Supply chain – The COVID 19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been compromised and all industries are touched in one way or perhaps some other. Among the industries in which this was clearly visible would be the agriculture as well as food business.
Throughout 2019, the Dutch agriculture 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 lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was apparent to many people that there was a big impact at the end of this chain (e.g., hoarding doing supermarkets, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), you will find many actors within the source chain for that will the impact is much less clear. It is therefore important to determine how properly the food supply chain as a whole is 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 influences of the COVID 19 pandemic all over the food resources chain. They based the examination of theirs on interviews with around thirty Dutch source chain actors.
Need within retail up, contained food service down It’s evident and widely known that need in the foodservice channels went down on account of the closure of restaurants, amongst others. In some instances, sales for suppliers of the food service industry as a result fell to aproximatelly 20 % of the initial volume. As a complication, demand in the list stations went up and remained at a level of about 10 20 % higher than before the crisis began.
Goods that had to come via abroad had their own problems. With the change in desire from foodservice to retail, the demand for packaging changed considerably, More tin, glass or plastic was necessary for use in consumer packaging. As much more of this particular packaging material concluded up in consumers’ houses rather than in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a major impact on production activities. In certain cases, this even meant the full stop in output (e.g. inside the duck farming industry, which emerged to a standstill due to demand fall out on the foodservice sector). In other instances, a significant part 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 beginning of the Corona crisis of China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capacity that is restricted throughout the first weeks of the problems, and costs which are high for container transport as a direct result. Truck travel faced various issues. Initially, there were uncertainties on how transport will be managed for borders, which in the long run weren’t as rigid as feared. That which was problematic in situations that are a large number of , however, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the key components of supply chain resilience:
To us this particular framework for the assessment of the interview, the conclusions indicate that few organizations were well prepared for the corona crisis and in reality mostly applied responsive practices. Probably the most notable supply chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
To begin with, the need to design the supply chain for flexibility as well as agility. This looks particularly complicated for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often do not have the capability to do it.
Second, it was found that more interest was needed on spreading threat and also aiming for risk reduction inside the supply chain. For the future, meaning more attention has to be given to the way companies depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in situations where demand can’t be met. Explicit prioritization is actually required to keep on to meet market expectations but additionally to improve market shares wherein competitors miss options. This particular task is not new, however, it has also been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona crisis shows you us that the economic effect of a crisis in addition depends on the manner in which cooperation in the chain is set up. It is usually unclear how extra expenses (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the operations and supply chain works are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally replace the classic discussions between logistics and generation on the one hand and advertising on the other, the future must explain to.
How’s the Dutch food supply chain coping during the corona crisis?