Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its impact on the world. Economic indicators and health have been compromised and all industries have been completely touched inside a way or some other. One of the industries in which this was clearly apparent would be the farming as well as food business.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was clear to many people that there was a significant effect at the conclusion of this chain (e.g., hoarding in food markets, eateries closing) and at the start of the chain (e.g., harvested potatoes not finding customers), you will find many actors inside the source chain for which the effect is less clear. It’s therefore imperative that you find out how properly the food supply chain as being a whole is actually armed to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic throughout the food supply chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Need within retail up, found food service down It’s apparent and popular that need in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for suppliers of the food service industry as a result fell to about twenty % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained within a degree of about 10-20 % greater than before the crisis began.
Products which had to come through abroad had their own issues. With the change in demand coming from foodservice to retail, the demand for packaging changed considerably, More tin, cup and plastic was required for use in customer packaging. As much more of this packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had an important affect on production activities. In some instances, this even meant the full stop in output (e.g. within the duck farming business, which arrived to a standstill due to demand fall out on the foodservice sector). In other cases, a significant section 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 beginning of the Corona crisis in China triggered the flow of sea containers to slow down fairly soon in 2020. This resulted in restricted transport capability during the first weeks of the issues, and high costs for container transport as a result. Truck travel encountered different issues. Initially, there were uncertainties about how transport will be handled at borders, which in the long run weren’t as rigid as feared. The thing that was problematic in most situations, however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this primary things of supply chain resilience:
Using this particular framework for the assessment of the interviews, the conclusions show that not many companies had been well prepared for the corona problems and in fact mainly applied responsive methods. Probably the most important source chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
First, the need to design the supply chain for agility as well as versatility. This looks especially challenging for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually do not have the capacity to do so.
Second, it was found that much more attention was necessary on spreading threat and also aiming for risk reduction in the supply chain. For the future, what this means is more attention has to be provided to the way companies depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing techniques in situations where need cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to increase market shares where competitors miss options. This particular task isn’t new, though it’s also been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona issues shows us that the monetary result of a crisis in addition is determined by the way cooperation in the chain is set up. It is usually unclear how further expenses (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain works are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally change the basic discussions between generation and logistics on the one hand and marketing on the other, the potential future will have to tell.
How’s the Dutch food supply chain coping throughout the corona crisis?