Supply chain – The COVID-19 pandemic has undoubtedly had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been touched within a way or perhaps some other. One of the industries in which it was clearly obvious will be the farming and food industry.
In 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to a lot of individuals that there was a huge effect at the conclusion of the chain (e.g., hoarding doing grocery stores, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors in the source chain for that the effect is much less clear. It’s therefore vital that you find out how well the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University 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 analysis on interviews with about 30 Dutch supply chain actors.
Demand in retail up, in food service down It is apparent and popular that demand in the foodservice channels went down on account of the closure of places, amongst others. In a few cases, sales for suppliers of the food service business as a result fell to about 20 % of the original volume. Being an adverse reaction, demand in the retail channels went up and remained at a level of aproximatelly 10-20 % higher than before the crisis began.
Products that had to come through abroad had their own issues. With the shift in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, glass or plastic material was needed for wearing in consumer packaging. As much more of this packaging material ended up in consumers’ houses rather than in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a big affect on output activities. In a few cases, this even meant a full stop of production (e.g. inside the duck farming industry, which emerged to a standstill as a result of demand fall out on the foodservice sector). In other situations, a big portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is limited throughout the very first weeks of the issues, and high expenses for container transport as a consequence. Truck transportation experienced different issues. At first, there were uncertainties on how transport would be managed at borders, which in the end were not as rigid as feared. That which was problematic in instances which are most, however, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the main things of supply chain resilience:
Using this framework for the evaluation of the interview, the findings indicate that few businesses were well prepared for the corona crisis and in reality mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This looks particularly challenging for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capability to do so.
Next, it was observed that much more interest was needed on spreading risk and aiming for risk reduction in the supply chain. For the future, meaning far more attention should be provided 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 demand cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to boost market shares where competitors miss opportunities. This particular challenge is not new, but it’s also been underexposed in this problems and was often not a part of preparatory pursuits.
Fourthly, the corona issues shows you us that the monetary result of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is usually unclear how additional expenses (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally switch the traditional discussions between creation and logistics on the one hand as well as advertising on the other hand, the future must tell.
How is the Dutch foods supply chain coping throughout the corona crisis?