Supply chain – The COVID-19 pandemic has certainly had the impact of its impact on the world. Economic indicators and health have been compromised and all industries have been touched inside one way or some other. Among the industries in which it was clearly noticeable would be the agriculture as well as food industry.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced 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. Though it was clear to most individuals that there was a huge impact at the conclusion of the chain (e.g., hoarding around grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the supply chain for which the impact is much less clear. It’s therefore vital that you find out how properly the food supply chain as a whole is prepared to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need within retail up, in food service down It is obvious and well known that need in the foodservice channels went down due to the closure of joints, amongst others. In a few instances, sales for suppliers of the food service business thus fell to about 20 % of the initial volume. Being a complication, demand in the list stations went up and remained at a quality of about 10 20 % higher than before the problems started.
Products which had to come through abroad had the own issues of theirs. With the change in demand from foodservice to retail, the need for packaging changed dramatically, More tin, cup or plastic material was needed for use in consumer packaging. As more of this product packaging material concluded up in consumers’ homes instead of in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had an important affect on production activities. In a few cases, this even meant a complete stop of output (e.g. inside the duck farming industry, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability that is limited throughout the earliest weeks of the crisis, and costs which are high for container transport as a direct result. Truck travel faced different problems. At first, there were uncertainties regarding how transport would be managed for borders, which in the long run were not as rigid as feared. That which was problematic in most cases, nevertheless, was the accessibility of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was used on the overview of the primary elements of supply chain resilience:
To us this particular framework for the analysis of the interviews, the results show that few companies were nicely prepared for the corona problems and in reality mostly applied responsive practices. The most notable source chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for agility as well as flexibility. This seems especially complicated for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to do so.
Second, it was discovered that more interest was required on spreading danger and aiming for risk reduction inside the supply chain. For the future, meaning more attention ought to be given to the way organizations count on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in cases in which demand can’t be met. Explicit prioritization is needed to keep on to satisfy market expectations but in addition to improve market shares in which competitors miss options. This particular challenge is not new, although it’s also been underexposed in this specific crisis and was usually not part of preparatory activities.
Fourthly, the corona problems shows you us that the economic result of a crisis also depends on the manner in which cooperation in the chain is set up. It is usually unclear how additional expenses (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain operates are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally change the traditional considerations between logistics and creation on the one hand and marketing and advertising on the other hand, the long term will need to explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?