Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the world. Economic indicators and health have been affected and all industries are touched within one of the ways or yet another. Among the industries in which it was clearly visible will be the agriculture as well as food industry.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are affected. Despite the fact that it was apparent to most individuals that there was a huge effect at the conclusion of this chain (e.g., hoarding around grocery stores, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the source chain for which the impact is less clear. It’s therefore imperative that you find out how effectively the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about thirty Dutch supply chain actors.
Demand in retail up, contained food service down It’s obvious and widely known that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some instances, sales for suppliers in the food service business thus fell to about twenty % of the initial volume. Being a side effect, demand in the retail channels went up and remained within a level of aproximatelly 10 20 % higher than before the crisis started.
Products which had to come through abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic was necessary for use in consumer packaging. As much more of this product packaging material ended up in consumers’ homes rather than in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had an important affect on output activities. In some instances, this even meant a total stop in production (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall-out inside the foodservice sector). In other situations, a big section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in transport electrical capacity which is limited throughout the earliest weeks of the issues, and high expenses for container transport as a consequence. Truck transportation encountered various problems. At first, there were uncertainties on how transport will be handled at borders, which in the end weren’t as strict as feared. What was problematic in situations which are a large number of, however, was the availability of drivers.
The reaction to COVID 19 – provide 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:
Using this particular framework for the evaluation of the interviews, the findings indicate that few companies were nicely prepared for the corona crisis and in reality mainly applied responsive methods. The most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for versatility and agility. This appears particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capacity to accomplish that.
Second, it was observed that much more interest was needed on spreading danger and aiming for risk reduction within the supply chain. For the future, this means far more attention should be provided to the manner in which organizations count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases where need can’t be met. Explicit prioritization is actually required to continue to meet market expectations but additionally to improve market shares in which competitors miss opportunities. This particular challenge is not new, although it’s in addition been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona issues shows you us that the economic impact of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is typically unclear how further costs (and benefits) are distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain operates 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 events. Whether or not the corona pandemic will structurally change the classic considerations between logistics and creation on the one hand as well as advertising on the other, the future will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?