Supply chain – The COVID-19 pandemic has undoubtedly had its impact impact on the world. Economic indicators and health have been affected and all industries are touched in one way or even yet another. Among the industries in which it was clearly noticeable will be the agriculture as well as food industry.
Throughout 2019, the Dutch agriculture as well as food industry contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was apparent to a lot of people that there was a big effect at the conclusion of this chain (e.g., hoarding doing supermarkets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for that the effect is less clear. It is therefore imperative that you find out how properly the food supply chain as a whole is actually armed to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food supply chain. They based their analysis on interviews with about 30 Dutch supply chain actors.
Demand in retail up, in food service down It’s obvious and well known that need in the foodservice channels went down due to the closure of joints, amongst others. In a few cases, sales for suppliers in the food service industry thus fell to aproximatelly 20 % of the initial volume. As a complication, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % higher than before the crisis started.
Products that had to come from abroad had the own issues of theirs. With the shift in need from foodservice to retail, the requirement for packaging changed considerably, More tin, glass and plastic material was required for use in consumer packaging. As more of this particular product packaging material ended up in consumers’ homes rather than in places, the cardboard recycling function got disrupted also, causing shortages.
The shifts in need have had a significant impact on output activities. In certain cases, this even meant a total stop in output (e.g. within the duck farming business, which arrived to a standstill due to demand fall out on the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capacity which is restricted during the earliest weeks of the crisis, and high costs for container transport as a direct result. Truck travel faced various issues. At first, there were uncertainties about how transport will be managed at borders, which in the end were not as strict as feared. The thing that was problematic in instances which are most, nonetheless, was the availability of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the primary elements of supply chain resilience:
To us this framework for the evaluation of the interviews, the results indicate that not many companies had been nicely prepared for the corona crisis and in reality mostly applied responsive methods. Probably the most notable supply chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
First, the need to develop the supply chain for flexibility and agility. This looks particularly challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capability to do so.
Second, it was found that much more interest was required on spreading threat and also aiming for risk reduction in the supply chain. For the future, meaning more attention should be given to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as smart rationing techniques in cases where need cannot be met. Explicit prioritization is actually needed to continue to meet market expectations but also to increase market shares in which competitors miss opportunities. This particular task is not new, but it’s also been underexposed in this crisis and was frequently not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the economic result of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It’s usually unclear precisely how further expenses (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the basic considerations between logistics and generation on the one hand and advertising and marketing on the other, the potential future must tell.
How is the Dutch food supply chain coping throughout the corona crisis?