Supply chain – The COVID-19 pandemic has certainly had its impact influence on the planet. Economic indicators and health have been compromised and all industries have been touched in a way or some other. Among the industries in which this was clearly apparent would be the agriculture and food business.
Throughout 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to numerous people that there was a huge effect at the tail end of this chain (e.g., hoarding doing grocery stores, eateries closing) and at the start of the chain (e.g., harvested potatoes not finding customers), there are many actors inside 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 being a whole is actually equipped 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, analyzed the influences of the COVID 19 pandemic all over the food supplies chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand in retail up, contained food service down It’s evident and widely known that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some cases, sales for vendors of the food service industry thus fell to about 20 % of the initial volume. Being an adverse reaction, demand in the retail channels went up and remained at a degree of about 10 20 % greater than before the problems began.
Products that had to come from abroad had the own problems of theirs. With the change in demand from foodservice to retail, the need for packaging changed dramatically, More tin, glass and plastic material was required for use in buyer packaging. As much more of this packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling function got disrupted also, causing shortages.
The shifts in desire have had a big impact on production activities. In a few instances, this even meant a complete stop in output (e.g. inside the duck farming business, which emerged to a standstill due to demand fall-out inside the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the meat processing industry), resulting in 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 which is restricted throughout the first weeks of the problems, and expenses which are high for container transport as a consequence. Truck transportation experienced various problems. Initially, there were uncertainties on how transport will be handled at borders, which in the long run were not as stringent as feared. The thing that was problematic in instances that are most , nonetheless, was the availability of motorists.
The reaction to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of the primary components of supply chain resilience:
To us this particular framework for the assessment of the interviews, the findings show that not many companies were nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to develop the supply chain for agility and versatility. This appears particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the potential to do it.
Second, it was found that much more attention was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, this means more attention ought to be given to the way companies count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and intelligent rationing strategies in situations where demand can’t be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to increase market shares where competitors miss opportunities. This particular task is not new, though it’s also been underexposed in this specific crisis and was often not a component of preparatory activities.
Fourthly, the corona problems teaches us that the financial impact of a crisis also is determined by the manner in which cooperation in the chain is set up. It’s usually unclear how extra expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the basic discussions between creation and logistics on the one hand and marketing and advertising on the other, the potential future must tell.
How is the Dutch foods supply chain coping during the corona crisis?