Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the planet. Economic indicators and health have been compromised and all industries have been touched inside a way or some other. Among the industries in which it was clearly noticeable would be the farming and food industry.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to most individuals that there was a significant effect at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors in the source chain for that the impact is less clear. It’s thus vital that you figure out how well the food supply chain as a whole is actually armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with about 30 Dutch supply chain actors.
Need in retail up, contained food service down It’s apparent and widely known that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In a few cases, sales for vendors in the food service industry thus fell to about twenty % of the first volume. As a side effect, demand in the retail stations went up and remained at a level of aproximatelly 10-20 % greater than before the problems started.
Products that had to come via abroad had the own issues of theirs. With the change in need from foodservice to retail, the requirement for packaging changed considerably, More tin, glass and plastic material was needed for use in customer packaging. As much more of this particular product packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a big effect on production activities. In a few cases, this even meant the full stop of output (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out on the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. to the various meats 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 bins to slow down pretty shortly in 2020. This resulted in transport capacity that is limited throughout the very first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transportation faced different issues. Initially, there were uncertainties on how transport will be managed for borders, which in the long run were not as strict as feared. The thing that was problematic in instances which are a large number of, nonetheless, was the accessibility of drivers.
The reaction to COVID 19 – supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of this core things of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the conclusions indicate that not many companies had been well prepared for the corona problems and actually mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This seems especially complicated for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the capacity to do so.
Next, it was observed that much more attention was required on spreading risk and aiming for risk reduction within the supply chain. For the future, what this means is more attention should be given to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing strategies in cases where need cannot be met. Explicit prioritization is actually necessary to continue to meet market expectations but additionally to improve market shares where competitors miss opportunities. This particular challenge isn’t new, although it’s also been underexposed in this specific crisis and was often not part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the monetary result of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It’s typically unclear exactly how further expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Whether the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand as well as advertising on the other hand, the potential future must explain to.
How is the Dutch meal supply chain coping during the corona crisis?