Supply chain – The COVID 19 pandemic has undoubtedly had its impact effect on the planet. Economic indicators and health have been affected and all industries are touched within one of the ways or perhaps another. One of the industries in which it was clearly obvious will be the farming as well as food business.
In 2019, the Dutch farming and food sector 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 inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was clear to majority of folks that there was a huge effect at the tail end of this chain (e.g., hoarding around food markets, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the supply chain for which the effect is less clear. It’s therefore important to find out how properly the food supply chain as a whole is equipped to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It is evident and well known that demand in the foodservice channels went down due to the closure of places, amongst others. In certain cases, sales for suppliers of the food service industry as a result fell to about 20 % of the initial volume. Being a side effect, demand in the retail channels went up and remained within a quality of aproximatelly 10-20 % higher than before the problems started.
Products which had to come from abroad had the own problems of theirs. With the change in demand from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic was necessary for use in buyer packaging. As much more of this product packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a significant affect on production activities. In a few instances, this even meant the full stop in production (e.g. in the duck farming industry, which came to a standstill due to demand fall-out inside the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the issues, and high costs for container transport as a consequence. Truck transport experienced different issues. To begin with, there were uncertainties about how transport would be managed for borders, which in the long run weren’t as rigid as feared. The thing that was problematic in instances which are a large number of, nevertheless, was the availability of motorists.
The response to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this primary components of supply chain resilience:
Using this framework for the assessment of the interview, the findings show that not many companies had been nicely prepared for the corona crisis and in reality mostly applied responsive practices. The most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This appears especially complicated for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the potential to do so.
Second, it was observed that more interest was required on spreading threat as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention ought to be made available to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but in addition to boost market shares in which competitors miss options. This task is not new, however, it’s additionally been underexposed in this crisis and was often not a component of preparatory pursuits.
Fourthly, the corona crisis shows you us that the financial result of a crisis also depends on the way cooperation in the chain is actually set up. It is usually unclear how extra costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain operates 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 creation and logistics on the one hand and marketing and advertising on the other hand, the long term will have to tell.
How’s the Dutch meal supply chain coping throughout the corona crisis?