Supply chain – The COVID 19 pandemic has certainly had its impact effect on the planet. Economic indicators and health have been compromised and all industries are touched inside one way or even some other. One of the industries in which it was clearly obvious is the agriculture as well as food business.
Throughout 2019, the Dutch farming as well as food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big consequences for the Dutch economy and food security as lots of stakeholders are impacted. Despite the fact that it was clear to numerous folks that there was a big effect at the tail end of the chain (e.g., hoarding in supermarkets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find a lot of actors in the source chain for that the effect is less clear. It is thus vital that you find out how effectively the food supply chain as being a whole is prepared to contend with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty as well as out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic all over the food supplies chain. They based their analysis on interviews with around thirty Dutch supply chain actors.
Demand within retail up, in food service down It’s evident and popular that demand in the foodservice stations went down due to the closure of places, amongst others. In a few cases, sales for suppliers in the food service industry therefore fell to about 20 % of the initial volume. Being an adverse reaction, demand in the retail channels went up and remained at a degree of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come through abroad had the own problems of theirs. With the change in desire coming from foodservice to retail, the need for packaging improved considerably, More tin, cup or plastic material was needed for wearing in customer packaging. As more of this particular packaging material ended up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in need have had a big impact on output activities. In a few cases, this even meant the full stop of production (e.g. in the duck farming business, which arrived to a standstill on account of demand fall out inside the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. to the meat processing industry), causing a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down pretty shortly in 2020. This resulted in transport capability which is restricted during the first weeks of the issues, and costs that are high for container transport as a direct result. Truck travel experienced various problems. To begin with, there were uncertainties regarding how transport would be managed at borders, which in the long run were not as strict as feared. That which was problematic in many situations, however, was the availability of drivers.
The reaction to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was based on the overview of this core components of supply chain resilience:
To us this framework for the assessment of the interview, the results show that not many organizations had been well prepared for the corona crisis and in fact mainly applied responsive methods. The most notable supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
To begin with, the need to design the supply chain for agility and versatility. This appears particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations usually don’t have the potential to do it.
Next, it was observed that much more attention was needed on spreading danger and aiming for risk reduction in the supply chain. For the future, meaning far more attention ought to be made available to the manner in which businesses rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in situations where demand can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to improve market shares where competitors miss opportunities. This task isn’t new, though it has in addition been underexposed in this specific crisis and was often not part of preparatory pursuits.
Fourthly, the corona issues shows us that the economic impact of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It is usually unclear exactly how further expenses (and benefits) are sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain features are actually in the driving seat during a crisis. Product development and marketing activities have to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally replace the traditional discussions between logistics and generation on the one hand and advertising and marketing on the other hand, the long term will need to tell.
How’s the Dutch food supply chain coping throughout the corona crisis?