Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been compromised and all industries are touched in one way or even yet another. Among the industries in which it was clearly noticeable would be the agriculture as well as food industry.
In 2019, the Dutch extension and food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion in 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 major effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was apparent to a lot of folks that there was a great impact at the conclusion of the chain (e.g., hoarding around grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), there are many actors in the supply chain for that will the effect is much less clear. It is therefore important to determine how well the food supply chain as a whole is armed to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about thirty Dutch supply chain actors.
Demand within retail up, contained food service down It is evident and well known that need in the foodservice channels went down due to the closure of places, amongst others. In some cases, sales for suppliers of the food service industry therefore fell to aproximatelly twenty % of the original volume. As a side effect, demand in the retail channels went up and remained within a quality of about 10-20 % higher than before the problems began.
Products that had to come through abroad had the own issues of theirs. With the change in need from foodservice to retail, the demand for packaging changed considerably, More tin, cup or plastic was needed for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ houses as opposed to in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in demand have had a big effect on output activities. In certain cases, this even meant the full stop in output (e.g. within the duck farming industry, which arrived to a standstill on account of demand fall out on the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down pretty soon in 2020. This resulted in limited transport capability during the very first weeks of the crisis, and costs which are high for container transport as a direct result. Truck transportation encountered various problems. At first, there were uncertainties on how transport would be managed at borders, which in the long run weren’t as strict as feared. The thing that was problematic in a large number of instances, nevertheless, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of this main elements of supply chain resilience:
To us this framework for the evaluation of the interviews, the findings indicate that few organizations had been well prepared for the corona crisis and in fact mostly applied responsive methods. The most important supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
First, the need to create the supply chain for versatility and agility. This seems particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations usually don’t have the capability to do so.
Second, it was discovered that more attention was necessary on spreading danger and also aiming for risk reduction inside the supply chain. For the future, meaning far more attention ought to be provided to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing strategies in situations in which need can’t be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to improve market shares wherein competitors miss opportunities. This task is not new, although it has also been underexposed in this crisis and was often not part of preparatory activities.
Fourthly, the corona problems shows us that the financial impact of a crisis in addition depends on the way cooperation in the chain is actually set up. It is often unclear how further costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain events. Whether the corona pandemic will structurally change the traditional considerations between logistics and generation on the one hand as well as advertising and marketing on the other, the future will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?