Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the planet. health and Economic indicators have been compromised and all industries have been completely touched within one way or even another. One of the industries in which it was clearly noticeable will be the agriculture as well as food business.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are affected. Though it was apparent to numerous people that there was a significant impact at the end of this chain (e.g., hoarding doing food markets, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors within the source chain for that the impact is less clear. It’s therefore vital that you figure out how effectively the food supply chain as being a whole is prepared to deal 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 effects of the COVID-19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It’s evident and widely known that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few cases, sales for suppliers in the food service business therefore fell to aproximatelly 20 % of the first volume. As a side effect, demand in the list channels went up and remained at a level of aproximatelly 10-20 % higher than before the crisis started.
Goods that had to come via abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic was necessary for wearing in consumer packaging. As more of this particular packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a major effect on output activities. In a few cases, this even meant a complete stop of production (e.g. inside the duck farming business, which came to a standstill as a result of demand fall out on the foodservice sector). In other cases, a big 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 beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted throughout the earliest weeks of the issues, and costs which are high for container transport as a direct result. Truck transportation faced various issues. To begin with, there were uncertainties on how transport would be handled for borders, which in the end were not as stringent as feared. What was problematic in situations that are many , however, was the availability of drivers.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the main elements of supply chain resilience:
Using this particular framework for the evaluation of the interview, the conclusions show that few businesses were nicely prepared for the corona problems and in fact mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
First, the need to create the supply chain for agility and flexibility. This looks especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the potential to accomplish that.
Next, it was found that much more interest was necessary on spreading threat and aiming for risk reduction inside the supply chain. For the future, meaning more attention should be made available to the way organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing strategies in situations where need can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but additionally to improve market shares where competitors miss opportunities. This particular task is not new, however, it’s additionally been underexposed in this specific problems and was usually not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the monetary result of a crisis additionally relies on the way cooperation in the chain is set up. It’s often unclear precisely how further costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally switch the basic discussions between logistics and production on the one hand and advertising on the other hand, the future will need to explain to.
How is the Dutch foods supply chain coping during the corona crisis?