Supply chain – The COVID 19 pandemic has definitely had its impact effect on the world. health and Economic indicators have been affected and all industries have been touched in one way or even some other. One of the industries in which it was clearly visible will be the farming as well as food business.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to numerous men and women that there was a significant effect at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the supply chain for which the effect is much less clear. It’s therefore important to find 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 as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with about thirty Dutch source chain actors.
Need within retail up, found food service down It’s apparent and well known that demand in the foodservice stations went down as a result of the closure of places, amongst others. In some cases, sales for vendors of the food service industry as a result fell to about twenty % of the initial volume. As a complication, demand in the retail stations went up and remained within a level of about 10-20 % higher than before the problems began.
Goods that had to come via abroad had their very own issues. With the change in need from foodservice to retail, the demand for packaging improved dramatically, More tin, cup and plastic material was needed for use in customer packaging. As more of this product packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had an important effect on output activities. In some instances, this even meant a complete stop of output (e.g. in the duck farming industry, which came to a standstill due to demand fall-out inside the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down pretty soon in 2020. This resulted in limited transport capability throughout the earliest weeks of the problems, and high costs for container transport as a direct result. Truck travel faced various problems. To begin with, there were uncertainties on how transport will be managed for borders, which in the end were not as rigid as feared. That which was problematic in a large number of instances, nonetheless, was the accessibility of drivers.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the primary things of supply chain resilience:
To us this framework for the analysis of the interviews, the results indicate that few companies were well prepared for the corona crisis and actually mostly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility and versatility. This seems particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capacity to accomplish that.
Second, it was observed that much more interest was required on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be given to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing strategies in cases in which need can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to boost market shares wherein competitors miss opportunities. This particular challenge is not new, although it’s in addition been underexposed in this crisis and was often not a part of preparatory activities.
Fourthly, the corona problems teaches us that the economic result of a crisis additionally relies on the way cooperation in the chain is set up. It is often unclear how extra costs (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally change the basic considerations between generation and logistics on the one hand as well as advertising on the other hand, the long term will have to tell.
How is the Dutch foods supply chain coping during the corona crisis?