Supply chain – The COVID-19 pandemic has certainly had its impact effect on the planet. Economic indicators and health have been affected and all industries have been touched in a way or perhaps another. One of the industries in which it was clearly obvious would be the farming as well as food industry.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as many stakeholders are affected. Though it was apparent to a lot of men and women that there was a significant effect at the conclusion of this chain (e.g., hoarding around grocery stores, restaurants closing) as well as at the start 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 therefore vital that you figure out how well the food supply chain as a whole is equipped to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Demand in retail up, in food service down It is evident and well known that demand in the foodservice channels went down due to the closure of restaurants, amongst others. In some instances, sales for vendors of the food service business thus fell to about 20 % of the original volume. As an adverse reaction, demand in the list stations went up and remained within a quality of aproximatelly 10-20 % greater than before the problems started.
Goods that had to come from abroad had their own issues. With the change in need from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic was required for wearing in customer packaging. As more of this particular packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had a significant effect on output activities. In a few instances, this even meant a full stop in production (e.g. within the duck farming business, which emerged to a standstill due to demand fall-out inside the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capacity that is limited throughout the first weeks of the crisis, and costs that are high for container transport as a result. Truck travel experienced various issues. At first, there were uncertainties about how transport will be handled at borders, which in the end weren’t as stringent as feared. What was problematic in instances which are a large number of, nevertheless, was the accessibility of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this main things of supply chain resilience:
Using this framework for the analysis of the interviews, the results indicate that few businesses had been well prepared for the corona problems and actually mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure one. Eight best methods for meals supply chain resilience
First, the need to develop the supply chain for flexibility as well as agility. This looks particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capacity to do it.
Next, it was found that much more attention was necessary on spreading risk and also aiming for risk reduction in the supply chain. For the future, meaning more attention ought to be made available to the way businesses count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in situations where need can’t be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but in addition to increase market shares where competitors miss opportunities. This particular task isn’t new, although it’s also been underexposed in this specific problems and was usually not a component of preparatory activities.
Fourthly, the corona problems shows us that the economic impact of a crisis additionally relies on the way cooperation in the chain is set up. It’s often unclear precisely how further costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally replace the classic considerations between logistics and creation on the one hand as well as marketing on the other hand, the potential future will need to tell.
How is the Dutch food supply chain coping during the corona crisis?