Supply chain – The COVID 19 pandemic has undoubtedly had its impact impact on the planet. Economic indicators and health have been affected and all industries are touched within a way or another. Among the industries in which it was clearly noticeable would be the farming and food business.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover 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 lots of stakeholders are affected. Despite the fact that it was clear to a lot of individuals that there was a significant effect at the end of the chain (e.g., hoarding doing food markets, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors in the source chain for that will the impact is less clear. It is thus important to find out how effectively the food supply chain as a whole is actually equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID 19 pandemic throughout the food resources chain. They based their analysis on interviews with around 30 Dutch source chain actors.
Need in retail up, in food service down It’s apparent and widely known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In a few instances, sales for suppliers of the food service industry as a result fell to aproximatelly 20 % of the original volume. As a complication, demand in the list stations went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come from abroad had their very own problems. With the shift in demand coming from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was needed for wearing in consumer packaging. As much more of this product packaging material ended up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in need have had a major impact on output activities. In certain cases, this even meant a complete stop in production (e.g. within the duck farming business, which came to a standstill as a result of demand fall-out inside the foodservice sector). In other situations, a major part of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea containers to slow down pretty shortly in 2020. This resulted in transport capacity which is limited throughout the very first weeks of the issues, and costs which are high for container transport as a result. Truck travel encountered various issues. Initially, there were uncertainties on how transport would be handled for borders, which in the long run were not as stringent as feared. What was problematic in cases that are most , nevertheless, was the availability of motorists.
The response to COVID 19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this primary elements of supply chain resilience:
To us this framework for the evaluation of the interviews, the conclusions indicate that few businesses had been well prepared for the corona crisis and in reality mostly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best methods for food supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This appears particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations usually don’t have the capability to do so.
Next, it was observed that more attention was needed on spreading risk and aiming for risk reduction inside the supply chain. For the future, meaning far more attention should be made available to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing techniques in situations in which demand cannot be met. Explicit prioritization is actually required to keep on to satisfy market expectations but in addition to increase market shares wherein competitors miss options. This particular task isn’t new, although it’s also been underexposed in this specific problems and was usually not part of preparatory pursuits.
Fourthly, the corona problems shows us that the monetary effect of a crisis additionally depends on the way cooperation in the chain is set up. It’s often unclear exactly how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain works are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally change 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?