Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the planet. Economic indicators and health have been affected and all industries are touched within one of the ways or another. Among the industries in which it was clearly visible would be the agriculture and food business.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy and food security as many stakeholders are affected. Even though it was apparent to a lot of individuals that there was a huge effect at the tail end of the chain (e.g., hoarding around supermarkets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors in the supply chain for that will the impact is much less clear. It is thus vital that you find out how well the food supply chain as being a whole is equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also 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 analysis of theirs on interviews with around thirty Dutch supply chain actors.
Demand in retail up, found food service down It is obvious and widely known that demand in the foodservice channels went down due to the closure of joints, amongst others. In a few cases, sales for vendors of the food service industry therefore fell to aproximatelly 20 % of the original volume. As a complication, demand in the list channels went up and remained at a quality of aproximatelly 10-20 % greater than before the problems started.
Products which had to come from abroad had their very own issues. With the change in need coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic was necessary for wearing in buyer packaging. As more of this product packaging material ended up in consumers’ houses instead of in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a significant effect on production activities. In some cases, this even meant a full stop in production (e.g. in the duck farming industry, which emerged to a standstill due to demand fall out in the foodservice sector). In other instances, a big portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea containers to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity during the very first weeks of the crisis, and expenses that are high for container transport as a result. Truck transport faced different problems. At first, there were uncertainties on how transport would be handled at borders, which in the end were not as strict as feared. What was problematic in instances that are many , however, was the availability of motorists.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the core things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the conclusions show that not many companies were well prepared for the corona crisis and actually mostly applied responsive practices. The most important supply chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
First, the need to design the supply chain for agility as well as versatility. This seems especially challenging for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capacity to accomplish that.
Second, it was discovered that much more attention was necessary on spreading risk and also aiming for risk reduction inside the supply chain. For the future, meaning more attention ought to be made available to the way businesses count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in cases where need can’t be met. Explicit prioritization is actually necessary to continue to meet market expectations but additionally to boost market shares in which competitors miss options. This challenge is not new, though it’s also been underexposed in this crisis and was usually not a component of preparatory pursuits.
Fourthly, the corona issues teaches us that the monetary impact of a crisis also depends on the way cooperation in the chain is set up. It is typically unclear precisely how additional costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain functions are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the classic discussions between logistics and production on the one hand and marketing on the other, the long term must tell.
How is the Dutch foods supply chain coping during the corona crisis?