Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the planet. Economic indicators and health have been affected and all industries are touched in one of the ways or perhaps some other. One of the industries in which this was clearly visible would be the agriculture as well as food industry.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly 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 lots of stakeholders are affected. Despite the fact that it was apparent to a lot of folks that there was a big effect at the conclusion of the chain (e.g., hoarding in food markets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors within the supply chain for that will the impact is less clear. It is therefore vital that you find out how properly the food supply chain as being a whole is actually armed to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, that is found food service down It’s apparent and well known that need in the foodservice stations went down as a result of the closure of joints, amongst others. In certain cases, sales for suppliers in the food service business therefore fell to aproximatelly twenty % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained within a degree of aproximatelly 10 20 % higher than before the problems started.
Products that had to come via abroad had the own issues of theirs. With the shift in need coming from foodservice to retail, the need for packaging improved considerably, More tin, glass and plastic was required for wearing in consumer packaging. As much more of this particular packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a big effect on production activities. In some instances, this even meant the full stop in production (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. in the meat processing industry), resulting in 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 soon in 2020. This resulted in transport capability that is limited throughout the very first weeks of the issues, and costs that are high for container transport as a consequence. Truck transport experienced different issues. At first, there were uncertainties on how transport will be managed at 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 availability of motorists.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key elements of supply chain resilience:
To us this framework for the assessment of the interviews, the results show that not many companies were well prepared for the corona crisis and in reality mainly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for versatility and agility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capacity to do it.
Next, it was found that more interest was required on spreading danger as well as aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in cases in which need cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but additionally to boost market shares in which competitors miss options. This particular task is not new, although it has also been underexposed in this crisis and was often not a component of preparatory pursuits.
Fourthly, the corona issues teaches us that the monetary effect of a crisis additionally relies on the way cooperation in the chain is actually set up. It’s often unclear exactly how extra costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional discussions between logistics and production on the one hand as well as marketing and advertising on the other, the future will need to explain to.
How is the Dutch food supply chain coping during the corona crisis?