Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the world. Economic indicators and health have been affected and all industries are touched within one of the ways or even yet another. One of the industries in which this was clearly obvious is the farming as well as food business.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy and food security as lots of stakeholders are impacted. Even though it was apparent to many people that there was a great impact at the end of the chain (e.g., hoarding around supermarkets, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are many actors inside the source chain for which the impact is much less clear. It’s therefore important to figure out how well the food supply chain as being a whole is armed to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food resources chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need in retail up, found food service down It’s obvious and widely known that demand in the foodservice stations went down as a result of the closure of restaurants, amongst others. In a few instances, sales for suppliers in the food service business therefore fell to aproximatelly twenty % of the first volume. Being a side effect, demand in the list stations went up and remained within a degree of aproximatelly 10-20 % higher than before the crisis began.
Products that had to come via abroad had the own issues of theirs. With the change in desire from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic material was required for use in consumer packaging. As more of this packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had an important affect on production activities. In a few instances, this even meant a full stop of production (e.g. inside the duck farming industry, which arrived to a standstill due to demand fall out on the foodservice sector). In other situations, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China triggered the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capability that is limited during the earliest weeks of the problems, and costs that are high for container transport as a consequence. Truck transportation encountered different problems. At first, there were uncertainties about how transport would be managed at borders, which in the long run were not as strict as feared. That which was problematic in instances which are a large number of, nonetheless, was the availability of drivers.
The response to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of the core elements of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results show that not many companies were nicely prepared for the corona problems and actually mainly applied responsive practices. The most notable supply chain lessons were:
Figure 1. 8 best practices for meals supply chain resilience
For starters, the need to develop the supply chain for versatility and agility. This seems particularly challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capability to accomplish that.
Second, it was observed that much more interest was needed on spreading risk as well as aiming for risk reduction inside the supply chain. For the future, meaning far more attention has to be provided to the manner in which companies depend on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases where demand cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but additionally to improve market shares where competitors miss options. This particular task is not new, although it has in addition been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona issues teaches us that the monetary effect of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It’s usually unclear exactly how further expenses (and benefits) are distributed in a chain, in case at all.
Lastly, relative to other purposeful departments, the operations and supply chain operates are actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain pursuits. Whether the corona pandemic will structurally change the classic considerations between creation and logistics on the one hand and advertising on the other, the long term must explain to.
How’s the Dutch food supply chain coping during the corona crisis?