Supply chain – The COVID-19 pandemic has definitely had the impact of its influence on the world. Economic indicators and health have been affected and all industries are touched inside a way or yet another. One of the industries in which it was clearly visible will be 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). According to the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as lots of stakeholders are impacted. Despite the fact that it was apparent to numerous individuals that there was a significant effect at the tail end of this chain (e.g., hoarding around grocery stores, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for that the effect is less clear. It is therefore important to determine how properly the food supply chain as a whole is actually prepared to contend 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 consequences of the COVID-19 pandemic throughout the food supply chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Need in retail up, that is found food service down It is evident and popular that need in the foodservice stations went down as a result of the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service business as a result fell to about twenty % of the initial volume. Being a complication, demand in the retail channels 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 shift in desire from foodservice to retail, the requirement for packaging improved considerably, More tin, cup or plastic was needed for wearing in buyer packaging. As more of this particular product packaging material concluded up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a major effect on production activities. In certain instances, this even meant a total stop in output (e.g. in the duck farming industry, which arrived to a standstill on account of demand fall-out on the foodservice sector). In other instances, a big portion of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity throughout the first weeks of the problems, and costs which are high for container transport as a direct result. Truck transportation encountered different problems. To begin with, there were uncertainties on how transport will be handled for borders, which in the end were not as rigid as feared. The thing that was problematic in many instances, however, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was used on the overview of this main things of supply chain resilience:
Using this framework for the evaluation of the interviews, the findings indicate that not many organizations had been nicely prepared for the corona problems and in fact mainly applied responsive practices. The most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to develop the supply chain for flexibility and agility. This appears particularly challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to accomplish that.
Next, it was found that much more attention was needed on spreading danger and also aiming for risk reduction in the supply chain. For the future, what this means is far more attention ought to be provided to the way organizations rely on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing techniques in situations where need cannot be met. Explicit prioritization is actually necessary to keep on to satisfy market expectations but in addition to boost market shares wherein competitors miss opportunities. This particular task isn’t new, although it has additionally been underexposed in this problems and was frequently not part of preparatory pursuits.
Fourthly, the corona problems teaches us that the monetary effect of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It’s typically unclear exactly how additional costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the traditional considerations between creation and logistics on the one hand as well as advertising and marketing on the other, the future will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?