Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the planet. health and Economic indicators have been affected and all industries are touched within one way or yet another. One of the industries in which this was clearly apparent will be the farming and food business.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to a lot of individuals that there was a big effect at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the supply chain for that will the impact is less clear. It is therefore important to determine how well the food supply chain as being a whole is actually prepared to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with about thirty Dutch source chain actors.
Need in retail up, found food service down It is obvious and widely known that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In certain instances, sales for vendors in the food service industry thus fell to about twenty % of the first volume. As a complication, demand in the retail channels went up and remained within a degree of aproximatelly 10-20 % higher than before the crisis started.
Goods that had to come via abroad had their very own problems. With the shift in desire coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic was needed for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ houses instead of in places, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a significant effect on production activities. In certain instances, this even meant the full stop in production (e.g. within the duck farming business, which arrived to a standstill on account 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), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capacity which is restricted throughout the first weeks of the crisis, and costs which are high for container transport as a result. Truck transport encountered various issues. At first, there were uncertainties on how transport will be handled for borders, which in the long run were not as rigid as feared. What was problematic in situations which are most, however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of the core components of supply chain resilience:
To us this framework for the assessment of the interviews, the findings show that not many companies were nicely prepared for the corona problems and actually mainly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This seems especially complicated for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations usually do not have the capacity to accomplish that.
Second, it was observed that much more attention was needed on spreading danger as well as aiming for risk reduction inside the supply chain. For the future, this means far more attention should be given to the way organizations count on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and clever rationing techniques in cases in which demand can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but additionally to increase market shares where competitors miss opportunities. This particular challenge is not new, however, it’s in addition been underexposed in this specific crisis and was often not a part of preparatory activities.
Fourthly, the corona issues teaches us that the economic result of a crisis additionally relies on the way cooperation in the chain is actually set up. It is typically unclear exactly how extra expenses (and benefits) are sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain features are actually in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the basic considerations between logistics and creation on the one hand and advertising on the other, the potential future will need to tell.
How is the Dutch food supply chain coping during the corona crisis?