Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. Economic indicators and health have been affected and all industries have been completely touched within a way or even another. One of the industries in which it was clearly apparent will be the farming as well as food industry.
In 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are affected. Despite the fact that it was clear to many folks that there was a significant effect at the tail end of this chain (e.g., hoarding doing grocery stores, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the source chain for which the effect is much less clear. It’s therefore imperative that you determine how well the food supply chain as being a whole is actually armed to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food supplies chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Demand within retail up, contained food service down It’s evident and widely known that need in the foodservice channels went down on account of the closure of joints, amongst others. In a few cases, sales for vendors in the food service industry therefore fell to about twenty % of the first volume. As a complication, demand in the list stations went up and remained at a level of about 10 20 % greater than before the problems began.
Products which had to come via abroad had the own issues of theirs. With the change in desire from foodservice to retail, the demand for packaging changed dramatically, More tin, glass and plastic was needed for wearing in customer packaging. As more of this packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a big effect on output activities. In a few instances, this even meant a complete stop in production (e.g. within the duck farming industry, which came to a standstill on account of demand fall out on the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in limited transport capacity during the very first weeks of the crisis, and costs that are high for container transport as a result. Truck travel encountered various issues. At first, there were uncertainties on how transport will be handled for borders, which in the end were not as rigid as feared. The thing that was problematic in cases which are many, nonetheless, was the availability of drivers.
The reaction to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this core things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the results indicate that few businesses were nicely prepared for the corona problems and in fact mainly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
For starters, the need to develop the supply chain for agility and versatility. This appears especially challenging for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often do not have the capacity to accomplish that.
Second, it was discovered that more attention was necessary on spreading risk and aiming for risk reduction inside the supply chain. For the future, this means more attention should be provided to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and smart rationing techniques in cases where need cannot be met. Explicit prioritization is needed to keep on to satisfy market expectations but additionally to improve market shares wherein competitors miss options. This challenge is not new, although it has additionally been underexposed in this crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona problems teaches us that the financial result of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is often unclear how further costs (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain functions are actually in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the classic considerations between generation and logistics on the one hand as well as marketing on the other, the long term will need to tell.
How’s the Dutch food supply chain coping throughout the corona crisis?