Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the world. Economic indicators and health have been compromised and all industries have been touched in one way or perhaps some other. Among the industries in which it was clearly obvious will be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was clear to a lot of folks that there was a big impact at the conclusion of this chain (e.g., hoarding doing food markets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the supply chain for that will the impact is much less clear. It’s therefore imperative that you figure out how well the food supply chain as a whole is actually prepared to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based their analysis on interviews with around 30 Dutch source chain actors.
Demand within retail up, found food service down It’s evident and widely known that demand in the foodservice channels went down due to the closure of places, amongst others. In certain instances, sales for suppliers of the food service industry therefore fell to aproximatelly twenty % of the first volume. As an adverse reaction, demand in the retail stations went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come through abroad had their very own problems. With the shift in desire from foodservice to retail, the need for packaging changed considerably, More tin, cup and plastic material was necessary for wearing in customer packaging. As more of this product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a big impact on production activities. In certain instances, this even meant a complete stop in production (e.g. in the duck farming industry, which emerged to a standstill on account of demand fall out in 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 in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in restricted transport capacity during the earliest weeks of the problems, and costs which are high for container transport as a consequence. Truck travel experienced different problems. To begin with, there were uncertainties on how transport will be managed at borders, which in the end weren’t as rigid as feared. What was problematic in a large number of instances, however, was the accessibility of drivers.
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 this core components of supply chain resilience:
To us this framework for the evaluation of the interviews, the results show that not many organizations were nicely prepared for the corona crisis and in fact mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
First, the need to create the supply chain for versatility as well as agility. This looks particularly complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to accomplish that.
Second, it was observed that much more attention was needed on spreading danger as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention should be given to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing strategies in cases in which demand can’t be met. Explicit prioritization is needed to continue to meet market expectations but also to boost market shares wherein competitors miss options. This particular challenge isn’t new, however, it has additionally been underexposed in this specific problems and was usually not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the monetary impact of a crisis also depends on the way cooperation in the chain is actually set up. It’s typically unclear exactly how further expenses (and benefits) are distributed in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain features are actually in the driving accommodate during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally switch the classic considerations between generation and logistics on the one hand and marketing on the other, the potential future will need to tell.
How is the Dutch food supply chain coping during the corona crisis?