Supply chain – The COVID-19 pandemic has definitely had its impact influence on the world. Economic indicators and health have been compromised and all industries are touched in one way or perhaps some other. Among the industries in which it was clearly visible is the agriculture and food industry.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy and food security as many stakeholders are impacted. Though it was clear to most individuals that there was a big impact at the conclusion of this chain (e.g., hoarding in food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the source chain for which the impact is less clear. It’s therefore vital that you find out how well the food supply chain as a whole is actually armed to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with around thirty Dutch supply chain actors.
Need within retail up, found food service down It is evident and popular that demand in the foodservice stations went down as a result of the closure of places, amongst others. In some cases, sales for suppliers in the food service business therefore fell to about twenty % of the original volume. As an adverse reaction, demand in the retail stations went up and remained at a degree of aproximatelly 10-20 % greater than before the crisis began.
Goods that had to come from abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic was necessary for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a significant affect on output activities. In some cases, this even meant a complete stop of production (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall-out inside the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down fairly shortly in 2020. This resulted in limited transport capability during the first weeks of the crisis, and expenses that are high for container transport as a consequence. Truck travel experienced various problems. To begin with, there were uncertainties about how transport would be handled at borders, which in the end weren’t as strict as feared. The thing that was problematic in cases which are many, nevertheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this primary elements of supply chain resilience:
Using this framework for the analysis of the interview, the findings indicate that few businesses were well prepared for the corona problems and actually mainly applied responsive practices. Probably the most important source chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
To begin with, the need to create the supply chain for versatility as well as agility. This appears especially complicated for smaller 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 do it.
Next, it was found that much more interest was needed on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means more attention should be provided to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in situations in which demand can’t be met. Explicit prioritization is required to continue to meet market expectations but also to increase market shares where competitors miss opportunities. This particular task isn’t new, though it’s additionally been underexposed in this specific crisis and was usually not a part of preparatory activities.
Fourthly, the corona problems shows us that the financial effect of a crisis also relies on the way cooperation in the chain is set up. It is often unclear precisely how extra costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain works are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the classic discussions between production and logistics on the one hand as well as advertising and marketing on the other, the long term will have to tell.
How is the Dutch food supply chain coping throughout the corona crisis?