Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been affected and all industries are touched inside one of the ways or perhaps another. Among the industries in which this was clearly apparent will be the farming and food business.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Despite the fact that it was apparent to numerous folks that there was a big impact at the tail end of the chain (e.g., hoarding in food markets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for that the effect is less clear. It’s thus important to determine how well the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, contained food service down It is evident and well known that need in the foodservice channels went down due to the closure of joints, amongst others. In a few instances, sales for suppliers of the food service business as a result fell to about 20 % of the first volume. Being an adverse reaction, demand in the list stations went up and remained at a level of aproximatelly 10-20 % greater than before the crisis started.
Products which had to come via abroad had the own issues of theirs. With the shift in desire coming from foodservice to retail, the requirement for packaging changed considerably, 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 instead of in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a significant impact on production activities. In a few instances, this even meant the full stop of production (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall out inside the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capability which is limited throughout the first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transport experienced various problems. Initially, there were uncertainties about how transport would be handled for borders, which in the long run weren’t as rigid as feared. That which was problematic in cases which are most, however, was the availability of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this main elements of supply chain resilience:
To us this framework for the assessment of the interview, the findings indicate that few companies had been well prepared for the corona problems and in fact mostly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to create the supply chain for flexibility and agility. This appears particularly challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the potential to do it.
Second, it was found that more attention was necessary 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 made available to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to boost market shares in which competitors miss opportunities. This challenge is not new, although it has additionally been underexposed in this specific crisis and was often not a part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the economic impact of a crisis additionally depends on the manner in which cooperation in the chain is set up. It is often unclear exactly how further expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain functionality are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the basic considerations between logistics and production on the one hand and advertising and marketing on the other, the potential future will have to explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?