Supply chain – The COVID-19 pandemic has certainly had its impact influence on the planet. Economic indicators and health have been affected and all industries are touched inside a way or even yet another. Among the industries in which this was clearly noticeable is the farming and food business.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are affected. Despite the fact that it was apparent to numerous individuals that there was a big effect at the conclusion of this chain (e.g., hoarding doing grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors inside the supply chain for that will the impact is much less clear. It is therefore imperative that you find out how properly the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and also from 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 examination on interviews with about 30 Dutch source chain actors.
Need within retail up, that is found food service down It is obvious and widely known that demand in the foodservice stations went down as a result of the closure of restaurants, amongst others. In a few instances, sales for vendors in the food service industry as a result fell to aproximatelly twenty % of the first volume. As a side effect, demand in the list channels went up and remained within a level of aproximatelly 10 20 % greater than before the crisis began.
Goods that had to come from abroad had their very own issues. With the change in need from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic was needed for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ homes as opposed to in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a big impact on production activities. In a few instances, this even meant a complete stop in output (e.g. inside the duck farming industry, which came to a standstill due to demand fall out on the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability that is restricted throughout the very first weeks of the issues, and high costs for container transport as a consequence. Truck transport encountered different problems. Initially, there were uncertainties regarding how transport will be managed at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in many cases, nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this key components of supply chain resilience:
To us this framework for the assessment of the interviews, the results indicate that few organizations were nicely prepared for the corona crisis and in reality mainly applied responsive practices. The most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
For starters, the need to create the supply chain for versatility and agility. This looks especially complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capability to accomplish that.
Second, it was observed that more interest was required on spreading risk and aiming for risk reduction within the supply chain. For the future, this means more attention ought to be given to the way businesses count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in situations where demand cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but in addition to increase market shares where competitors miss opportunities. This particular task is not new, though it has additionally been underexposed in this specific problems and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the economic result of a crisis in addition is determined by the way cooperation in the chain is set up. It’s usually unclear exactly how extra costs (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain capabilities are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the traditional considerations between generation and logistics on the one hand and marketing on the other hand, the potential future will need to tell.
How’s the Dutch foods supply chain coping during the corona crisis?