Supply chain – The COVID-19 pandemic has definitely had its impact influence on the planet. Economic indicators and health have been affected and all industries have been touched within one of the ways or yet another. One of the industries in which it was clearly apparent is the agriculture as well as food industry.
In 2019, the Dutch farming as well as food sector contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 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 enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy and food security as lots of stakeholders are affected. Though it was clear to majority of men and women that there was a huge effect at the end of this chain (e.g., hoarding around food markets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for which the effect is less clear. It’s therefore imperative that you figure out how well the food supply chain as a whole is armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Need in retail up, found food service down It is obvious and popular that demand in the foodservice channels went down as a result of the closure of joints, amongst others. In certain cases, sales for vendors in the food service industry as a result fell to about twenty % of the initial volume. Being an adverse reaction, demand in the list stations went up and remained at a level of aproximatelly 10-20 % greater than before the problems began.
Goods that had to come via abroad had the own problems of theirs. With the change in desire from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic material was required for wearing in consumer packaging. As more of this particular packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in demand have had a big impact on output activities. In certain cases, this even meant the full stop of production (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall-out on the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in restricted transport electrical capacity throughout the first weeks of the crisis, and expenses that are high for container transport as a result. Truck travel experienced different problems. At first, there were uncertainties about how transport will be handled at borders, which in the end weren’t as rigid as feared. What was problematic in a large number of instances, however, was the accessibility of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of this main components of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results indicate that not many companies were well prepared for the corona problems and in reality mainly applied responsive practices. The most notable supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
To begin with, the need to design the supply chain for agility and flexibility. This appears especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capacity to do so.
Second, it was observed that more attention was necessary on spreading risk and also aiming for risk reduction within the supply chain. For the future, what this means is far more attention has to be given to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and intelligent rationing techniques in situations where demand cannot be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to increase market shares wherein competitors miss options. This task isn’t new, however, it has also been underexposed in this problems and was frequently not a component of preparatory activities.
Fourthly, the corona problems shows us that the financial effect of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It’s typically unclear precisely how extra costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain works are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain events. Whether the corona pandemic will structurally replace the traditional considerations between logistics and generation on the one hand as well as marketing and advertising on the other, the long term must explain to.
How is the Dutch foods supply chain coping during the corona crisis?