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 within one of the ways or even yet another. Among the industries in which this was clearly visible would be the agriculture as well as food business.
Throughout 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was apparent to majority of folks that there was a big effect at the end of this chain (e.g., hoarding around grocery stores, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for that the impact is less clear. It’s thus imperative that you find out how well the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supply chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Demand in retail up, contained food service down It’s apparent and popular that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In some cases, sales for suppliers in the food service industry therefore fell to about twenty % of the first volume. As a side effect, demand in the retail stations went up and remained at a level of aproximatelly 10 20 % higher than before the problems started.
Products which had to come through abroad had the own issues of theirs. With the change in desire coming from foodservice to retail, the demand for packaging improved dramatically, More tin, cup or plastic was required for wearing in consumer packaging. As more of this particular product packaging material concluded up in consumers’ homes rather than in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a significant affect on output activities. In a few instances, this even meant a complete stop in production (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capacity that is restricted during the first weeks of the problems, and costs which are high for container transport as a result. Truck travel experienced various issues. At first, there were uncertainties about how transport would be managed for borders, which in the end weren’t as stringent as feared. The thing that was problematic in cases which are most, however, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of this key things of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions indicate that not many organizations were nicely prepared for the corona problems and in fact mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for versatility as well as agility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention 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 as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be made available to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in situations in which need cannot be met. Explicit prioritization is required to continue to satisfy market expectations but also to improve market shares where competitors miss opportunities. This task isn’t new, though it has in addition been underexposed in this crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial result of a crisis in addition is determined by the way cooperation in the chain is set up. It is usually unclear exactly how further expenses (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally replace the traditional discussions between logistics and production on the one hand as well as marketing on the other hand, the long term will need to explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?