Supply chain – The COVID 19 pandemic has certainly had its impact effect on the world. Economic indicators and health have been compromised and all industries have been touched in a way or perhaps another. Among the industries in which it was clearly visible will be the agriculture as well as food industry.
Throughout 2019, the Dutch farming as well as food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was clear to many people that there was a great effect at the end of the chain (e.g., hoarding in grocery stores, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for that will the effect is less clear. It’s thus important to figure out how well the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, found food service down It is obvious and widely known that demand in the foodservice channels went down due to the closure of joints, amongst others. In some instances, sales for vendors of the food service business thus fell to aproximatelly twenty % of the initial volume. Being a side effect, demand in the list channels went up and remained within a quality of aproximatelly 10-20 % higher than before the crisis began.
Products that had to come through abroad had the own issues of theirs. With the shift in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic was necessary for use in buyer packaging. As much more of this particular packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a big impact on production activities. In a few instances, this even meant the full stop in output (e.g. within the duck farming business, which arrived to a standstill as a result of demand fall-out on the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea bins to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted during the first weeks of the crisis, and expenses which are high for container transport as a result. Truck transport experienced various problems. Initially, there were uncertainties regarding how transport will be managed for borders, which in the long run weren’t as rigid as feared. What was problematic in instances which are many, however, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of this key elements of supply chain resilience:
To us this framework for the assessment of the interviews, the results show that not many organizations were well prepared for the corona problems and in reality mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to create the supply chain for versatility and agility. This appears particularly challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capability to do so.
Next, it was discovered that more attention was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be given to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in situations in which demand cannot be met. Explicit prioritization is needed to continue to meet market expectations but additionally to boost market shares in which competitors miss options. This challenge is not new, though it has also been underexposed in this specific crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the monetary impact of a crisis also is determined by the manner in which cooperation in the chain is set up. It is typically unclear precisely how additional expenses (and benefits) are distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain operates are in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally switch the basic discussions between generation and logistics on the one hand and advertising on the other hand, the potential future will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?