Supply chain - The COVID 19 pandemic has undoubtedly had the impact of its impact on the planet. Economic indicators and health have been affected and all industries have been completely touched within one way or some other. One of the industries in which this was clearly obvious will be the farming and food business.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Even though it was apparent to a lot of people that there was a huge impact at the end of the chain (e.g., hoarding doing grocery stores, restaurants closing) and at the start of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors within the source chain for that the effect is less clear. It is therefore vital that you figure out how effectively the food supply chain as being a whole is actually prepared to contend with disruptions. Researchers from the Operations Research as well as 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 throughout the food resources chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It's evident and widely known that demand in the foodservice channels went down as a result of the closure of places, amongst others. In some cases, sales for vendors of the food service industry as a result fell to aproximatelly twenty % of the first volume. Being a complication, demand in the retail channels went up and remained at a degree of aproximatelly 10 20 % higher than before the crisis started.
Products which had to come through abroad had their own problems. With the change in desire coming from foodservice to retail, the requirement for packaging improved considerably, More tin, glass or plastic was required for use in consumer packaging. As much more of this packaging material concluded up in consumers' homes instead of in restaurants, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had a significant impact on production activities. In some cases, this even meant a full stop in output (e.g. within the duck farming business, which arrived to a standstill due to demand fall-out in the foodservice sector). In other situations, a significant part of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of facilities.
Supply chain - Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea bins to slow down fairly soon in 2020. This resulted in limited transport capability during the earliest weeks of the problems, and expenses that are high for container transport as a result. Truck travel experienced different issues. To begin with, there were uncertainties on how transport would be managed for borders, which in the end weren't as stringent as feared. That which was problematic in many instances, nevertheless, was the accessibility of motorists.
The response to COVID-19 - provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this core elements of supply chain resilience:
Using this framework for the evaluation of the interviews, the conclusions show that few organizations were well prepared for the corona crisis and in fact mainly applied responsive practices. The most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to design the supply chain for agility and flexibility. This seems especially complicated for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often do not have the capability to accomplish that.
Next, it was observed that much more attention was needed on spreading risk and aiming for risk reduction within the supply chain. For the future, this means more attention has to be provided to the way organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing strategies in situations in which need cannot be met. Explicit prioritization is needed to continue to meet market expectations but also to increase market shares wherein competitors miss options. This challenge is not new, but it has also been underexposed in this specific crisis and was frequently not a part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the economic effect of a crisis additionally depends on the way cooperation in the chain is set up. It's often unclear precisely how extra costs (and benefits) are actually sent out in a chain, in case 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 need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the classic considerations between logistics and generation on the one hand and advertising on the other hand, the future will need to explain to.
How is the Dutch food supply chain coping during the corona crisis?