Supply chain – The COVID 19 pandemic has certainly had its impact influence on the world. Economic indicators and health have been compromised and all industries have been touched in one of the ways or another. One of the industries in which it was clearly visible will be the farming and food industry.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was apparent to numerous men and women that there was a big impact at the end of this chain (e.g., hoarding around supermarkets, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors in the source chain for that the effect is less clear. It’s thus imperative that you find out how well the food supply chain as being a whole is actually armed to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also out of 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 30 Dutch source chain actors.
Demand in retail up, in food service down It’s apparent and popular that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry therefore fell to aproximatelly 20 % of the original 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 crisis started.
Products which had to come through abroad had the own issues of theirs. With the shift in demand from foodservice to retail, the demand for packaging changed dramatically, More tin, glass and plastic material was necessary for wearing in consumer packaging. As more of this product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had an important affect on output activities. In certain instances, this even meant a full stop in production (e.g. within the duck farming industry, which emerged to a standstill as a result of demand fall-out inside the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capacity which is limited during the very first weeks of the problems, and high costs for container transport as a direct result. Truck transport encountered different problems. To begin with, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as rigid as feared. The thing that was problematic in many situations, however, was the accessibility of drivers.
The response to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this key elements of supply chain resilience:
Using this framework for the assessment of the interview, the conclusions indicate that not many companies were nicely prepared for the corona problems and in fact mainly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
For starters, the need to create the supply chain for agility as well as flexibility. This seems especially challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to do so.
Second, it was found that much more interest was needed on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, meaning more attention has to be made available to the way companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing strategies in cases where need cannot be met. Explicit prioritization is needed to keep on to satisfy market expectations but in addition to improve market shares in which competitors miss options. This challenge isn’t 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 teaches us that the economic impact of a crisis in addition relies on the way cooperation in the chain is set up. It is usually unclear precisely how extra costs (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain activities. Whether the corona pandemic will structurally switch the traditional discussions between logistics and creation on the one hand as well as advertising and marketing on the other hand, the potential future must tell.
How’s the Dutch foods supply chain coping during the corona crisis?