Supply chain – The COVID-19 pandemic has certainly had its impact influence on the world. health and Economic indicators have been compromised and all industries have been completely touched within one of the ways or even yet another. One of the industries in which it was clearly visible is the farming as well as food industry.
In 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 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 of the food chain have significant consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Despite the fact that it was apparent to numerous individuals that there was a significant impact at the conclusion of the chain (e.g., hoarding doing grocery stores, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), there are numerous actors in the supply chain for which the effect is much less clear. It is thus important to figure out how properly the food supply chain as being a whole is actually prepared to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food resources chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, in food service down It is apparent and widely known that demand in the foodservice stations went down due to the closure of places, amongst others. In some cases, sales for vendors of the food service industry therefore fell to aproximatelly 20 % of the first volume. As a side effect, demand in the list channels went up and remained within a level of about 10 20 % higher than before the problems started.
Products that had to come from abroad had their own issues. With the shift in desire from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic was necessary for use in buyer packaging. As much more of this packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a major affect on output activities. In some cases, this even meant the full stop of production (e.g. within the duck farming industry, which arrived to a standstill due to demand fall-out inside the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is limited during the first weeks of the problems, and expenses which are high for container transport as a consequence. Truck transport encountered various problems. At first, there were uncertainties about how transport would be managed at borders, which in the end weren’t as stringent as feared. That which was problematic in cases which are a large number of, however, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this main components of supply chain resilience:
Using this framework for the evaluation of the interview, the results indicate that few businesses had been well prepared for the corona problems and actually mostly applied responsive practices. The most important supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for flexibility as well as agility. This seems especially complicated for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the potential to do so.
Next, it was observed that more interest was needed on spreading risk as well as aiming for risk reduction in the supply chain. For the future, meaning more attention has to be made available to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in cases where need cannot be met. Explicit prioritization is necessary to continue to satisfy 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 specific problems and was usually not a part of preparatory activities.
Fourthly, the corona crisis shows us that the financial effect of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is typically unclear exactly how further costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change the traditional considerations between logistics and creation on the one hand and marketing and advertising on the other, the long term must tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?