Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been compromised and all industries have been touched inside one way or even yet another. One of the industries in which it was clearly noticeable would be the agriculture and food industry.
In 2019, the Dutch farming and food sector contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Though it was apparent to majority of people that there was a significant impact at the conclusion of this chain (e.g., hoarding in supermarkets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the supply chain for that the effect is much less clear. It is therefore important to find out how effectively 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 Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food resources chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Demand in retail up, in 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 a few cases, sales for vendors in the food service industry thus fell to aproximatelly 20 % of the original volume. As a side effect, demand in the retail stations went up and remained at a level of aproximatelly 10-20 % greater than before the problems started.
Goods that had to come from abroad had their very own problems. With the shift in desire from foodservice to retail, the requirement for packaging changed dramatically, More tin, glass and plastic material was necessary for use in buyer packaging. As much more of this product packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a big effect on output activities. In certain instances, this even meant a total stop of output (e.g. inside the duck farming industry, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in restricted transport capability throughout the very first weeks of the issues, and high expenses for container transport as a consequence. Truck transport encountered different problems. At first, there were uncertainties on how transport would be managed for borders, which in the long run were not as stringent as feared. What was problematic in many situations, nevertheless, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the core things of supply chain resilience:
To us this particular framework for the evaluation of the interview, the conclusions indicate that not many organizations had been well prepared for the corona problems and actually mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
For starters, the need to design the supply chain for flexibility and agility. This appears particularly challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to do so.
Second, it was found that more attention was needed on spreading danger as well as aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be provided to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as smart rationing techniques in situations where demand cannot be met. Explicit prioritization is actually necessary to keep on to meet market expectations but in addition to improve market shares where competitors miss opportunities. This particular task isn’t new, however, it has in addition been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona problems shows us that the monetary impact of a crisis also depends on the way cooperation in the chain is actually set up. It is typically unclear exactly how further expenses (and benefits) are sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain functionality are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally change the traditional considerations between logistics and creation on the one hand as well as marketing and advertising on the other, the potential future will need to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?