Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the planet. health and Economic indicators have been compromised and all industries have been touched within a way or even yet another. One of the industries in which it was clearly apparent would be the farming as well as food industry.
Throughout 2019, the Dutch agriculture as well as food niche 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 in 2020. The hospitality trade 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 significant consequences for the Dutch economy and food security as lots of stakeholders are impacted. Even though it was clear to a lot of folks that there was a huge impact at the tail end of the chain (e.g., hoarding around food markets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for that the effect is much less clear. It is thus vital that you figure out how well the food supply chain as being a whole is actually prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand within retail up, in food service down It is evident and widely known that demand in the foodservice stations went down due to the closure of places, amongst others. In certain instances, sales for suppliers of the food service industry as a result fell to about twenty % of the initial volume. Being a side effect, demand in the retail channels went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis began.
Products that had to come from abroad had their very own issues. With the shift in demand coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup and plastic was required for wearing in buyer packaging. As more of this packaging material ended up in consumers’ houses rather than in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a significant affect on production activities. In certain instances, this even meant a complete stop of output (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 part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is limited during the first weeks of the issues, and expenses that are high for container transport as a direct result. Truck travel encountered different problems. At first, there were uncertainties regarding how transport would be managed at borders, which in the long run weren’t as strict as feared. What was problematic in most situations, however, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the main things of supply chain resilience:
Using this particular framework for the assessment of the interview, the results show that not many companies were well prepared for the corona problems and actually mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
For starters, the need to develop the supply chain for agility and versatility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capability to do so.
Next, it was found that more interest was necessary on spreading risk and also aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be provided to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases where demand cannot be met. Explicit prioritization is necessary to continue to meet market expectations but in addition to boost market shares where competitors miss options. This particular challenge isn’t new, however, it has in addition been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona problems shows us that the financial result of a crisis additionally relies on the manner in which cooperation in the chain is set up. It’s usually unclear precisely how further costs (and benefits) are actually distributed in a chain, if at all.
Finally, relative to other purposeful departments, the businesses and supply chain operates are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally change the classic discussions between production and logistics on the one hand as well as marketing on the other hand, the long term must tell.
How’s the Dutch food supply chain coping throughout the corona crisis?