Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the world. Economic indicators and health have been affected and all industries are touched within one of the ways or even some other. Among the industries in which this was clearly obvious will be the agriculture as well as food industry.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical 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 impacted. Even though it was apparent to many individuals that there was a huge impact at the tail end of the chain (e.g., hoarding around grocery stores, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for which the effect is much less clear. It’s thus important to determine how properly the food supply chain as being a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around 30 Dutch supply chain actors.
Demand within retail up, contained food service down It is obvious and well known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In some cases, sales for suppliers in the food service industry therefore fell to about twenty % of the initial volume. Being a complication, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % higher than before the problems started.
Products that had to come from abroad had their own issues. With the shift in need coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic material was necessary for use in customer packaging. As much more of this packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a significant effect on output activities. In some cases, this even meant a complete stop of output (e.g. within the duck farming industry, which emerged to a standstill due to demand fall-out on the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capacity that is restricted during the earliest weeks of the issues, and high expenses for container transport as a direct result. Truck transportation experienced various problems. At first, there were uncertainties on how transport will be managed for borders, which in the long run were not as stringent as feared. That which was problematic in many situations, however, was the availability of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this key elements of supply chain resilience:
Using this framework for the assessment of the interviews, the findings show that not many companies were nicely prepared for the corona problems and in reality mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to develop the supply chain for versatility as well as agility. This looks particularly challenging for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the potential to do it.
Next, it was observed that more attention was needed on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, this means far more attention has to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing techniques in cases in which demand can’t be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but also to improve market shares wherein competitors miss opportunities. This particular task isn’t new, but it has in addition been underexposed in this specific problems and was usually not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the financial impact of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It is usually unclear how extra 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 works are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally change the classic discussions between generation and logistics on the one hand as well as marketing and advertising on the other, the long term will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?