Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched within a way or another. Among the industries in which this was clearly apparent will be the farming as well as food industry.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was apparent to a lot of individuals that there was a significant effect at the conclusion of the chain (e.g., hoarding in food markets, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the source chain for that the impact is much less clear. It’s thus vital that you figure out how well the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food resources chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Need in retail up, in food service down It’s evident and widely known that need in the foodservice channels went down as a result of the closure of joints, amongst others. In certain cases, sales for suppliers of the food service business as a result fell to about 20 % of the original volume. Being an adverse reaction, demand in the retail channels went up and remained at a level of about 10-20 % higher than before the crisis started.
Goods that had to come through abroad had the own issues of theirs. With the change in need from foodservice to retail, the requirement for packaging changed considerably, More tin, glass and plastic was necessary for wearing in customer packaging. As more of this particular product packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a major impact on production activities. In a few instances, this even meant a full stop of production (e.g. within the duck farming industry, which came to a standstill due to demand fall out inside the foodservice sector). In other situations, a significant part 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 of China caused the flow of sea bins to slow down pretty soon in 2020. This resulted in transport capability which is limited throughout the earliest weeks of the problems, and expenses which are high for container transport as a direct result. Truck transport experienced various issues. Initially, there were uncertainties on how transport would be managed for borders, which in the end were not as rigid as feared. What was problematic in instances that are many , nonetheless, was the accessibility of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this core things of supply chain resilience:
To us this framework for the analysis of the interview, the conclusions indicate that not many businesses were nicely prepared for the corona crisis and actually mainly applied responsive practices. The most notable source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capability to accomplish that.
Next, it was found that more attention was necessary on spreading threat as well as aiming for risk reduction in the supply chain. For the future, this means far more attention ought to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and clever rationing strategies in cases in which need cannot be met. Explicit prioritization is actually necessary to keep on to meet market expectations but additionally to boost market shares where competitors miss options. This challenge isn’t new, though it has also been underexposed in this crisis and was usually not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the economic effect of a crisis in addition is determined by the way cooperation in the chain is actually set up. It’s often unclear precisely how further costs (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the traditional discussions between logistics and production on the one hand and marketing on the other, the long term must explain to.
How is the Dutch meal supply chain coping during the corona crisis?