Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the planet. Economic indicators and health have been affected and all industries have been touched in one way or perhaps yet another. Among the industries in which it was clearly noticeable is the farming as well as food industry.
In 2019, the Dutch agriculture and food sector contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was apparent to majority of people that there was a huge impact at the conclusion of the chain (e.g., hoarding doing food markets, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the source chain for that will the impact is less clear. It’s therefore imperative that you determine how properly the food supply chain as a whole is equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food supplies chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Need within retail up, contained food service down It is obvious and popular that need in the foodservice stations went down due to the closure of joints, amongst others. In a few cases, sales for vendors in the food service industry therefore fell to aproximatelly twenty % of the initial volume. As an adverse reaction, demand in the retail channels went up and remained at a quality of about 10-20 % greater than before the crisis started.
Products which had to come via abroad had their own problems. With the shift in need coming from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic was necessary for use in customer packaging. As more of this particular packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a major effect on output activities. In a few instances, this even meant the full stop in output (e.g. inside the duck farming industry, which arrived to a standstill as a result of demand fall-out inside the foodservice sector). In other cases, a big part of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport electrical capacity that is restricted during the very first weeks of the issues, and high costs for container transport as a result. Truck travel experienced various issues. At first, there were uncertainties about how transport would be managed at borders, which in the end weren’t as stringent as feared. That which was problematic in situations that are many , nonetheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of the main things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the results indicate that few organizations were nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. Eight best practices for meals supply chain resilience
For starters, the need to develop the supply chain for agility and flexibility. This looks especially complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capability to do so.
Second, it was discovered that more interest was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, what this means is more attention should be made available to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and smart rationing techniques in cases in which demand cannot be met. Explicit prioritization is needed to continue to satisfy market expectations but additionally to improve market shares wherein competitors miss opportunities. This challenge is not new, though it’s also been underexposed in this crisis and was often not a part of preparatory activities.
Fourthly, the corona crisis shows us that the financial impact of a crisis in addition depends on the way cooperation in the chain is actually set up. It is typically unclear how additional expenses (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain functions are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally switch the traditional considerations between creation and logistics on the one hand and marketing and advertising on the other, the future will need to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?