Supply chain – The COVID 19 pandemic has certainly had its impact impact on the world. Economic indicators and health have been affected and all industries have been completely touched within one of the ways or even another. One of the industries in which this was clearly noticeable is the agriculture and food business.
Throughout 2019, the Dutch farming as well as food sector contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as a lot of stakeholders are affected. Even though it was clear to numerous folks that there was a big effect at the end of the chain (e.g., hoarding around food markets, restaurants closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), there are many actors in the supply chain for that the impact is less clear. It’s therefore important to find out how properly the food supply chain as a whole is actually equipped to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with about 30 Dutch source chain actors.
Need in retail up, found food service down It is apparent and popular that demand in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for vendors of the food service business thus fell to aproximatelly twenty % of the initial volume. As a complication, demand in the retail stations went up and remained at a quality of about 10-20 % greater than before the crisis began.
Products that had to come from abroad had their own issues. With the shift in need coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic was required for wearing in consumer packaging. As more of this product packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had an important effect on output activities. In a few instances, this even meant a total stop in production (e.g. within the duck farming business, which emerged to a standstill on account of demand fall out in the foodservice sector). In other cases, a major part of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China triggered the flow of sea bins to slow down pretty soon in 2020. This resulted in transport capacity that is limited during the first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transportation faced various issues. To begin with, there were uncertainties on how transport will be handled for borders, which in the end were not as rigid as feared. That which was problematic in many instances, however, was the availability of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core things of supply chain resilience:
Using this framework for the evaluation of the interview, the conclusions show that few companies had been nicely prepared for the corona crisis and in fact mainly applied responsive methods. The most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to create the supply chain for versatility and agility. This seems especially challenging for small companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations oftentimes do not have the potential to do so.
Second, it was found that much more interest was necessary on spreading threat as well as aiming for risk reduction in the supply chain. For the future, what this means is more attention should 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 intelligent rationing techniques in cases where need cannot be met. Explicit prioritization is required to keep on to satisfy market expectations but in addition to boost market shares in which competitors miss opportunities. This task isn’t new, however, it has also been underexposed in this specific problems and was often not part of preparatory pursuits.
Fourthly, the corona issues shows us that the monetary impact of a crisis in addition depends on the way cooperation in the chain is set up. It’s usually unclear exactly how further costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the traditional discussions between logistics and creation on the one hand as well as marketing and advertising on the other hand, the potential future will have to explain to.
How is the Dutch food supply chain coping during the corona crisis?