Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the world. Economic indicators and health have been compromised and all industries have been touched within one way or perhaps yet another. Among the industries in which this was clearly visible would be the farming and food industry.
In 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality industry 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 significant consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to a lot of individuals that there was a great impact at the tail end of this chain (e.g., hoarding around supermarkets, restaurants closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), there are many actors within the source chain for that the impact is much less clear. It is therefore important to find out how well the food supply chain as a whole is actually armed to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic all over the food resources chain. They based their examination on interviews with about 30 Dutch source chain actors.
Demand within retail up, contained food service down It is evident and well known that demand in the foodservice channels went down on account of the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service industry thus fell to aproximatelly twenty % of the initial volume. Being a complication, demand in the list channels went up and remained at a quality of about 10 20 % higher than before the crisis began.
Products that had to come through abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic was necessary for wearing in buyer packaging. As much more of this particular product packaging material ended up in consumers’ homes instead of in restaurants, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a significant affect on output activities. In certain cases, this even meant a full stop in output (e.g. inside the duck farming business, which came to a standstill as a result of demand fall out in the foodservice sector). In other instances, a significant portion 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 start of the Corona crisis of China sparked the flow of sea containers to slow down pretty shortly in 2020. This resulted in restricted transport capacity during the very first weeks of the crisis, and expenses that are high for container transport as a result. Truck transport faced different issues. At first, there were uncertainties regarding how transport will be managed for borders, which in the long run were not as rigid as feared. What was problematic in instances that are many , nevertheless, was the accessibility of motorists.
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 elements of supply chain resilience:
Using this particular framework for the assessment of the interviews, the results show that not many businesses were well prepared for the corona crisis and in reality mostly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best methods for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as flexibility. This appears particularly complicated for small companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capacity to do so.
Second, it was found that more interest was required on spreading danger as well as aiming for risk reduction in the supply chain. For the future, what this means is far more attention has to be provided to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases in which demand can’t be met. Explicit prioritization is actually necessary to continue to satisfy market expectations but additionally to boost market shares where competitors miss options. This particular task isn’t new, but it’s also been underexposed in this problems and was usually not a part of preparatory pursuits.
Fourthly, the corona crisis shows us that the monetary effect of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It is usually unclear how further costs (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally replace the classic discussions between logistics and production on the one hand as well as advertising and marketing on the other hand, the potential future must explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?