Supply chain – The COVID 19 pandemic has certainly had its impact impact on the planet. health and Economic indicators have been affected and all industries are touched inside one of the ways or another. One of the industries in which this was clearly noticeable would be the farming and food industry.
In 2019, the Dutch extension and food sector contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are affected. Though it was clear to a lot of people that there was a great impact at the conclusion of this chain (e.g., hoarding in food markets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the source chain for which the impact is less clear. It is therefore vital that you determine how effectively the food supply chain as being a whole is prepared to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID-19 pandemic all over the food supplies chain. They based their examination on interviews with around thirty Dutch supply chain actors.
Demand in retail up, in food service down It is apparent and popular that demand in the foodservice channels went down on account of the closure of places, amongst others. In some cases, sales for vendors of the food service industry thus fell to about twenty % of the first volume. Being a side effect, demand in the list stations went up and remained within a quality of about 10-20 % greater than before the crisis began.
Products that had to come via abroad had the own problems of theirs. With the shift in desire from foodservice to retail, the demand for packaging improved dramatically, More tin, cup or plastic material was required for wearing in buyer packaging. As much more of this packaging material ended up in consumers’ homes as opposed to in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in desire have had a significant impact on production activities. In a few cases, this even meant a full stop of production (e.g. within the duck farming business, which emerged to a standstill due to demand fall out on the foodservice sector). In other cases, a major portion of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity which is limited throughout the first weeks of the problems, and high expenses for container transport as a direct result. Truck transport encountered different problems. To begin with, there were uncertainties about how transport will be handled for borders, which in the long run were not as rigid as feared. That which was problematic in many situations, nonetheless, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was based on the overview of the primary elements of supply chain resilience:
To us this framework for the assessment of the interview, the findings indicate that not many businesses had been nicely prepared for the corona crisis and actually mainly applied responsive methods. The most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
For starters, the need to design the supply chain for flexibility and agility. This seems particularly complicated for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations often don’t have the potential to do so.
Next, it was discovered that more attention was necessary on spreading danger as well as aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be given to the way organizations depend on suppliers, customers, and specific countries.
Third, attention is needed for explicit prioritization as well as smart rationing techniques in cases where need can’t be met. Explicit prioritization is actually needed to continue to meet market expectations but in addition to boost market shares where competitors miss opportunities. This particular challenge is not new, though it has also been underexposed in this crisis and was usually not a part of preparatory pursuits.
Fourthly, the corona problems teaches us that the monetary effect of a crisis also depends on the way cooperation in the chain is actually set up. It’s usually unclear how further expenses (and benefits) are actually distributed in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain features are actually in the driving seat during a crisis. Product development and advertising activities need to go hand in deep hand with supply chain activities. Regardless of whether the corona pandemic will structurally switch the basic discussions between logistics and production on the one hand and marketing on the other hand, the potential future must tell.
How is the Dutch foods supply chain coping throughout the corona crisis?