Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been affected and all industries have been touched in one way or even some other. Among the industries in which it was clearly visible is the agriculture as well as food industry.
In 2019, the Dutch agriculture and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Though it was apparent to a lot of people that there was a huge impact at the end of the chain (e.g., hoarding doing supermarkets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the source chain for that the impact is much less clear. It is thus imperative that you determine how well the food supply chain as a whole is actually armed to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food resources chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Need in retail up, contained food service down It is obvious and well known that need in the foodservice stations went down due to the closure of joints, amongst others. In certain cases, sales for suppliers in the food service business as a result fell to aproximatelly 20 % of the initial volume. As a complication, demand in the list channels went up and remained at a level of aproximatelly 10-20 % higher than before the crisis began.
Products that had to come via abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic was required for use in customer packaging. As much more of this particular packaging material concluded up in consumers’ homes instead of in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a significant affect on output activities. In certain cases, this even meant a full stop in output (e.g. within the duck farming industry, which came to a standstill due to demand fall out in the foodservice sector). In other instances, a major portion of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is restricted throughout the first weeks of the problems, and expenses which are high for container transport as a result. Truck travel faced various issues. Initially, there were uncertainties on how transport would be handled at borders, which in the end weren’t as stringent as feared. That which was problematic in situations that are a large number of , nonetheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the core components of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the results show that few companies were well prepared for the corona crisis and actually mostly applied responsive practices. The most important source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
For starters, the need to create the supply chain for versatility as well as agility. This appears particularly challenging for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capacity to do it.
Second, it was found that more interest was necessary on spreading danger and also aiming for risk reduction in the supply chain. For the future, this means far more attention should be made available to the way businesses count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and smart rationing strategies in cases in which need cannot be met. Explicit prioritization is necessary to continue to satisfy market expectations but also to boost market shares wherein competitors miss options. This challenge is not new, although it has additionally been underexposed in this specific problems and was frequently not a component of preparatory pursuits.
Fourthly, the corona problems teaches us that the monetary effect of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It’s typically unclear exactly how further expenses (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain works are in the driving accommodate during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally replace the classic considerations between generation and logistics on the one hand and advertising and marketing on the other, the potential future will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?