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 completely touched within one of the ways or yet another. Among the industries in which it was clearly apparent will be the agriculture as well as food industry.
In 2019, the Dutch extension and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality industry 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 in the food chain have major consequences for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was apparent to majority of people that there was a big effect at the conclusion of the chain (e.g., hoarding doing food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find many actors within the source chain for which the impact is less clear. It is thus vital that you figure out how properly the food supply chain as a whole is equipped to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food supply chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Need in retail up, in food service down It is evident and well known that need in the foodservice channels went down on account of the closure of places, amongst others. In a few instances, sales for vendors of the food service business therefore fell to aproximatelly twenty % of the initial volume. Being a side effect, demand in the list stations went up and remained within a quality of aproximatelly 10 20 % higher than before the problems began.
Goods that had to come via abroad had the own problems of theirs. With the shift in need from foodservice to retail, the demand for packaging improved considerably, More tin, cup and plastic was needed for wearing in buyer packaging. As more of this packaging material concluded up in consumers’ homes as opposed to in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a major affect on production activities. In a few instances, this even meant the full stop of production (e.g. in the duck farming industry, which came to a standstill due to demand fall out in the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China sparked the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the problems, and high expenses for container transport as a result. Truck transportation encountered different problems. Initially, there were uncertainties about how transport will be handled at borders, which in the end weren’t as stringent as feared. What was problematic in many instances, nonetheless, was the availability of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of the primary components of supply chain resilience:
To us this framework for the assessment of the interview, the findings show that few organizations had been nicely prepared for the corona crisis and in fact mainly applied responsive practices. Probably the most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
To begin with, the need to create the supply chain for agility as well as versatility. This seems especially complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capability to accomplish that.
Next, it was found that much more interest was needed on spreading risk and aiming for risk reduction within the supply chain. For the future, what this means is far more attention ought to be provided to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and smart rationing strategies in situations where demand cannot be met. Explicit prioritization is actually needed to continue to meet market expectations but in addition to boost market shares where competitors miss options. This particular challenge is not new, although it’s also been underexposed in this crisis and was usually not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the economic impact of a crisis also relies on the manner in which cooperation in the chain is actually set up. It is typically unclear precisely how further expenses (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain functionality are in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in deep hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional discussions between generation and logistics on the one hand and marketing on the other hand, the long term must explain to.
How is the Dutch food supply chain coping during the corona crisis?