Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. Economic indicators and health have been affected and all industries have been completely touched inside a way or even some other. One of the industries in which this was clearly obvious is the farming as well as food business.
In 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020. The hospitality business 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 big effects for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was apparent to most people that there was a great impact at the conclusion of this chain (e.g., hoarding doing food markets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), you will find many actors within the source chain for that will the impact is less clear. It’s thus vital that you find out how properly the food supply chain as a whole is armed to contend with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and also 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 examination on interviews with around thirty Dutch supply chain actors.
Demand in retail up, contained food service down It’s obvious and popular that need in the foodservice stations went down as a result of the closure of places, amongst others. In a few cases, sales for suppliers in the food service business therefore fell to aproximatelly twenty % of the initial volume. As an adverse reaction, demand in the retail stations went up and remained within a quality of about 10 20 % greater than before the problems started.
Products which had to come through abroad had their own issues. With the change in need from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic was necessary for use in consumer packaging. As more of this particular product packaging material concluded up in consumers’ homes instead of in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had an important impact on production activities. In certain cases, this even meant a full stop of production (e.g. within the duck farming industry, which arrived to a standstill due to demand fall-out in the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capacity which is restricted during the very first weeks of the crisis, and high costs for container transport as a consequence. Truck transport experienced different issues. At first, there were uncertainties regarding how transport would be managed for borders, which in the long run weren’t as rigid as feared. What was problematic in cases which are a large number of, nevertheless, was the availability of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of the main components of supply chain resilience:
Using this framework for the assessment of the interviews, the conclusions show that few businesses were nicely prepared for the corona problems and in fact mostly applied responsive practices. Probably the most important source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
First, the need to design the supply chain for flexibility and agility. This looks especially complicated for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the potential to accomplish that.
Second, it was observed that more attention was needed on spreading danger and aiming for risk reduction in the supply chain. For the future, meaning more attention should be provided to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing techniques in cases where demand cannot be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to improve market shares wherein competitors miss options. This task isn’t new, although it’s in addition been underexposed in this crisis and was frequently not part of preparatory activities.
Fourthly, the corona issues teaches us that the economic impact of a crisis in addition depends on the way cooperation in the chain is actually set up. It’s typically unclear how extra expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other functional departments, the businesses and supply chain operates are in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and generation on the one hand as well as advertising on the other hand, the long term will need to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?