Supply chain – The COVID-19 pandemic has definitely had its impact impact on the world. Economic indicators and health have been compromised and all industries have been completely touched within one of the ways or yet another. Among the industries in which it was clearly obvious is the farming and food industry.
In 2019, the Dutch farming as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to most folks that there was a significant effect at the end of this chain (e.g., hoarding doing supermarkets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the source chain for which the effect is less clear. It’s thus important to figure out how effectively the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food supplies chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Demand within retail up, found food service down It’s obvious and well known that need in the foodservice channels went down as a result of the closure of places, amongst others. In a few instances, sales for vendors in the food service industry as a result fell to aproximatelly 20 % of the initial volume. As a side effect, demand in the retail channels went up and remained within a degree of about 10-20 % greater than before the problems began.
Goods that had to come from abroad had their own issues. With the change in need from foodservice to retail, the need for packaging changed dramatically, More tin, glass and plastic material was required for wearing in buyer packaging. As more of this product packaging material concluded up in consumers’ homes instead of in places, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a big impact on output activities. In a few cases, this even meant a full stop in output (e.g. inside the duck farming industry, which came to a standstill due to demand fall-out inside the foodservice sector). In other instances, a big portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits 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 limited during the first weeks of the problems, and high costs for container transport as a consequence. Truck travel experienced various issues. Initially, there were uncertainties on how transport will be managed at borders, which in the long run weren’t as rigid as feared. That which was problematic in instances which are a large number of, nonetheless, was the availability of drivers.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of the primary elements of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the results indicate that not many organizations had been nicely prepared for the corona crisis and actually mainly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
First, the need to design the supply chain for versatility as well as agility. This seems especially challenging for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capacity to do it.
Second, it was observed that much more interest was necessary on spreading risk and aiming for risk reduction within the supply chain. For the future, meaning more attention has to be given to the way organizations count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and intelligent rationing strategies in situations in which need can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but additionally to increase market shares wherein competitors miss opportunities. This challenge is not new, but it’s in addition been underexposed in this specific problems and was often not a component of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic impact of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is typically unclear exactly how extra costs (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally replace the basic considerations between generation and logistics on the one hand and advertising on the other, the long term will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?