Supply chain – The COVID-19 pandemic has certainly had its impact influence on the world. Economic indicators and health have been affected and all industries have been touched in a way or even some other. Among the industries in which this was clearly noticeable would be the farming as well as food industry.
In 2019, the Dutch farming and food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover 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 consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Even though it was clear to most people that there was a huge effect at the tail end of this chain (e.g., hoarding around food markets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors within the source chain for which the effect is less clear. It is therefore vital that you determine how well the food supply chain as being a whole is prepared to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It’s evident and well known that need in the foodservice channels went down due to the closure of restaurants, amongst others. In certain instances, sales for vendors of the food service business as a result fell to about 20 % of the first volume. Being a side effect, demand in the list channels went up and remained at a degree of about 10 20 % higher than before the problems started.
Products which had to come through abroad had their own problems. With the shift in desire from foodservice to retail, the need for packaging changed considerably, More tin, cup and plastic material was required for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ homes as opposed to in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a major impact on production activities. In a few instances, this even meant a complete stop of production (e.g. within the duck farming business, which arrived to a standstill as a result of demand fall out on the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport electrical capacity which is limited throughout the earliest weeks of the problems, and costs which are high for container transport as a direct result. Truck transportation encountered various problems. To begin with, there were uncertainties about how transport would be handled for borders, which in the end weren’t as strict as feared. That which was problematic in most instances, nonetheless, was the accessibility of motorists.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this key components of supply chain resilience:
To us this particular framework for the assessment of the interviews, the conclusions indicate that not many organizations had been nicely prepared for the corona problems and in fact mostly applied responsive practices. Probably the most notable 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 versatility. This looks particularly complicated for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capability to do so.
Second, it was discovered that more attention was necessary on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means 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 strategies in cases where need cannot be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to boost market shares wherein competitors miss options. This challenge is not new, though it’s also been underexposed in this crisis and was frequently not a component of preparatory activities.
Fourthly, the corona problems teaches us that the monetary result of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s often unclear how additional expenses (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations 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 activities. Whether the corona pandemic will structurally change the basic considerations between production and logistics on the one hand and advertising and marketing on the other, the long term will need to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?