Supply chain – The COVID-19 pandemic has definitely had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been completely touched inside one way or yet another. One of the industries in which this was clearly visible is the farming as well as food business.
In 2019, the Dutch agriculture and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy as well as food security as lots of stakeholders are affected. Even though it was apparent to most people that there was a huge impact at the conclusion of this chain (e.g., hoarding doing food markets, restaurants closing) as well as at the beginning of this chain (e.g., harvested potatoes not finding customers), there are many actors in the supply chain for which the impact is less clear. It’s therefore important to find out how well the food supply chain as being a whole is actually prepared to deal with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID 19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It is obvious and well known that need in the foodservice channels went down due to the closure of joints, amongst others. In certain instances, sales for suppliers of the food service industry thus fell to aproximatelly twenty % of the initial volume. As a side effect, demand in the list channels went up and remained at a level of about 10 20 % higher than before the problems started.
Products which had to come from abroad had the own issues of theirs. With the change in need from foodservice to retail, the requirement for packaging improved dramatically, More tin, cup or plastic material was needed for wearing in consumer packaging. As much more of this packaging material concluded up in consumers’ houses instead of in places, the cardboard recycling system got disrupted also, causing shortages.
The shifts in demand have had a major effect on output activities. In certain cases, this even meant a complete stop in production (e.g. inside the duck farming industry, which emerged to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China triggered the flow of sea bins to slow down pretty soon in 2020. This resulted in restricted transport electrical capacity during the earliest weeks of the problems, and high expenses for container transport as a consequence. Truck transportation faced various issues. Initially, there were uncertainties regarding how transport would be managed at borders, which in the end weren’t as rigid as feared. What was problematic in many situations, however, was the accessibility of drivers.
The response to COVID-19 – provide chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of this core elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results indicate that few organizations had been nicely prepared for the corona problems and actually mostly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to create the supply chain for agility as well as versatility. This looks especially challenging for smaller sized companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations often do not have the capacity to do it.
Second, it was discovered that more attention was necessary on spreading danger and also aiming for risk reduction within the supply chain. For the future, this means more attention has to be given to the manner in which businesses count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing techniques in situations where demand can’t be met. Explicit prioritization is needed to continue to meet market expectations but also to improve market shares wherein competitors miss options. This challenge is not new, though it has in addition been underexposed in this problems and was frequently not a part of preparatory activities.
Fourthly, the corona problems shows us that the economic effect of a crisis in addition depends on the way cooperation in the chain is set up. It’s often unclear how additional costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain capabilities are actually in the driving accommodate during a crisis. Product development and advertising activities need to go hand in hand with supply chain events. Whether the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand and advertising on the other hand, the long term must explain to.
How’s the Dutch food supply chain coping during the corona crisis?