Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its influence on the planet. Economic indicators and health have been compromised and all industries have been completely touched within one way or another. Among the industries in which this was clearly visible is the agriculture and food industry.
In 2019, the Dutch extension and food sector 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 in 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was clear to numerous men and women that there was a huge effect at the end of the chain (e.g., hoarding around food markets, restaurants closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors within the supply chain for that the impact is much less clear. It is therefore important to determine how properly the food supply chain as a whole is prepared to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food resources chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Need within retail up, contained food service down It’s obvious and widely known that need in the foodservice channels went down due to the closure of joints, amongst others. In a few instances, sales for suppliers in the food service industry therefore fell to about twenty % of the first volume. Being an adverse reaction, demand in the retail stations went up and remained within a level of aproximatelly 10-20 % greater than before the problems began.
Products which had to come via abroad had the own issues of theirs. With the shift in demand coming from foodservice to retail, the need for packaging improved considerably, More tin, cup and plastic was needed for wearing in customer packaging. As much more of this particular packaging material concluded up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had an important effect on production activities. In certain cases, this even meant a full stop of production (e.g. within the duck farming industry, which came to a standstill on account of demand fall-out on the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea bins to slow down fairly shortly in 2020. This resulted in transport electrical capacity which is limited during the very first weeks of the crisis, and expenses that are high for container transport as a consequence. Truck transport experienced various problems. Initially, there were uncertainties about how transport would be managed for borders, which in the long run weren’t as strict as feared. That which was problematic in situations that are many , nonetheless, was the accessibility of motorists.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the core components of supply chain resilience:
Using this framework for the analysis of the interview, the conclusions show that not many businesses had been well prepared for the corona problems and actually mostly applied responsive practices. The most notable supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This looks especially challenging for small companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often do not have the capacity to do it.
Next, it was discovered that more attention was necessary on spreading risk and aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be given to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and clever rationing strategies in situations where need cannot be met. Explicit prioritization is required to keep on to meet market expectations but also to improve market shares wherein competitors miss opportunities. This particular challenge isn’t new, however, it’s in addition been underexposed in this problems and was frequently not a component of preparatory activities.
Fourthly, the corona problems shows you us that the financial impact of a crisis also depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear how further costs (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain characteristics are in the driving seat during a crisis. Product development and marketing activities need to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally switch the traditional considerations between logistics and production on the one hand as well as advertising on the other hand, the long term will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?