Supply chain – The COVID-19 pandemic has certainly had its impact effect on the planet. health and Economic indicators have been affected and all industries have been touched in one of the ways or another. One of the industries in which this was clearly visible would be the farming and food industry.
In 2019, the Dutch farming as well as food niche contributed 6.4 % to the gross domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 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 a lot of stakeholders are affected. Despite the fact that it was clear to most individuals that there was a huge impact at the tail end of the chain (e.g., hoarding around supermarkets, eateries closing) as well as at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are many actors within the supply chain for which the impact is less clear. It is therefore imperative that you find out how effectively the food supply chain as being a whole is equipped to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supplies chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Need within retail up, in food service down It’s obvious and well known that need in the foodservice channels went down on account of the closure of places, amongst others. In certain cases, sales for vendors in the food service business thus fell to about twenty % of the initial volume. Being an adverse reaction, demand in the list channels went up and remained at a level of aproximatelly 10-20 % greater than before the problems started.
Goods that had to come via abroad had their own issues. With the change in need from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic material was necessary for wearing in consumer packaging. As much more of this particular product packaging material ended up in consumers’ homes as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a significant affect on production activities. In a few cases, this even meant a total stop in production (e.g. within the duck farming business, which emerged to a standstill as a result of demand fall-out inside the foodservice sector). In other cases, a significant section of the personnel contracted corona (e.g. in the various meats processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea containers to slow down fairly shortly in 2020. This resulted in limited transport capacity throughout the earliest weeks of the issues, and high expenses for container transport as a result. Truck travel encountered different problems. At first, there were uncertainties regarding how transport would be managed for borders, which in the long run weren’t as rigid as feared. The thing that was problematic in situations that are a large number of , however, was the accessibility of motorists.
The response to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of this core things of supply chain resilience:
To us this framework for the evaluation of the interview, the findings indicate that not many businesses were well prepared for the corona crisis and in reality mainly applied responsive methods. 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 flexibility and agility. This seems particularly challenging for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often don’t have the potential to accomplish that.
Next, it was found that much more interest was needed on spreading risk and aiming for risk reduction in the supply chain. For the future, what this means is more attention should be made available to the way companies depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in situations in which need can’t be met. Explicit prioritization is required to keep on to satisfy market expectations but additionally to increase market shares where competitors miss opportunities. This challenge isn’t new, but it has also been underexposed in this specific problems and was often not a component of preparatory pursuits.
Fourthly, the corona issues teaches us that the monetary impact of a crisis also depends on the way cooperation in the chain is set up. It is 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 functional departments, the businesses and supply chain functions are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the classic discussions between generation and logistics on the one hand as well as advertising and marketing on the other hand, the potential future will need to tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?