Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the world. Economic indicators and health have been compromised and all industries have been completely touched in a way or another. Among the industries in which it was clearly noticeable would be the farming as well as food business.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the disgusting domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as many stakeholders are impacted. Despite the fact that it was clear to numerous people that there was a huge effect at the tail end of this chain (e.g., hoarding in grocery stores, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors within the supply chain for which the impact is less clear. It is therefore vital that you figure out how properly the food supply chain as being a whole is actually equipped to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University as well as coming 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 around 30 Dutch source chain actors.
Need within retail up, that is found food service down It is obvious and well known that need in the foodservice stations went down as a result of the closure of restaurants, amongst others. In certain instances, sales for suppliers of the food service business as a result fell to aproximatelly twenty % of the original volume. As a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % greater than before the crisis started.
Products which had to come from abroad had their very own problems. With the shift in desire coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic material was necessary for use in buyer packaging. As 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 desire have had a significant effect on production activities. In certain cases, this even meant a complete stop of output (e.g. in the duck farming industry, 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 meat processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in transport capability that is restricted throughout the first weeks of the crisis, and costs that are high for container transport as a direct result. Truck transportation faced different issues. At first, there were uncertainties on how transport would be managed for borders, which in the long run weren’t as strict as feared. What was problematic in instances which are many, nonetheless, was the availability of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this key elements of supply chain resilience:
To us this framework for the evaluation of the interviews, the findings indicate that not many companies were nicely prepared for the corona problems and actually mainly applied responsive practices. The most notable supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
To begin with, the need to create the supply chain for flexibility as well as agility. This looks especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes don’t have the capability to accomplish that.
Second, it was observed that much more attention was needed on spreading risk and aiming for risk reduction inside the supply chain. For the future, this means far more attention should be given to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as intelligent rationing strategies in cases in which need cannot be met. Explicit prioritization is required to keep on to meet market expectations but also to increase market shares in which competitors miss opportunities. This task isn’t new, although it’s also been underexposed in this specific crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona crisis shows us that the monetary impact of a crisis in addition depends on the way cooperation in the chain is set up. It is typically unclear how extra costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the businesses and supply chain functionality are 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 traditional considerations between creation and logistics on the one hand and marketing and advertising on the other, the long term will have to explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?