Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the planet. health and Economic indicators have been compromised and all industries have been completely touched inside a way or another. One of the industries in which it was clearly obvious would be the farming and food business.
In 2019, the Dutch agriculture and food sector 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 industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as many stakeholders are impacted. Though it was apparent to many individuals that there was a great impact at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the supply chain for which the effect is less clear. It is thus vital that you figure out how effectively the food supply chain as a whole is actually equipped to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Demand in retail up, that is found food service down It’s obvious and widely known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In some instances, sales for vendors of the food service industry thus fell to about 20 % of the original volume. As an adverse reaction, demand in the retail channels went up and remained within a level of aproximatelly 10-20 % greater than before the problems began.
Products that had to come via abroad had their own issues. With the change in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, cup and plastic material was needed for use in consumer packaging. As more of this product packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had an important effect on output activities. In certain instances, this even meant a total stop of production (e.g. within the duck farming industry, which emerged to a standstill as a result of demand fall-out inside the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is limited during the earliest weeks of the problems, and expenses that are high for container transport as a result. Truck transport faced various problems. At first, there were uncertainties on how transport will be handled for borders, which in the long run weren’t as rigid as feared. That which was problematic in instances which are many, nevertheless, was the availability of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the key elements of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the conclusions show that not many businesses were well prepared for the corona problems and in reality mostly applied responsive practices. The most important source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
To begin with, the need to create the supply chain for flexibility and agility. This appears particularly challenging for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to do so.
Second, it was observed that more attention was necessary on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be made available to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as clever rationing techniques in cases where need cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to increase market shares where competitors miss opportunities. This challenge is not new, however, it’s in addition been underexposed in this specific problems and was frequently not a part of preparatory pursuits.
Fourthly, the corona crisis teaches us that the financial result of a crisis in addition depends on the manner in which cooperation in the chain is set up. It is typically unclear precisely how additional expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally change the basic discussions between logistics and production on the one hand as well as marketing and advertising on the other hand, the potential future will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?