Supply chain – The COVID 19 pandemic has definitely had the impact of its influence on the world. Economic indicators and health have been compromised and all industries are touched inside a way or another. Among the industries in which this was clearly apparent is the agriculture and food business.
In 2019, the Dutch agriculture as well as food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion in 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big consequences for the Dutch economy as well as food security as lots of stakeholders are affected. Even though it was clear to majority of individuals that there was a great effect at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) and also 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 that the impact is less clear. It is thus vital that you determine how well the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from your Operations Research and 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 supply chain. They based the examination of theirs on interviews with around 30 Dutch supply chain actors.
Demand within retail up, in food service down It is evident and widely known that demand in the foodservice channels went down on account of the closure of places, amongst others. In a few instances, sales for vendors of the food service business as a result fell to aproximatelly twenty % of the original volume. Being a complication, demand in the list stations went up and remained within a degree of aproximatelly 10-20 % higher than before the problems started.
Products that had to come via abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass and plastic material was necessary for use in consumer packaging. As more of this product packaging material ended up in consumers’ houses as opposed to in restaurants, the cardboard recycling function got disrupted too, causing shortages.
The shifts in need have had a significant effect on production activities. In certain instances, this even meant a complete stop in production (e.g. in the duck farming industry, which arrived to a standstill as a result of demand fall out on the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capacity which is restricted during the first weeks of the problems, and expenses that are high for container transport as a consequence. Truck travel faced various issues. At first, there were uncertainties about how transport would be handled for borders, which in the long run were not as stringent as feared. What was problematic in instances which are most, nevertheless, was the accessibility of motorists.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this main elements of supply chain resilience:
To us this framework for the evaluation of the interview, the conclusions show 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. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for flexibility and agility. This looks especially challenging for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations usually don’t have the potential to do so.
Second, it was observed that more interest was necessary on spreading risk and also aiming for risk reduction in the supply chain. For the future, what this means is more attention ought to be made available to the manner in which organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing techniques in cases in which need cannot be met. Explicit prioritization is actually needed to keep on to meet market expectations but additionally to improve market shares where competitors miss options. This task isn’t new, although it’s also been underexposed in this specific problems and was usually not part of preparatory activities.
Fourthly, the corona crisis teaches us that the monetary result of a crisis also relies on the way cooperation in the chain is actually set up. It is typically unclear exactly how extra expenses (and benefits) are actually distributed in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain capabilities are in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain pursuits. Whether the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand as well as marketing on the other hand, the potential future will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?