Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the planet. Economic indicators and health have been compromised and all industries have been completely touched inside a way or some other. Among the industries in which this was clearly apparent would be the farming as well as food business.
Throughout 2019, the Dutch agriculture and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to a lot of people that there was a big effect at the conclusion of the chain (e.g., hoarding around food markets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors in the source chain for that the effect is less clear. It’s therefore important to find out how properly the food supply chain as being a whole is equipped to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food supply chain. They based their examination on interviews with around 30 Dutch source chain actors.
Demand within retail up, that is found food service down It’s obvious and well known that need in the foodservice stations went down on account of the closure of joints, amongst others. In some instances, sales for vendors of the food service industry as a result fell to about 20 % of the first volume. As a complication, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % greater than before the crisis began.
Products that had to come from abroad had their very own problems. With the shift in need from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was necessary for use in customer packaging. As more of this product packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a major impact on output activities. In certain cases, this even meant the full stop in production (e.g. inside the duck farming business, which arrived to a standstill due to demand fall out inside the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down fairly shortly in 2020. This resulted in restricted transport electrical capacity during the earliest weeks of the issues, and costs that are high for container transport as a result. Truck travel experienced different problems. Initially, there were uncertainties regarding how transport will be handled at borders, which in the long run weren’t as rigid as feared. The thing that was problematic in situations which are most, nevertheless, was the availability of motorists.
The reaction to COVID 19 – deliver 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:
To us this framework for the analysis of the interviews, the conclusions indicate that few organizations had been well prepared for the corona crisis and actually mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to develop the supply chain for flexibility and agility. This seems particularly complicated for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to do so.
Next, it was observed that much more interest was necessary on spreading threat as well as aiming for risk reduction within the supply chain. For the future, this means more attention ought to be given to the way organizations count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as clever rationing techniques in cases where need can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but also to increase market shares in which competitors miss options. This challenge is not new, however, it has additionally been underexposed in this problems and was often not a component of preparatory activities.
Fourthly, the corona issues shows us that the economic impact of a crisis also depends on the way cooperation in the chain is actually set up. It is usually unclear how extra expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functions are in the driving accommodate during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the classic considerations between logistics and production on the one hand and marketing on the other hand, the future will need to tell.
How’s the Dutch food supply chain coping during the corona crisis?