Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the planet. Economic indicators and health have been affected and all industries are touched in one of the ways or perhaps some other. Among the industries in which this was clearly apparent is the farming and food industry.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). As per 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 exactly the same time supermarkets enhanced 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 impacted. Even though it was clear to majority of men and women that there was a great effect at the tail end of this chain (e.g., hoarding in food markets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors in the supply chain for that will the impact is much less clear. It is thus vital that you determine how properly the food supply chain as being a whole is armed to contend with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food resources chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Need in retail up, in food service down It is apparent and popular that demand in the foodservice stations went down on account of the closure of joints, amongst others. In a few cases, sales for vendors in the food service industry thus fell to about twenty % of the original volume. Being a complication, demand in the retail channels went up and remained at a quality of aproximatelly 10 20 % greater than before the crisis started.
Goods that had to come via abroad had their own issues. With the shift in desire from foodservice to retail, the need for packaging changed considerably, More tin, glass or plastic was necessary for use in buyer packaging. As more of this particular packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in desire have had an important impact on output activities. In certain instances, this even meant a complete stop in 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 situations, a big portion of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea containers to slow down fairly shortly in 2020. This resulted in limited transport electrical capacity during the earliest weeks of the crisis, and expenses which are high for container transport as a direct result. Truck transport encountered various problems. Initially, there were uncertainties regarding how transport would be managed at borders, which in the end weren’t as rigid as feared. The thing that was problematic in cases which are most, however, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of the core components of supply chain resilience:
Using this framework for the assessment of the interviews, the findings indicate that not many companies had been nicely prepared for the corona problems and in reality mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
First, the need to design the supply chain for agility and flexibility. This appears particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the business, and smaller organizations often do not have the capacity to do it.
Next, it was discovered that more interest was needed on spreading danger and also aiming for risk reduction inside the supply chain. For the future, this means more attention ought to be given to the manner in which organizations depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing techniques in cases where need can’t be met. Explicit prioritization is required to continue to satisfy market expectations but also to increase market shares wherein competitors miss options. This task isn’t new, however, it has also been underexposed in this specific crisis and was often not part of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial impact of a crisis also depends on the manner in which cooperation in the chain is actually set up. It’s usually unclear precisely how additional costs (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain capabilities are actually in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand in deep hand with supply chain events. Whether or not the corona pandemic will structurally replace the traditional discussions between logistics and generation on the one hand as well as marketing on the other, the long term must explain to.
How’s the Dutch food supply chain coping during the corona crisis?