Supply chain – The COVID 19 pandemic has certainly had the impact of its effect on the planet. health and Economic indicators have been compromised and all industries are touched inside one way or yet another. 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 sector contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as lots of stakeholders are affected. Though it was clear to numerous people that there was a significant effect at the conclusion of the 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), you will find many actors within the source chain for which the impact is much less clear. It is thus vital that you find out how effectively 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 University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch source chain actors.
Demand within retail up, contained food service down It is evident and well known that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In certain instances, sales for vendors in the food service business as a result fell to about 20 % of the first volume. As a complication, demand in the list stations went up and remained within a degree of aproximatelly 10-20 % greater than before the problems started.
Products which had to come from abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, cup or plastic was required for use in customer packaging. As much more of this particular product packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant effect on output activities. In certain cases, this even meant the full stop in output (e.g. within the duck farming industry, which came to a standstill due to demand fall out on the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in restricted transport capability throughout the earliest weeks of the problems, and high costs for container transport as a direct result. Truck transportation encountered various issues. Initially, there were uncertainties regarding how transport would be managed at borders, which in the long run weren’t as stringent as feared. The thing that was problematic in most instances, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this primary things of supply chain resilience:
Using this framework for the analysis of the interview, the results indicate that few businesses were well prepared for the corona problems and in reality mainly applied responsive methods. Probably the most notable supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This appears particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capability to do it.
Second, it was found that more interest was needed on spreading danger and also aiming for risk reduction in the supply chain. For the future, this means more attention should be given to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually necessary to continue to meet market expectations but also to improve market shares where competitors miss options. This challenge is not new, though it’s in addition been underexposed in this problems and was usually not a part of preparatory activities.
Fourthly, the corona issues shows us that the economic impact of a crisis also is determined by the way cooperation in the chain is set up. It’s usually unclear precisely how further costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally switch the traditional discussions between logistics and creation on the one hand as well as marketing and advertising on the other hand, the long term must explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?