Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the planet. health and Economic indicators have been compromised and all industries are touched within one of the ways or yet another. One of the industries in which it was clearly obvious is the agriculture as well as food industry.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to numerous people that there was a big effect at the end of the chain (e.g., hoarding doing food markets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for that will the effect is much less clear. It’s thus vital that you find out how well the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers from your 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 throughout the food resources chain. They based their analysis on interviews with about 30 Dutch source chain actors.
Need within retail up, found food service down It is obvious and widely known that demand in the foodservice stations went down as a result of the closure of joints, amongst others. In a few instances, sales for suppliers of the food service industry as a result fell to aproximatelly twenty % of the initial volume. As a side effect, demand in the retail channels went up and remained at a quality of about 10-20 % higher than before the crisis started.
Goods that had to come from abroad had the own issues of theirs. With the shift in desire coming from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic material was necessary for wearing in customer packaging. As much more of this product packaging material ended up in consumers’ houses rather than in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a significant affect on output activities. In a few cases, this even meant a full stop of output (e.g. in the duck farming industry, which came to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in transport electrical capacity which is limited during the earliest weeks of the issues, and costs which are high for container transport as a result. Truck transport faced different issues. At first, there were uncertainties about how transport will be handled for borders, which in the long run were not as stringent as feared. That which was problematic in many instances, nonetheless, was the availability of motorists.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of the key elements of supply chain resilience:
To us this framework for the assessment of the interviews, the findings indicate that few organizations 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. Eight best practices for food supply chain resilience
To begin with, the need to design the supply chain for agility and flexibility. This appears especially complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the capability to do it.
Next, it was discovered that much more attention was required on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means far more attention ought to be given to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as intelligent rationing strategies in situations in which demand cannot be met. Explicit prioritization is needed to keep on to meet market expectations but also to boost market shares in which competitors miss opportunities. This particular challenge is not new, but it has in addition been underexposed in this specific problems and was usually not a component of preparatory pursuits.
Fourthly, the corona issues shows us that the financial effect of a crisis also relies on the way cooperation in the chain is set up. It is typically unclear precisely how extra costs (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other functional departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally change the classic discussions between logistics and creation on the one hand and advertising on the other, the long term will have to explain to.
How’s the Dutch food supply chain coping throughout the corona crisis?