Supply chain – The COVID-19 pandemic has certainly had its impact influence on the world. health and Economic indicators have been affected and all industries have been touched inside a way or another. One of the industries in which this was clearly visible would be the agriculture as well as food industry.
In 2019, the Dutch agriculture as well as food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy and food security as many stakeholders are affected. Though it was clear to majority of men and women that there was a significant effect at the end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the start of the chain (e.g., harvested potatoes not finding customers), there are numerous actors within the source chain for that the impact is less clear. It is thus important to find out how effectively the food supply chain as being a whole is armed to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Need within retail up, that is found food service down It is evident and popular that need in the foodservice stations went down as a result of the closure of joints, amongst others. In some instances, sales for suppliers in the food service business thus fell to about twenty % of the first volume. Being a complication, demand in the list channels went up and remained within a level of about 10-20 % greater than before the crisis started.
Products that had to come through abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the demand for packaging changed dramatically, More tin, cup or plastic material was needed for wearing in consumer packaging. As much more of this product packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a significant effect on output activities. In certain cases, this even meant a total stop in production (e.g. inside the duck farming business, 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. in the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down pretty shortly in 2020. This resulted in transport capacity that is limited during the earliest weeks of the crisis, and expenses that are high for container transport as a direct result. Truck transport encountered different issues. To begin with, there were uncertainties on how transport would be handled for borders, which in the end were not as rigid as feared. That which was problematic in instances which are many, however, was the accessibility of drivers.
The reaction to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the primary components of supply chain resilience:
To us this framework for the analysis of the interviews, the results indicate that not many organizations had been nicely prepared for the corona problems and in fact mostly applied responsive practices. The most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This seems especially complicated for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often don’t have the capability to do it.
Next, it was observed that much more attention was necessary on spreading threat and aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be made available to the manner in which businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and smart rationing strategies in situations where need can’t be met. Explicit prioritization is needed to keep on to meet market expectations but also to improve market shares in which competitors miss options. This challenge is not new, but it’s additionally been underexposed in this specific problems and was often not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial impact of a crisis additionally depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear precisely how additional costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally change the traditional considerations between logistics and creation on the one hand as well as advertising on the other, the long term will have to tell.
How’s the Dutch food supply chain coping throughout the corona crisis?