Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the planet. Economic indicators and health have been compromised and all industries have been completely touched in one of the ways or perhaps another. One of the industries in which it was clearly obvious is the farming and food industry.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry 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 same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to a lot of people that there was a big effect at the end of the chain (e.g., hoarding in grocery stores, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for which the impact is much less clear. It is thus imperative that you determine how properly the food supply chain as being a whole is armed to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Need within retail up, that is found food service down It is evident and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In some cases, sales for suppliers of the food service business therefore fell to about twenty % of the original volume. Being a side effect, demand in the retail channels went up and remained at a quality of about 10-20 % higher than before the crisis began.
Products which had to come via abroad had the own issues of theirs. With the shift in desire from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic material was required for wearing in buyer packaging. As much more of this packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant affect on output activities. In some cases, this even meant the full stop of production (e.g. within the duck farming industry, which arrived to a standstill due to demand fall-out in the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport electrical capacity which is limited throughout the very first weeks of the crisis, and expenses that are high for container transport as a result. Truck transportation faced various issues. Initially, there were uncertainties on how transport would be managed at borders, which in the long run were not as stringent as feared. What was problematic in instances that are a large number of , nevertheless, was the availability of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the key things of supply chain resilience:
To us this framework for the analysis of the interviews, the conclusions show that few businesses were nicely prepared for the corona problems and in reality mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
For starters, the need to design the supply chain for flexibility as well as agility. This seems especially complicated for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capacity to accomplish that.
Second, it was discovered that more interest was necessary on spreading risk and also aiming for risk reduction inside the supply chain. For the future, this means far more attention ought to be made available to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing strategies in situations where need cannot be met. Explicit prioritization is needed to continue to satisfy market expectations but in addition to increase market shares in which competitors miss options. This particular task is not new, however, it’s also been underexposed in this specific problems and was often not a component of preparatory activities.
Fourthly, the corona crisis shows us that the monetary result of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It’s often unclear exactly how additional costs (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain operates are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain events. Whether the corona pandemic will structurally replace the traditional discussions between logistics and generation on the one hand as well as marketing and advertising on the other hand, the long term will have to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?