Supply chain – The COVID 19 pandemic has certainly had its impact impact on the planet. Economic indicators and health have been affected and all industries are touched within one way or some other. Among the industries in which this was clearly noticeable is the farming as well as food industry.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was apparent to majority of individuals that there was a huge impact at the end of the chain (e.g., hoarding in supermarkets, eateries closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors inside the source chain for which the effect is much less clear. It is thus vital that you find out how effectively the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Need within retail up, found food service down It is apparent and widely known that need in the foodservice stations went down due to the closure of joints, amongst others. In certain cases, sales for vendors of the food service business therefore fell to aproximatelly 20 % of the initial volume. As a complication, demand in the list channels went up and remained within a degree of about 10-20 % higher than before the problems started.
Goods that had to come through abroad had the own issues of theirs. With the shift in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic material was required for use in consumer packaging. As much more of this particular product packaging material ended up in consumers’ homes as opposed to in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in demand have had an important impact on production activities. In some instances, this even meant the full stop of production (e.g. inside the duck farming business, which came to a standstill on account of demand fall out inside the foodservice sector). In other cases, a major section 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 start of the Corona crisis in China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in restricted transport capacity during the very first weeks of the crisis, and expenses which are high for container transport as a result. Truck travel experienced different issues. To begin with, there were uncertainties on how transport will be managed for borders, which in the end were not as rigid as feared. What was problematic in a large number of situations, nonetheless, was the accessibility of motorists.
The reaction to COVID 19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the primary things of supply chain resilience:
To us this particular framework for the analysis of the interview, the findings indicate that not many businesses were well prepared for the corona problems and actually mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for versatility as well as agility. This appears especially complicated for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capability to accomplish that.
Second, it was discovered that more attention was required on spreading threat and aiming for risk reduction within the supply chain. For the future, what this means is far more attention has to be given to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in cases where demand cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but additionally to boost market shares wherein competitors miss opportunities. This particular challenge isn’t new, although it has additionally been underexposed in this problems and was often not part 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 actually set up. It is usually unclear precisely how extra costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally replace the traditional considerations between generation and logistics on the one hand as well as marketing and advertising on the other hand, the future must tell.
How is the Dutch foods supply chain coping during the corona crisis?