Supply chain – The COVID-19 pandemic has definitely had its impact impact on the world. health and Economic indicators have been affected and all industries have been completely touched within a way or perhaps yet another. One of the industries in which it was clearly apparent would be the farming and food industry.
In 2019, the Dutch extension as well as food sector contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Even though it was clear to many individuals that there was a significant impact at the end of this chain (e.g., hoarding doing grocery stores, restaurants closing) as well as at the start of the chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the supply chain for which the impact is much less clear. It is therefore vital that you determine how well the food supply chain as being a whole is actually equipped to deal with disruptions. Researchers from the Operations Research and Logistics Group at Wageningen Faculty and also out of 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 analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand in retail up, found food service down It’s obvious and popular that demand in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some cases, sales for suppliers in the food service business thus fell to about twenty % of the original volume. As a complication, demand in the retail channels went up and remained at a degree of aproximatelly 10 20 % greater than before the problems began.
Products which had to come via abroad had the own issues of theirs. With the change in desire from foodservice to retail, the need for packaging changed dramatically, More tin, glass or plastic material was necessary for use in customer packaging. As more of this particular product packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant affect on output activities. In some cases, this even meant a total stop of production (e.g. in the duck farming industry, which arrived to a standstill on account of demand fall-out inside the foodservice sector). In other instances, a big portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly soon in 2020. This resulted in transport electrical capacity that is limited throughout the first weeks of the issues, and expenses which are high for container transport as a result. Truck travel experienced different problems. Initially, there were uncertainties on how transport will be managed at borders, which in the end weren’t as rigid as feared. That which was problematic in a large number of instances, nonetheless, was the availability of motorists.
The response to COVID-19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the primary components of supply chain resilience:
Using this framework for the evaluation of the interviews, the results show that few companies had been well prepared for the corona problems and actually mostly applied responsive methods. Probably the most notable 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 flexibility. This looks especially challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to do so.
Second, it was discovered that much more attention was required on spreading danger as well as aiming for risk reduction in the supply chain. For the future, this means more attention should be made available to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing strategies in situations where demand cannot be met. Explicit prioritization is necessary to continue to satisfy market expectations but in addition to boost market shares where competitors miss opportunities. This particular challenge is not new, however, it’s also been underexposed in this specific crisis and was often not a component of preparatory pursuits.
Fourthly, the corona problems shows us that the monetary result of a crisis also depends on the way cooperation in the chain is set up. It is typically unclear precisely how further expenses (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the classic considerations between generation and logistics on the one hand and marketing and advertising on the other, the future will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?