Supply chain – The COVID-19 pandemic has definitely had the impact of its influence on the planet. Economic indicators and health have been compromised and all industries have been touched inside one way or yet another. Among the industries in which it was clearly obvious would be the farming and food business.
Throughout 2019, the Dutch extension and food industry contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to 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 identical time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy and food security as lots of stakeholders are affected. Even though it was clear to most individuals that there was a great effect at the end of this chain (e.g., hoarding in grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the supply chain for that the impact is much less clear. It is thus vital that you figure out how well the food supply chain as being a whole is armed to cope with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University as well as 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 their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, found food service down It’s apparent and popular that demand in the foodservice channels went down on account of the closure of joints, amongst others. In some instances, sales for vendors of the food service industry as a result fell to aproximatelly 20 % of the first volume. As an adverse reaction, demand in the retail stations went up and remained within a degree of aproximatelly 10-20 % higher than before the problems started.
Goods that had to come via abroad had the own problems of theirs. With the shift in desire from foodservice to retail, the demand for packaging improved considerably, More tin, cup or plastic material was needed for wearing in customer packaging. As more of this packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had an important effect on production activities. In some cases, this even meant a complete stop in output (e.g. within the duck farming business, which emerged to a standstill due to demand fall out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea canisters to slow down pretty soon in 2020. This resulted in restricted transport electrical capacity throughout the earliest weeks of the crisis, and costs which are high for container transport as a result. Truck transport experienced various issues. Initially, there were uncertainties regarding how transport will be managed for borders, which in the end weren’t as strict as feared. The thing that was problematic in situations that are most , however, was the accessibility of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the main elements of supply chain resilience:
To us this particular framework for the analysis of the interviews, the conclusions show that few companies had been well prepared for the corona problems and in reality mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for flexibility as well as agility. This looks especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often don’t have the capacity to do so.
Next, it was discovered that more interest was required on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means far more attention should be made available to the way companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in situations where demand can’t be met. Explicit prioritization is required to keep on to meet market expectations but in addition to boost market shares wherein competitors miss options. This particular task is not new, however, it has also been underexposed in this crisis and was frequently not a part of preparatory pursuits.
Fourthly, the corona crisis shows us that the financial effect of a crisis also relies on the way cooperation in the chain is actually set up. It’s typically unclear precisely how further costs (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain characteristics are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the classic discussions between logistics and production on the one hand as well as marketing and advertising on the other, the future will need to tell.
How’s the Dutch food supply chain coping during the corona crisis?