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 have been touched in one way or yet another. One of the industries in which it was clearly apparent is the agriculture and food industry.
Throughout 2019, the Dutch agriculture and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was apparent to numerous folks that there was a significant impact at the end of this chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the source chain for that the effect is less clear. It’s therefore important to find out how effectively the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It’s apparent and well known that need in the foodservice channels went down as a result of the closure of joints, amongst others. In some cases, sales for suppliers in the food service business therefore fell to aproximatelly twenty % of the first volume. Being a complication, demand in the list channels went up and remained within a degree of aproximatelly 10 20 % higher than before the problems started.
Goods that had to come via abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass or plastic was required for wearing in customer packaging. As much more of this packaging material ended up in consumers’ homes as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in demand have had an important effect on output activities. In certain instances, this even meant a complete stop of output (e.g. in the duck farming industry, which arrived to a standstill due to demand fall out inside the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability that is limited throughout the very first weeks of the crisis, and high costs for container transport as a consequence. Truck transport encountered various issues. Initially, there were uncertainties about how transport will be managed for borders, which in the end were not as strict as feared. What was problematic in instances that are a large number of , nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the primary elements of supply chain resilience:
To us this particular framework for the analysis of the interviews, the findings show that few organizations were nicely prepared for the corona problems and actually mostly applied responsive methods. The most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to develop the supply chain for agility as well as flexibility. This seems particularly complicated for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capacity to do so.
Second, it was found that much more attention was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be made available to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing strategies in cases where demand cannot be met. Explicit prioritization is actually necessary to keep on to meet market expectations but additionally to increase market shares where competitors miss opportunities. This particular task is not new, however, it’s in addition been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona issues shows us that the financial result of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It’s often unclear exactly how extra expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the basic discussions between logistics and production on the one hand as well as advertising and marketing on the other, the future must tell.
How is the Dutch foods supply chain coping throughout the corona crisis?