Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been affected and all industries have been completely touched within one way or perhaps yet another. Among the industries in which this was clearly noticeable will be the agriculture as well as food industry.
In 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was clear to many people that there was a huge impact at the end of this chain (e.g., hoarding in food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the supply chain for that will the impact is less clear. It is thus imperative that you find out how properly the food supply chain as being a whole is prepared to deal with disruptions. Researchers from the Operations Research and 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 all over the food resources chain. They based their analysis on interviews with around 30 Dutch supply chain actors.
Demand in retail up, in food service down It’s evident and well known that need in the foodservice stations went down as a result of the closure of joints, amongst others. In certain instances, sales for vendors of the food service business thus fell to aproximatelly twenty % of the original volume. Being a side effect, demand in the list channels went up and remained within a degree of about 10 20 % higher than before the problems started.
Products which had to come via abroad had their very own problems. With the shift in need coming from foodservice to retail, the requirement for packaging improved considerably, More tin, glass or plastic was required for wearing in customer packaging. As much more of this particular packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had an important effect on production activities. In some cases, this even meant a full stop in output (e.g. within the duck farming industry, which came to a standstill as a result of demand fall out on the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. to 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 sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport electrical capacity which is limited during the earliest weeks of the crisis, and expenses that are high for container transport as a direct result. Truck travel encountered various issues. At first, there were uncertainties on how transport would be managed for borders, which in the long run weren’t as rigid as feared. The thing that was problematic in situations that are most , nonetheless, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core things of supply chain resilience:
To us this particular framework for the assessment of the interview, the conclusions show that not many companies were nicely prepared for the corona problems and in fact mostly applied responsive practices. The most notable supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for flexibility as well as agility. This looks particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capacity to accomplish that.
Next, it was observed that more attention was needed on spreading risk and aiming for risk reduction in the supply chain. For the future, this means far more attention should be made available to the way organizations count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in situations in which need can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to boost market shares in which competitors miss options. This particular challenge is not new, but it has also been underexposed in this specific problems and was usually not part of preparatory pursuits.
Fourthly, the corona problems shows us that the financial result of a crisis also depends on the way cooperation in the chain is actually set up. It’s usually unclear precisely how further costs (and benefits) are sent out in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain works are in the driving accommodate during a crisis. Product development and advertising activities have to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally change the classic considerations between creation and logistics on the one hand and advertising on the other hand, the long term will have to tell.
How is the Dutch foods supply chain coping during the corona crisis?