Supply chain - The COVID 19 pandemic has definitely had its impact effect on the world. Economic indicators and health have been affected and all industries have been completely touched within one way or some other. Among the industries in which this was clearly noticeable will be the farming and food business.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality business 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 in the food chain have significant consequences for the Dutch economy and food security as lots of stakeholders are affected. Though it was clear to many people that there was a huge impact at the tail end of this chain (e.g., hoarding around food markets, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the source chain for which the effect is less clear. It's therefore imperative that you find out how effectively the food supply chain as being a whole is equipped to deal with disruptions. Researchers from the Operations Research and 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 throughout the food supply chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It's apparent and popular that demand in the foodservice stations went down as a result of the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry thus fell to about twenty % of the first volume. Being a complication, demand in the retail channels went up and remained at a level of aproximatelly 10-20 % higher than before the problems began.
Goods that had to come via abroad had their own problems. With the shift in need coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic material was needed for use in customer packaging. As more of this particular product packaging material concluded up in consumers' homes as opposed to in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in demand have had an important affect on production activities. In certain cases, this even meant a full stop in output (e.g. inside the duck farming business, which emerged to a standstill on account of demand fall out inside the foodservice sector). In other cases, a big part of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain - Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capability that is restricted during the very first weeks of the crisis, and high expenses for container transport as a result. Truck transportation encountered various problems. To begin with, there were uncertainties on how transport would be managed for borders, which in the long run weren't as stringent as feared. That which was problematic in a large number of cases, however, was the availability of drivers.
The reaction to COVID 19 - deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this core components of supply chain resilience:
To us this particular framework for the evaluation of the interview, the conclusions indicate that not many businesses were well prepared for the corona crisis and actually mainly applied responsive methods. The most important supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
For starters, the need to design the supply chain for agility and versatility. This looks especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often do not have the capability to accomplish that.
Second, it was found that much more interest was needed on spreading danger as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention has to be given to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as clever rationing strategies in cases in which need can't be met. Explicit prioritization is actually required to continue to satisfy market expectations but additionally to increase market shares in which competitors miss options. This particular challenge is not new, however, it's additionally been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona crisis teaches us that the economic result of a crisis in addition depends on the way cooperation in the chain is actually set up. It's usually unclear precisely how extra expenses (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional discussions between logistics and generation on the one hand and marketing on the other hand, the long term will have to tell.
How's the Dutch foods supply chain coping during the corona crisis?