Supply chain – The COVID-19 pandemic has definitely had the impact of its influence on the world. Economic indicators and health have been affected and all industries have been completely touched inside one way or yet another. Among the industries in which it was clearly noticeable would be the farming as well as food business.
In 2019, the Dutch farming and food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its 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 major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Even though it was apparent to most people that there was a great impact at the conclusion of the chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for that the effect is much less clear. It is therefore important to determine how properly the food supply chain as a whole is prepared to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand within retail up, found food service down It is obvious and well known that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In a few cases, sales for vendors of the food service business therefore fell to aproximatelly 20 % of the initial volume. Being a side effect, demand in the list channels went up and remained within a level of about 10 20 % greater than before the problems started.
Products which had to come from abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the demand for packaging changed dramatically, More tin, glass and plastic material was needed for use in buyer packaging. As more of this packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had an important effect on production activities. In some cases, this even meant a full stop of output (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 situations, a significant portion 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 containers to slow down pretty shortly in 2020. This resulted in transport capacity which is restricted throughout the very first weeks of the problems, and costs that are high for container transport as a result. Truck travel experienced various problems. To begin with, there were uncertainties about how transport will be managed for borders, which in the long run were not as rigid as feared. What was problematic in situations that 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 as well as Leeuw, was based on the overview of the main components of supply chain resilience:
To us this framework for the assessment of the interview, the results indicate that few organizations were well prepared for the corona problems and in fact mostly applied responsive methods. The most notable supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as flexibility. This appears particularly complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capacity to accomplish that.
Next, it was found that more interest was required on spreading threat and also aiming for risk reduction within the supply chain. For the future, what this means is far more attention has to be provided to the way companies depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in situations where need cannot be met. Explicit prioritization is required to continue to meet market expectations but additionally to boost market shares wherein competitors miss options. This challenge isn’t new, but it has in addition been underexposed in this specific crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial impact of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It’s often unclear exactly how extra costs (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain operates are actually in the driving accommodate during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally change the basic discussions between logistics and generation on the one hand and marketing and advertising on the other, the potential future will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?