Supply chain – The COVID-19 pandemic has definitely had its impact impact on the planet. health and Economic indicators have been affected and all industries have been touched within one way or yet another. One of the industries in which this was clearly apparent is the farming as well as food industry.
Throughout 2019, the Dutch extension as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Even though it was apparent to a lot of folks that there was a great effect at the tail end of the chain (e.g., hoarding doing grocery stores, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the supply chain for that the impact is less clear. It’s thus important to determine how effectively the food supply chain as a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It is apparent and popular that demand in the foodservice stations 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 20 % of the original volume. As an adverse reaction, demand in the list stations went up and remained at a level of aproximatelly 10-20 % higher than before the crisis began.
Goods that had to come via abroad had their own problems. With the shift in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, cup and plastic material was needed for use in customer packaging. As more of this particular product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a major effect on output activities. In certain cases, this even meant a total stop in output (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities 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 limited transport capability during the very first weeks of the crisis, and expenses that are high for container transport as a consequence. Truck transportation faced different problems. To begin with, there were uncertainties regarding how transport will be managed at borders, which in the long run were not as strict as feared. The thing that was problematic in cases which are most, nonetheless, was the availability of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the core things of supply chain resilience:
Using this framework for the evaluation of the interview, the findings show that few businesses were well prepared for the corona problems and actually mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to develop the supply chain for versatility and agility. This looks particularly challenging for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to do it.
Next, it was discovered that much more interest was necessary on spreading risk as well as aiming for risk reduction within the supply chain. For the future, meaning more attention ought to be given to the manner in which businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as clever rationing techniques in cases in which need can’t be met. Explicit prioritization is required to keep on to meet market expectations but also to increase market shares wherein competitors miss opportunities. This task isn’t new, however, it has also been underexposed in this crisis and was usually not part of preparatory activities.
Fourthly, the corona problems teaches us that the monetary impact of a crisis in addition is determined by the way cooperation in the chain is actually set up. It is typically unclear how additional expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain functions are actually in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain activities. Whether the corona pandemic will structurally replace the traditional discussions between creation and logistics on the one hand and marketing on the other hand, the long term will need to explain to.
How is the Dutch foods supply chain coping during the corona crisis?