Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its impact on the world. health and Economic indicators have been affected and all industries have been completely touched inside a way or even another. One of the industries in which it was clearly visible would be the farming and food business.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major consequences for the Dutch economy as well as food security as lots of stakeholders are impacted. Even though it was clear to majority of individuals that there was a significant impact at the tail end of this chain (e.g., hoarding around food markets, restaurants closing) and at the start of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the supply chain for which the impact is less clear. It is therefore imperative that you determine how well the food supply chain as being a whole is actually armed to contend with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with about thirty Dutch source chain actors.
Need within retail up, contained food service down It is apparent and popular that need in the foodservice stations went down as a result of the closure of joints, amongst others. In a few cases, sales for vendors of the food service industry therefore fell to aproximatelly twenty % of the first volume. As an adverse reaction, demand in the list channels went up and remained at a degree of aproximatelly 10-20 % greater than before the problems started.
Products which had to come from abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the demand for packaging improved considerably, More tin, cup or plastic was required for use in buyer packaging. As much more of this particular packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had an important effect on production activities. In a few cases, this even meant a complete stop in output (e.g. inside the duck farming business, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other situations, a major portion of the personnel contracted corona (e.g. to the various meats processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis of China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport capability which is limited during the first weeks of the issues, and costs which are high for container transport as a direct result. Truck travel experienced different problems. At first, there were uncertainties regarding how transport would be handled for borders, which in the long run were not as stringent as feared. What was problematic in situations that are many , however, was the accessibility of motorists.
The response to COVID 19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this key things of supply chain resilience:
To us this framework for the evaluation of the interview, the results indicate that not many companies had been well prepared for the corona crisis and in reality mostly applied responsive methods. The most notable source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to develop the supply chain for agility as well as flexibility. This looks particularly challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the business, and smaller organizations often do not have the capability to do so.
Second, it was found that much more attention was required on spreading danger and aiming for risk reduction in the supply chain. For the future, this means more attention has to be given to the way businesses rely on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in situations where demand can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but also to increase market shares wherein competitors miss options. This task is not new, but it’s also been underexposed in this problems and was frequently not a component of preparatory activities.
Fourthly, the corona problems shows us that the monetary impact of a crisis in addition relies on the manner in which cooperation in the chain is actually set up. It is often unclear how further costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain functions are in the driving seat during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional discussions between logistics and creation on the one hand and advertising and marketing on the other, the future will need to explain to.
How’s the Dutch food supply chain coping during the corona crisis?