Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the world. Economic indicators and health have been compromised and all industries have been touched in one of the ways or perhaps another. Among the industries in which this was clearly apparent is the farming and food business.
In 2019, the Dutch agriculture and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to a lot of individuals that there was a big impact at the end of the chain (e.g., hoarding around supermarkets, eateries closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the supply chain for which the impact is much less clear. It’s thus vital that you determine how well the food supply chain as being a whole is armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with about thirty Dutch supply chain actors.
Demand in retail up, contained food service down It is evident and well known that need in the foodservice channels went down on account of the closure of restaurants, amongst others. In a few instances, sales for suppliers in the food service industry thus fell to aproximatelly 20 % of the first volume. Being an adverse reaction, demand in the list stations went up and remained within a degree of aproximatelly 10-20 % greater than before the problems began.
Goods that had to come through abroad had their own problems. With the change in demand from foodservice to retail, the demand for packaging changed considerably, More tin, glass and plastic was required for wearing in buyer packaging. As much more of this product packaging material ended up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a big impact on production activities. In a few cases, this even meant a full stop of production (e.g. inside the duck farming business, which came to a standstill due to demand fall out inside the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in limited transport electrical capacity throughout the earliest weeks of the issues, and costs that are high for container transport as a result. Truck transportation encountered different problems. At first, there were uncertainties about how transport will be managed for borders, which in the end were not as stringent as feared. The thing that was problematic in instances which are most, nonetheless, was the accessibility of motorists.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of the key elements of supply chain resilience:
Using this framework for the evaluation of the interview, the conclusions show that few companies had been nicely prepared for the corona problems and actually mostly applied responsive practices. The most important source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This seems especially challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the potential to accomplish that.
Second, it was found that more attention was needed on spreading threat and aiming for risk reduction inside the supply chain. For the future, what this means is more attention should be given to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing techniques in situations in which need cannot be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to increase market shares in which competitors miss options. This particular challenge isn’t new, though it’s also been underexposed in this crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the monetary impact of a crisis additionally depends on the way cooperation in the chain is actually set up. It’s usually unclear precisely how additional expenses (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other functional departments, the operations and supply chain operates are in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally switch the traditional considerations between logistics and generation on the one hand as well as marketing on the other hand, the potential future will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?