Supply chain - The COVID 19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been compromised and all industries have been touched within a way or even some other. One of the industries in which this was clearly obvious will be the farming and food industry.
In 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to 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 same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was apparent to most people that there was a huge impact at the tail end of the chain (e.g., hoarding in grocery stores, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors inside the source chain for that the effect is less clear. It is thus important to figure out how effectively the food supply chain as a whole is armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food supply chain. They based their analysis on interviews with around thirty Dutch source chain actors.
Demand within retail up, contained food service down It is evident and well known that need in the foodservice channels went down due to the closure of joints, amongst others. In a few instances, sales for suppliers in the food service business thus fell to about 20 % of the original volume. Being a complication, demand in the list channels went up and remained at a quality of about 10-20 % higher than before the problems began.
Products which had to come via abroad had their own issues. With the change in desire from foodservice to retail, the demand for packaging improved dramatically, More tin, cup and plastic was required for use in consumer packaging. As much more of this particular packaging material concluded up in consumers' houses as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a major impact on production activities. In certain cases, this even meant the full stop of output (e.g. within the duck farming business, which came to a standstill as a result of demand fall out inside the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain - Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport electrical capacity that is limited during the very first weeks of the problems, and costs which are high for container transport as a result. Truck transport faced various issues. At first, there were uncertainties regarding how transport will be managed at borders, which in the end were not as strict as feared. The thing that was problematic in situations that are most , however, was the availability of drivers.
The reaction to COVID-19 - deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the primary elements of supply chain resilience:
Using this framework for the assessment of the interview, the results show that not many organizations had been well prepared for the corona problems and in fact mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to design the supply chain for flexibility as well as agility. This looks especially complicated for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capability to accomplish that.
Next, it was found that much more attention was needed on spreading risk and also aiming for risk reduction within the supply chain. For the future, this means more attention has to be given to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and smart rationing techniques in situations in which need can't be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to increase market shares in which competitors miss opportunities. This task is not new, although it's in addition been underexposed in this specific problems and was often not a part of preparatory pursuits.
Fourthly, the corona issues shows you us that the financial impact of a crisis additionally is determined by the way cooperation in the chain is actually set up. It's usually unclear exactly how additional expenses (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain capabilities are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the traditional discussions between creation and logistics on the one hand and marketing and advertising on the other hand, the potential future will have to tell.
How is the Dutch foods supply chain coping during the corona crisis?