Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the planet. Economic indicators and health have been compromised and all industries have been completely touched in a way or another. Among the industries in which this was clearly visible will be the farming and food industry.
In 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are affected. Though it was apparent to many individuals that there was a big impact at the conclusion of this chain (e.g., hoarding doing food markets, eateries closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors within the source chain for that will the impact is less clear. It’s therefore imperative that you determine how properly the food supply chain as a whole is prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based their analysis on interviews with about 30 Dutch supply chain actors.
Need in retail up, contained food service down It’s obvious and well known that demand in the foodservice stations went down due to the closure of joints, amongst others. In some cases, sales for vendors in the food service business thus fell to about 20 % of the first volume. As a side effect, demand in the retail stations went up and remained at a degree of about 10-20 % higher than before the problems started.
Products that had to come through abroad had their own issues. With the shift in demand from foodservice to retail, the requirement for packaging changed dramatically, More tin, cup or plastic was needed for use in consumer packaging. As much more of this product packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had an important effect on output activities. In certain cases, this even meant a complete stop of output (e.g. inside the duck farming business, which came to a standstill due to demand fall-out in the foodservice sector). In other situations, a big section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability which is restricted throughout the very first weeks of the problems, and costs which are high for container transport as a result. Truck transportation encountered different issues. At first, there were uncertainties about how transport would be managed at borders, which in the end weren’t as stringent as feared. The thing that was problematic in cases which are a large number of, nonetheless, was the accessibility of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of this key elements of supply chain resilience:
Using this particular framework for the analysis of the interviews, the conclusions indicate that few businesses had been nicely prepared for the corona crisis and actually mainly applied responsive methods. Probably the most important supply chain lessons were:
Figure one. Eight best practices for meals supply chain resilience
First, the need to create the supply chain for agility and 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 do not have the capability to do it.
Next, it was discovered that much more interest was needed on spreading threat and also aiming for risk reduction in the supply chain. For the future, meaning far more attention ought to be made available to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and smart rationing strategies in situations in which need cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but also to improve market shares wherein competitors miss options. This particular task isn’t new, however, it has in addition been underexposed in this specific crisis and was frequently not part of preparatory activities.
Fourthly, the corona crisis teaches us that the monetary effect of a crisis also relies on the manner in which cooperation in the chain is actually set up. It’s often unclear precisely how additional expenses (and benefits) are actually distributed in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain capabilities are actually in the driving seat during a crisis. Product development and marketing and advertising activities have to go hand deeply in 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 hand, the potential future will need to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?