Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been affected and all industries are touched in one way or even yet another. Among the industries in which it was clearly obvious is the farming as well as food industry.
Throughout 2019, the Dutch extension as well as food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality business 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 significant effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was apparent to many folks that there was a huge impact at the conclusion of the chain (e.g., hoarding around grocery stores, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for that will the effect is much less clear. It is thus vital that you determine how effectively the food supply chain as a whole is armed to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Demand within retail up, that is found food service down It’s evident and well known that need in the foodservice stations went down due to the closure of places, amongst others. In certain instances, sales for vendors of the food service industry thus fell to about 20 % of the initial volume. As an adverse reaction, demand in the retail stations went up and remained at a quality of about 10-20 % higher than before the problems began.
Products which had to come via abroad had their very own problems. With the shift in desire coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup and plastic material was needed for wearing in buyer packaging. As much more of this product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a major effect on production activities. In certain cases, this even meant the full stop of production (e.g. within the duck farming industry, which came to a standstill due to demand fall-out inside the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in restricted transport capacity throughout the earliest weeks of the problems, and costs that are high for container transport as a result. Truck transport experienced various problems. At first, there were uncertainties on how transport would be handled for borders, which in the long run weren’t as strict as feared. That which was problematic in most cases, nevertheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the key things of supply chain resilience:
To us this framework for the analysis of the interviews, the findings indicate that few businesses were nicely prepared for the corona crisis and in reality mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
First, the need to design the supply chain for versatility and agility. This looks especially complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the potential to do it.
Second, it was observed that more interest was required on spreading danger and also aiming for risk reduction within the supply chain. For the future, what this means is far more attention ought to be given to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but additionally to improve market shares in which competitors miss options. This particular challenge is not new, but it has also been underexposed in this problems and was frequently not part of preparatory activities.
Fourthly, the corona problems shows you us that the monetary impact of a crisis also depends on the way cooperation in the chain is actually set up. It’s usually unclear precisely how further expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the operations and supply chain features are actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain pursuits. Whether or not the corona pandemic will structurally replace the basic discussions between generation and logistics on the one hand and marketing and advertising on the other, the potential future will have to tell.
How is the Dutch food supply chain coping during the corona crisis?