planet. Economic indicators and health have been affected and all industries are touched inside a way or even yet another. Among the industries in which it was clearly apparent would be the farming and food business.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Even though it was clear to majority of people that there was a huge effect at the end of the chain (e.g., hoarding in grocery stores, eateries closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the supply chain for which the impact is much less clear. It’s therefore imperative that you find out how well the food supply chain as being a whole is equipped to contend with disruptions. Researchers from your Operations Research and 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 all over the food supplies chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Need in retail up, found food service down It’s apparent and popular that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some cases, sales for vendors of the food service business thus fell to aproximatelly 20 % of the original volume. As an adverse reaction, demand in the list stations went up and remained within a level of aproximatelly 10 20 % higher than before the problems started.
Products that had to come from abroad had the own problems of theirs. With the shift in need from foodservice to retail, the need for packaging changed considerably, More tin, glass or plastic was needed for use in consumer packaging. As much more of this product packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important impact on output activities. In a few instances, this even meant a complete stop of production (e.g. inside the duck farming industry, which emerged to a standstill on account of demand fall out on the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capability which is restricted during the very first weeks of the issues, and expenses which are high for container transport as a direct result. Truck transport experienced different issues. Initially, there were uncertainties about how transport would be handled for borders, which in the long run weren’t as strict as feared. What was problematic in many instances, however, was the accessibility 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 used on the overview of the core components of supply chain resilience:
Using this particular framework for the analysis of the interview, the conclusions indicate that few businesses had been well prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility as well as agility. This seems especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capability to do it.
Next, it was discovered that more attention was required on spreading threat and also aiming for risk reduction within the supply chain. For the future, what this means is more attention ought to be given to the way businesses count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases in which demand can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but additionally to boost market shares in which competitors miss options. This particular task isn’t new, but it’s additionally been underexposed in this problems and was usually not a part of preparatory activities.
Fourthly, the corona problems shows you us that the monetary result of a crisis additionally relies on the manner in which cooperation in the chain is set up. It is usually unclear how extra expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain works are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic discussions between logistics and production on the one hand as well as marketing and advertising on the other hand, the future will have to tell.
How is the Dutch food supply chain coping during the corona crisis?