Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the planet. Economic indicators and health have been affected and all industries are touched within a way or perhaps another. Among the industries in which this was clearly visible is the agriculture and food industry.
In 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry 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 of the food chain have significant consequences for the Dutch economy and food security as lots of stakeholders are affected. Despite the fact that it was clear to majority of people that there was a significant effect at the end of the chain (e.g., hoarding doing grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the supply chain for that will the impact is less clear. It is thus important to figure out how well the food supply chain as a whole is actually equipped to deal 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 effects of the COVID-19 pandemic throughout the food resources chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand within retail up, that is found food service down It’s apparent and well known that demand in the foodservice stations went down on account of the closure of places, amongst others. In certain instances, sales for vendors of the food service industry thus fell to about 20 % of the initial volume. As a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % higher than before the problems started.
Products which had to come through abroad had the own problems of theirs. With the change in demand from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic was necessary for use in consumer packaging. As much more of this product packaging material ended up in consumers’ homes rather than in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a major affect on production activities. In certain instances, this even meant a total stop in production (e.g. in the duck farming business, which came to a standstill on account of demand fall out inside the foodservice sector). In other situations, a major part 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 of China sparked the flow of sea bins to slow down pretty soon in 2020. This resulted in limited transport capacity during the very first weeks of the crisis, and costs that are high for container transport as a consequence. Truck transport encountered different issues. 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 most , however, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key things of supply chain resilience:
Using this framework for the analysis of the interviews, the findings indicate that not many businesses were nicely prepared for the corona problems and in fact mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This seems especially challenging for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the capacity to do so.
Second, it was found that more interest was necessary on spreading danger and also aiming for risk reduction within the supply chain. For the future, what this means is more attention has to be given to the manner in which organizations count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in situations in which demand can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but additionally to boost market shares where competitors miss options. This particular challenge isn’t new, though it has additionally been underexposed in this specific crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the monetary impact of a crisis also relies on the way cooperation in the chain is set up. It’s usually unclear exactly how extra expenses (and benefits) are sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain functions are actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally change the traditional considerations between logistics and creation on the one hand and marketing on the other hand, the future will need to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?