Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. health and Economic indicators have been affected and all industries have been touched in one way or even another. Among the industries in which this was clearly apparent would be the farming and food industry.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the disgusting domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 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 the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as lots of stakeholders are affected. Though it was clear to a lot of folks that there was a significant effect at the end of the chain (e.g., hoarding in supermarkets, eateries closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for that will the effect is much less clear. It is therefore important to determine how effectively the food supply chain as a whole is actually equipped to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with around thirty Dutch source chain actors.
Demand in retail up, in food service down It’s evident and well known that need in the foodservice stations went down due to the closure of places, amongst others. In some instances, sales for vendors of the food service industry therefore fell to about twenty % of the initial volume. As a side effect, demand in the list channels went up and remained at a level of about 10-20 % higher than before the problems started.
Products which had to come via abroad had the own issues of theirs. With the change in desire coming from foodservice to retail, the demand for packaging improved dramatically, More tin, glass or plastic was needed for use in customer packaging. As much more of this particular product packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a big effect on production activities. In some instances, this even meant a full stop in production (e.g. inside the duck farming business, which arrived to a standstill on account of demand fall-out in the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the crisis, and costs which are high for container transport as a consequence. Truck transport experienced various issues. At first, there were uncertainties about how transport would be handled at borders, which in the end were not as strict as feared. The thing that was problematic in most instances, however, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this primary things of supply chain resilience:
To us this framework for the assessment of the interview, the results indicate that not many companies had been nicely prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
First, the need to develop the supply chain for flexibility as well as agility. This looks particularly complicated for small companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capacity to accomplish that.
Second, it was found that more interest was needed on spreading threat and also aiming for risk reduction in the supply chain. For the future, what this means is more attention should be given to the manner in which businesses rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as clever rationing techniques in situations in which need cannot be met. Explicit prioritization is needed to continue to meet market expectations but in addition to boost market shares wherein competitors miss opportunities. This particular task is not new, though it has also been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona crisis shows you us that the monetary effect of a crisis also relies on the way cooperation in the chain is actually set up. It’s usually unclear precisely how additional expenses (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain operates are in the driving seat during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Whether or not the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand as well as marketing and advertising on the other hand, the long term must tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?