Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been compromised and all industries have been touched within one way or some other. One of the industries in which this was clearly noticeable will be the agriculture and food industry.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the gross domestic item (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 enhanced the turnover of theirs 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 affected. Though it was apparent to majority of folks that there was a big impact at the conclusion of the chain (e.g., hoarding in supermarkets, eateries closing) and also at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for which the effect is less clear. It is thus vital that you find out how properly the food supply chain as being a whole is equipped to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supply chain. They based their analysis on interviews with around 30 Dutch source chain actors.
Demand in retail up, in food service down It’s evident and popular that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few instances, sales for suppliers in the food service business thus fell to about 20 % of the initial volume. As a side effect, demand in the retail channels went up and remained within a degree of aproximatelly 10 20 % greater than before the problems started.
Products which had to come via abroad had the own problems of theirs. With the shift in need from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic material was necessary for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ houses as opposed to in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in demand have had a significant impact on production activities. In a few instances, this even meant a total stop in output (e.g. within the duck farming business, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a big part of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport capability that is limited during the very first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transport encountered various issues. To begin with, there were uncertainties regarding how transport will be managed for borders, which in the long run were not as strict as feared. That which was problematic in instances which are a large number of, however, was the availability of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key things of supply chain resilience:
To us this particular framework for the analysis of the interviews, the results show that few companies had been well prepared for the corona crisis and in fact mainly applied responsive practices. The most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to design the supply chain for versatility as well as agility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to accomplish that.
Next, it was found that much more attention was required on spreading threat and also aiming for risk reduction in the supply chain. For the future, this means more attention has to be made available to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in cases in which demand cannot be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to boost market shares in which competitors miss options. This particular task isn’t new, however, it’s in addition been underexposed in this crisis and was frequently not a part of preparatory activities.
Fourthly, the corona issues teaches us that the economic effect of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear exactly how further costs (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving seat during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally switch the traditional considerations between production and logistics on the one hand as well as advertising and marketing on the other, the future will need to explain to.
How is the Dutch meal supply chain coping throughout the corona crisis?