Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the planet. Economic indicators and health have been compromised and all industries have been completely touched inside a way or yet another. One of the industries in which this was clearly apparent will be the agriculture and food industry.
Throughout 2019, the Dutch extension and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as many stakeholders are affected. Despite the fact that it was clear to a lot of men and women that there was a huge impact at the conclusion of the chain (e.g., hoarding doing grocery stores, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are a lot of actors inside the supply chain for which the effect is much less clear. It is therefore imperative that you determine how well the food supply chain as being a whole is actually equipped to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supplies chain. They based their analysis on interviews with around 30 Dutch supply chain actors.
Need within retail up, found food service down It is evident and widely known that need in the foodservice stations went down as a result of the closure of places, amongst others. In some cases, sales for suppliers of the food service business thus fell to about 20 % of the original volume. As a complication, demand in the list channels went up and remained within a level of aproximatelly 10-20 % greater than before the problems began.
Products which had to come via abroad had their own problems. With the shift in need from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic material was necessary for use in consumer packaging. As much more of this packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in need have had a significant affect on production activities. In a few instances, this even meant a total stop of production (e.g. within the duck farming industry, which arrived to a standstill due to demand fall-out inside the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down fairly soon in 2020. This resulted in limited transport capacity during the very first weeks of the issues, and high expenses for container transport as a direct result. Truck travel encountered various problems. Initially, there were uncertainties regarding how transport would be managed at borders, which in the long run weren’t as stringent as feared. That which was problematic in situations that are many , however, was the accessibility of motorists.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of the main elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the conclusions indicate that not many companies were well prepared for the corona crisis and actually mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
For starters, the need to develop the supply chain for agility as well as versatility. This looks particularly complicated for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the capacity to do it.
Second, it was discovered that much more attention was needed on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning far more attention ought to be given to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization and clever rationing strategies in situations in which need cannot be met. Explicit prioritization is required to continue to meet market expectations but additionally to increase market shares in which competitors miss opportunities. This challenge isn’t new, although it’s additionally been underexposed in this specific crisis and was frequently not a component of preparatory pursuits.
Fourthly, the corona problems shows you us that the monetary result of a crisis also is determined by the manner in which cooperation in the chain is actually set up. It’s typically unclear exactly how further expenses (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain works are in the driving accommodate during a crisis. Product development and marketing activities have to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand as well as marketing on the other, the long term will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?