Supply chain - The COVID 19 pandemic has certainly had its impact impact on the world. health and Economic indicators have been compromised and all industries are touched within one of the ways or another. One of the industries in which this was clearly visible would be the farming as well as food business.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was apparent to most people that there was a big effect at the tail end of the chain (e.g., hoarding in grocery stores, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the supply chain for which the impact is less clear. It's therefore important to find out how effectively the food supply chain as being a whole is equipped 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 influences of the COVID 19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Need in retail up, found food service down It is apparent and widely known that need in the foodservice channels went down due to the closure of places, amongst others. In certain instances, sales for suppliers of the food service business therefore fell to aproximatelly twenty % of the first volume. As a side effect, demand in the list channels went up and remained at a level of about 10 20 % greater than before the crisis began.
Goods that had to come through abroad had their own issues. With the change in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, cup and plastic was required for wearing in customer packaging. As more of this packaging material ended up in consumers' houses instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a big effect on production activities. In certain instances, this even meant a total stop of production (e.g. within the duck farming industry, which came to a standstill on account of demand fall-out in the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of facilities.
Supply chain - Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capacity that is restricted throughout the earliest weeks of the crisis, and costs which are high for container transport as a direct result. Truck transport faced various problems. At first, there were uncertainties regarding how transport would be handled at borders, which in the long run weren't as strict as feared. That which was problematic in situations which are most, nonetheless, was the availability of drivers.
The response to COVID-19 - supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this key components of supply chain resilience:
Using this framework for the evaluation of the interview, the findings indicate that not many businesses were well prepared for the corona crisis and in fact mainly applied responsive practices. The most notable source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for flexibility and agility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to do it.
Second, it was observed that more interest was needed on spreading threat as well as aiming for risk reduction within the supply chain. For the future, what this means is far more attention should be made available to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing strategies in cases in which need can't be met. Explicit prioritization is required to continue to satisfy market expectations but also to improve market shares wherein competitors miss options. This particular challenge is not new, although it's in addition been underexposed in this specific problems and was often not part of preparatory pursuits.
Fourthly, the corona crisis shows us that the economic result of a crisis in addition relies on the way cooperation in the chain is actually set up. It is usually unclear how additional costs (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain works are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the basic considerations between logistics and creation on the one hand and advertising on the other hand, the potential future will have to explain to.
How is the Dutch meal supply chain coping during the corona crisis?