Supply chain – The COVID 19 pandemic has certainly had the impact of its impact on the world. Economic indicators and health have been affected and all industries are touched within a way or even some other. One of the industries in which this was clearly apparent is the agriculture as well as food industry.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical 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 many stakeholders are impacted. Though it was clear to majority of men and women that there was a great effect at the tail end of the chain (e.g., hoarding in food markets, restaurants closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the source chain for which the impact is much less clear. It’s thus vital that you figure out how effectively the food supply chain as being a whole is actually armed to deal with disruptions. Researchers from 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, analyzed the effects of the COVID 19 pandemic all over the food supply chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand within retail up, contained food service down It’s evident and well known that need in the foodservice stations went down as a result of the closure of places, amongst others. In a few instances, sales for suppliers in the food service business thus fell to about twenty % of the initial volume. Being an adverse reaction, demand in the retail channels went up and remained within a level of aproximatelly 10-20 % higher than before the crisis started.
Products which had to come from abroad had the own problems of theirs. With the shift in demand from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic material was necessary for wearing in consumer packaging. As much more of this product packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had a major affect on output activities. In a few cases, this even meant a full stop in production (e.g. in the duck farming business, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted during the earliest weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transportation encountered various problems. At first, there were uncertainties regarding how transport would be handled for borders, which in the long run weren’t as strict as feared. What was problematic in cases that are a large number of , nonetheless, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the primary elements of supply chain resilience:
Using this framework for the evaluation of the interview, the findings show that not many organizations were well prepared for the corona problems and in reality mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This appears especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capability to accomplish that.
Second, it was discovered that more attention was needed on spreading danger and aiming for risk reduction within the supply chain. For the future, what this means is more attention has to be provided to the manner in which businesses rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as clever rationing techniques in situations in which need can’t be met. Explicit prioritization is actually necessary to keep on to meet market expectations but also to increase market shares wherein competitors miss options. This task isn’t new, however, it’s also been underexposed in this problems and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows us that the monetary effect of a crisis also is determined by the way cooperation in the chain is actually set up. It’s often unclear how extra costs (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain features are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the traditional discussions between creation and logistics on the one hand and marketing and advertising on the other, the long term will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?