Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the planet. health and Economic indicators have been affected and all industries have been touched within one way or some other. Among the industries in which this was clearly noticeable would be the farming and food industry.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as many stakeholders are affected. Despite the fact that it was clear to majority of men and women that there was a huge effect at the conclusion of the chain (e.g., hoarding around supermarkets, restaurants closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are many actors in the source chain for which the effect is much less clear. It is thus important to find out how properly the food supply chain as a whole is prepared to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with about 30 Dutch source chain actors.
Demand within retail up, contained food service down It is obvious and widely known that need in the foodservice stations went down as a result of the closure of places, amongst others. In a few cases, sales for vendors in the food service business as a result fell to about 20 % of the initial volume. As a complication, demand in the list channels went up and remained at a quality of aproximatelly 10-20 % greater than before the problems started.
Products which had to come via abroad had their own issues. With the change in need from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic material was needed for wearing in consumer packaging. As much more of this product packaging material concluded up in consumers’ homes instead of in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a significant affect on production activities. In certain instances, this even meant the full stop in production (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall-out in the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in restricted transport capacity throughout the very first weeks of the crisis, and high expenses for container transport as a consequence. Truck travel encountered various issues. To begin with, there were uncertainties regarding how transport would be handled for borders, which in the long run were not as stringent as feared. The thing that was problematic in instances which are most, nonetheless, was the accessibility of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of the main things of supply chain resilience:
Using this framework for the assessment of the interviews, the findings indicate that few businesses had been nicely prepared for the corona problems and in fact mainly applied responsive methods. The most important source chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
For starters, the need to create the supply chain for agility and versatility. This seems particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capability to do it.
Second, it was found that much more attention was necessary on spreading threat and aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be given to the way businesses count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in situations where need cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to boost market shares where competitors miss opportunities. This particular task isn’t new, however, it has also been underexposed in this specific problems and was frequently not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the economic impact of a crisis additionally depends on the manner in which cooperation in the chain is set up. It is usually unclear precisely how further expenses (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the traditional discussions between logistics and generation on the one hand as well as advertising and marketing on the other hand, the potential future will need to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?