Supply chain – The COVID 19 pandemic has certainly had its impact impact on the world. health and Economic indicators have been affected and all industries are touched within one of the ways or another. Among the industries in which this was clearly apparent is the agriculture as well as food industry.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 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 major consequences for the Dutch economy as well as food security as many stakeholders are affected. Even though it was clear to most individuals that there was a huge effect at the tail end of the chain (e.g., hoarding around food markets, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for which the impact is much less clear. It’s therefore imperative that you find out how effectively the food supply chain as being a whole is actually equipped to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based their analysis on interviews with about 30 Dutch source chain actors.
Need in retail up, in food service down It is obvious and widely known that need in the foodservice channels went down due to the closure of places, amongst others. In some cases, sales for suppliers in the food service business therefore fell to about 20 % of the original volume. As an adverse reaction, demand in the list stations went up and remained within a quality of aproximatelly 10-20 % higher than before the problems started.
Goods that had to come from abroad had the own issues of theirs. With the shift in desire from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic was necessary for wearing in buyer packaging. As much more of this product packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had a big effect on production activities. In some instances, this even meant a full stop in production (e.g. in the duck farming business, which came to a standstill as a result of demand fall-out inside the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capacity which is limited throughout the first weeks of the issues, and expenses that are high for container transport as a consequence. Truck transportation encountered different problems. At first, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in many situations, nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this key things of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions show that not many businesses had been well prepared for the corona crisis and in fact mainly applied responsive practices. The most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to create the supply chain for flexibility and agility. This looks particularly challenging for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations often do not have the capacity to accomplish that.
Next, it was observed that more attention was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, this means far more attention has to be provided to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in cases where need cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but additionally to increase market shares wherein competitors miss options. This particular challenge isn’t new, although it’s also been underexposed in this problems and was usually not a part of preparatory activities.
Fourthly, the corona crisis shows us that the financial effect of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is usually unclear how further costs (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the classic considerations between creation and logistics on the one hand and advertising on the other, the potential future will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?