Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched inside one of the ways or even yet another. One of the industries in which this was clearly visible is the farming and food business.
Throughout 2019, the Dutch agriculture as well as 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 in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as lots of stakeholders are affected. Despite the fact that it was clear to many folks that there was a great effect at the end of this chain (e.g., hoarding in supermarkets, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the source chain for which the effect is much less clear. It is therefore imperative that you figure out how properly the food supply chain as being a whole is equipped to contend with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about thirty Dutch supply chain actors.
Need within retail up, contained food service down It is obvious and popular that need in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for vendors of the food service industry as a result fell to aproximatelly 20 % of the first volume. Being a side effect, demand in the retail stations went up and remained within a quality of aproximatelly 10 20 % higher than before the crisis started.
Products that had to come from abroad had their very own problems. With the change in desire coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was necessary for wearing 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 too, causing shortages.
The shifts in demand have had a significant effect on production activities. In certain cases, this even meant a full stop of production (e.g. in the duck farming business, which came to a standstill as a result of demand fall out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea canisters to slow down pretty soon in 2020. This resulted in restricted transport electrical capacity throughout the first weeks of the crisis, and high expenses for container transport as a consequence. Truck transportation faced different problems. At first, there were uncertainties about how transport would be handled for borders, which in the long run were not as strict as feared. What was problematic in many cases, nevertheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this main elements of supply chain resilience:
Using this particular framework for the assessment of the interviews, the findings indicate that not many companies were well prepared for the corona crisis and in reality mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
To begin with, the need to develop the supply chain for agility as well as versatility. This looks especially complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the capability to accomplish that.
Second, it was discovered that more attention was required on spreading risk as well as aiming for risk reduction in the supply chain. For the future, this means far more attention should be provided to the way businesses depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in cases where need can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to boost market shares wherein competitors miss options. This task isn’t new, though it has additionally been underexposed in this specific crisis and was often not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the financial impact of a crisis in addition depends on the manner in which cooperation in the chain is set up. It’s usually unclear precisely how additional expenses (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in hand with supply chain activities. Whether the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand as well as marketing on the other hand, the future will have to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?