Supply chain – The COVID-19 pandemic has certainly had the impact of its impact on the world. health and Economic indicators have been compromised and all industries are touched within one way or perhaps yet another. Among the industries in which this was clearly visible is the farming as well as food business.
In 2019, the Dutch farming and 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 within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as many stakeholders are affected. Even though it was clear to most people that there was a huge impact at the end of this chain (e.g., hoarding in food markets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors in the supply chain for which the impact is less clear. It is therefore vital 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 University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supply chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Demand within retail up, contained food service down It is obvious and widely known that need in the foodservice stations went down as a result of the closure of joints, 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 retail channels went up and remained within a level of about 10 20 % higher than before the crisis began.
Products that had to come through abroad had their own problems. With the change in desire coming from foodservice to retail, the need for packaging changed considerably, More tin, cup and plastic material was necessary for use in buyer packaging. As more of this particular packaging material concluded up in consumers’ houses rather than in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a major effect on output activities. In certain instances, this even meant a full stop in output (e.g. in the duck farming industry, which came to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a big part of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is limited during the earliest weeks of the issues, and high costs for container transport as a consequence. Truck transport faced various problems. To begin with, there were uncertainties regarding how transport will be managed at borders, which in the end were not as strict as feared. What was problematic in situations that are most , nevertheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the main things of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions show that few organizations were well prepared for the corona crisis and actually mostly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to design the supply chain for agility as well as flexibility. This looks especially challenging for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capacity to do so.
Second, it was discovered that much more interest was required on spreading threat as well as aiming for risk reduction in the supply chain. For the future, meaning more attention has to be given to the way organizations count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and intelligent rationing strategies in cases in which demand can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but additionally to improve market shares in which competitors miss opportunities. This task is not new, however, it’s in addition been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona issues shows us that the economic result of a crisis also relies on the way cooperation in the chain is set up. It is often unclear how further expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally switch the classic discussions between generation and logistics on the one hand as well as advertising on the other, the long term must explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?