Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the world. Economic indicators and health have been compromised and all industries have been touched inside one of the ways or even another. One of the industries in which it was clearly noticeable is the farming and food industry.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as many stakeholders are affected. Despite the fact that it was apparent to majority of individuals that there was a big effect at the conclusion of this chain (e.g., hoarding around grocery stores, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors inside the supply chain for that the impact is much less clear. It is therefore vital that you find out how well the food supply chain as a whole is actually armed to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with about thirty Dutch source chain actors.
Demand in retail up, that is found food service down It is apparent and well known that need in the foodservice stations went down on account of the closure of joints, amongst others. In some cases, sales for suppliers in the food service business therefore fell to aproximatelly twenty % of the first volume. Being a side effect, demand in the retail channels went up and remained within a level of about 10-20 % higher than before the crisis started.
Products that had to come via abroad had their own problems. With the shift in need coming from foodservice to retail, the demand for packaging improved considerably, More tin, glass and plastic material was necessary for use in consumer packaging. As more of this packaging material concluded up in consumers’ homes instead of in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in demand have had a major impact on production activities. In some instances, this even meant a complete stop of output (e.g. inside the duck farming industry, which arrived to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a significant part of the personnel contracted corona (e.g. to the meat processing industry), resulting in 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 fairly shortly in 2020. This resulted in transport capacity that is restricted during the very first weeks of the problems, and costs that are high for container transport as a result. Truck travel experienced various problems. At first, there were uncertainties on how transport will be managed for borders, which in the end weren’t as strict as feared. The thing that was problematic in instances that are a large number of , nonetheless, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of the core components of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the findings indicate that not many companies were nicely prepared for the corona crisis and in fact mostly applied responsive practices. The most notable source chain lessons were:
Figure one. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for agility as well as flexibility. This looks particularly challenging for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the potential to do it.
Second, it was found that much more interest was required on spreading risk as well as aiming for risk reduction within the supply chain. For the future, this means more attention should be provided to the way businesses depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing techniques in cases in which need cannot be met. Explicit prioritization is needed to keep on to meet market expectations but in addition to increase market shares in which competitors miss opportunities. This task isn’t new, however, it’s additionally been underexposed in this problems and was usually 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 way cooperation in the chain is actually set up. It is usually unclear precisely how additional expenses (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain capabilities are actually in the driving seat during a crisis. Product development and advertising activities need to go hand deeply in hand with supply chain events. Regardless of whether the corona pandemic will structurally switch the classic discussions between logistics and creation on the one hand and marketing and advertising on the other, the future will have to explain to.
How is the Dutch food supply chain coping throughout the corona crisis?