Supply chain – The COVID-19 pandemic has definitely had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been completely touched within a way or even some other. Among the industries in which it was clearly obvious is the farming as well as food business.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to majority of folks that there was a great impact at the end of the chain (e.g., hoarding doing food markets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the source chain for that will the impact is much less clear. It’s thus important to find out how well the food supply chain as a whole is actually prepared to deal 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, studied the consequences of the COVID 19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with about thirty Dutch source chain actors.
Demand within retail up, contained food service down It’s evident and popular that need in the foodservice stations went down as a result of the closure of places, amongst others. In some instances, sales for vendors in the food service industry thus fell to aproximatelly 20 % of the original volume. Being a complication, demand in the list stations went up and remained at a quality of about 10-20 % higher than before the crisis began.
Products that had to come via abroad had their own problems. With the shift in need coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup and plastic was necessary for wearing in consumer packaging. As more of this particular packaging material ended up in consumers’ homes rather than in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a big impact on production activities. In some cases, this even meant the full stop in production (e.g. in the duck farming business, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits 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 restricted transport capacity during the earliest weeks of the issues, and costs that are high for container transport as a direct result. Truck travel encountered different issues. At first, there were uncertainties about how transport would be handled at borders, which in the long run weren’t as rigid as feared. What was problematic in most cases, nevertheless, was the accessibility of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this key elements of supply chain resilience:
To us this framework for the analysis of the interviews, the findings indicate that not many organizations were well prepared for the corona crisis and actually mainly applied responsive practices. The most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This appears especially challenging for smaller companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capacity to accomplish that.
Second, it was found that much more interest was necessary on spreading risk and also aiming for risk reduction within the supply chain. For the future, meaning far more attention should be given to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and smart rationing techniques in cases where demand can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but in addition to boost market shares wherein competitors miss options. This challenge isn’t new, although it has additionally been underexposed in this specific problems and was often not a component of preparatory activities.
Fourthly, the corona issues shows us that the financial impact of a crisis also relies on the manner in which cooperation in the chain is set up. It is usually unclear precisely how extra expenses (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally replace the classic discussions between logistics and production on the one hand and advertising on the other, the long term will have to tell.
How’s the Dutch food supply chain coping during the corona crisis?