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 touched inside a way or perhaps some other. Among the industries in which this was clearly noticeable would be the farming and 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 dropped € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy and food security as many stakeholders are impacted. Despite the fact that it was apparent to majority of folks that there was a great effect at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for that will the effect is much less clear. It is thus imperative that you figure out how properly the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with about 30 Dutch source chain actors.
Demand in retail up, found food service down It’s evident and well known that need in the foodservice stations went down due to the closure of joints, amongst others. In certain cases, sales for vendors of the food service business therefore fell to about twenty % of the first volume. As an adverse reaction, demand in the retail stations went up and remained within a degree of aproximatelly 10-20 % greater than before the crisis began.
Goods that had to come through abroad had the own issues of theirs. With the shift in desire coming from foodservice to retail, the demand for packaging improved considerably, More tin, cup or plastic was necessary for wearing in consumer packaging. As much more of this product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had a significant affect on production activities. In a few cases, this even meant a full stop of production (e.g. inside the duck farming business, which arrived to a standstill due to demand fall-out on the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in transport electrical capacity that is limited during the very first weeks of the issues, and costs which are high for container transport as a result. Truck travel faced different problems. Initially, there were uncertainties regarding how transport would be handled at borders, which in the long run weren’t as strict as feared. That which was problematic in cases that are most , nevertheless, was the accessibility of motorists.
The response to COVID 19 – supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the key elements of supply chain resilience:
Using this particular framework for the assessment of the interview, the results indicate that not many organizations were nicely prepared for the corona crisis and in reality mainly applied responsive practices. Probably the most notable supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to create the supply chain for flexibility as well as agility. This looks especially challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to accomplish that.
Second, it was observed that more interest was necessary on spreading threat and also aiming for risk reduction in the supply chain. For the future, this means far more attention has to be given to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing strategies in cases in which demand cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to improve market shares in which competitors miss options. This task is not new, but it has in addition been underexposed in this crisis and was often not part of preparatory activities.
Fourthly, the corona problems teaches us that the financial effect of a crisis additionally is determined by the way cooperation in the chain is actually set up. It is typically unclear precisely how further expenses (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain features are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally replace the classic discussions between creation and logistics on the one hand and marketing and advertising on the other hand, the potential future will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?