Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been touched inside one way or yet another. Among the industries in which it was clearly obvious will be the farming as well as food business.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 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 major effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was apparent to many folks that there was a huge impact at the end of this chain (e.g., hoarding in supermarkets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors inside the supply chain for that the impact is much less clear. It’s thus important to figure out how properly the food supply chain as a whole is actually prepared to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food resources chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand in retail up, contained food service down It’s obvious and popular that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In some instances, sales for vendors in the food service business as a result fell to about 20 % of the original volume. Being an adverse reaction, demand in the list channels went up and remained at a degree of aproximatelly 10-20 % higher than before the crisis started.
Products which had to come through abroad had the own problems of theirs. With the change in need from foodservice to retail, the demand for packaging improved considerably, More tin, cup or plastic material was required for use in buyer packaging. As more of this particular packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a significant impact on output activities. In a few instances, this even meant a complete stop of production (e.g. in the duck farming industry, which emerged to a standstill on account of demand fall-out inside the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
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 capacity that is restricted during the first weeks of the crisis, and high expenses for container transport as a consequence. Truck travel faced various issues. To begin with, there were uncertainties regarding how transport would be handled at borders, which in the long run weren’t as rigid as feared. The thing that was problematic in situations which are many, nonetheless, was the accessibility of motorists.
The reaction to COVID 19 – supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the primary things of supply chain resilience:
To us this framework for the analysis of the interviews, the findings show that not many companies were well prepared for the corona crisis and actually mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
To begin with, the need to develop the supply chain for flexibility as well as agility. This looks particularly challenging for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often don’t have the capability to do it.
Second, it was discovered that much more attention was needed on spreading risk and also aiming for risk reduction inside the supply chain. For the future, meaning more attention should be provided to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing techniques in cases in which demand can’t be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to improve market shares where competitors miss options. This task is not new, although it’s also been underexposed in this specific crisis and was often not part of preparatory pursuits.
Fourthly, the corona issues shows us that the financial effect of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It is often unclear precisely how further costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain characteristics are in the driving seat 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 classic considerations between logistics and generation on the one hand and marketing on the other, the future will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?