Supply chain – The COVID 19 pandemic has undoubtedly had the impact of its effect on the world. Economic indicators and health have been affected and all industries have been completely touched inside a way or perhaps another. One of the industries in which this was clearly visible will be the agriculture and food industry.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). Based on 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 the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have significant consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was clear to numerous people that there was a big effect at the tail end of this chain (e.g., hoarding in supermarkets, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors inside the source chain for that will the impact is less clear. It is thus vital that you find out how properly the food supply chain as being a whole is prepared to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food resources chain. They based their analysis on interviews with around 30 Dutch source chain actors.
Need within retail up, that is found food service down It’s obvious and well known that need in the foodservice channels went down as a result of the closure of joints, amongst others. In certain instances, sales for vendors of the food service industry as a result fell to about twenty % of the original volume. As an adverse reaction, demand in the list channels went up and remained within a degree of aproximatelly 10-20 % higher than before the crisis started.
Products which had to come through abroad had their own issues. With the shift in desire coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic was required for use in consumer packaging. As much more of this packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in desire have had a big effect on output activities. In certain cases, this even meant a total stop in production (e.g. in the duck farming business, which arrived to a standstill on account of demand fall out in the foodservice sector). In other cases, a major section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport electrical capacity which is restricted throughout the earliest weeks of the problems, and expenses which are high for container transport as a result. Truck travel faced various problems. At first, there were uncertainties on how transport will be handled at borders, which in the end were not as strict as feared. The thing that was problematic in instances which are a large number of, however, was the availability of drivers.
The reaction to COVID-19 – provide chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the main things of supply chain resilience:
To us this particular framework for the assessment of the interviews, the conclusions show that few businesses had been nicely prepared for the corona problems and in reality mostly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
First, the need to develop the supply chain for versatility and agility. This looks particularly challenging for smaller sized companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capability to do so.
Next, it was found that much more interest was necessary on spreading danger and aiming for risk reduction in the supply chain. For the future, what this means is far more attention ought to be given to the way organizations count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing strategies in situations where demand cannot be met. Explicit prioritization is actually needed to keep on to satisfy market expectations but additionally to increase market shares where competitors miss options. This particular challenge is not new, but it has in addition been underexposed in this specific crisis and was often not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the economic result of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is usually unclear precisely how extra costs (and benefits) are actually distributed in a chain, if at all.
Lastly, relative to other purposeful departments, the businesses and supply chain operates are in the driving seat during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally replace the classic discussions between generation and logistics on the one hand and advertising on the other, the potential future will have to explain to.
How is the Dutch foods supply chain coping during the corona crisis?