Supply chain – The COVID-19 pandemic has definitely had the impact of its influence on the world. health and Economic indicators have been compromised and all industries are touched in a way or even another. One of the industries in which this was clearly visible would be the agriculture and food industry.
In 2019, the Dutch agriculture and food niche contributed 6.4 % to the gross domestic product (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 the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have significant effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Though it was apparent to numerous men and women that there was a big effect at the tail end of this chain (e.g., hoarding doing food markets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors in the supply chain for that the impact is much less clear. It’s thus vital that you find out how well the food supply chain as being a whole is actually armed to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID 19 pandemic throughout the food resources chain. They based the analysis of theirs on interviews with around 30 Dutch supply chain actors.
Need in retail up, in food service down It is obvious and well known that demand in the foodservice channels went down due to the closure of joints, amongst others. In some instances, sales for suppliers of the food service business thus fell to about twenty % of the first volume. As a complication, demand in the retail channels went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis started.
Products that had to come through abroad had the own issues of theirs. With the change in demand from foodservice to retail, the requirement for packaging changed considerably, More tin, cup and plastic was necessary for wearing in customer packaging. As much more of this packaging material ended up in consumers’ homes instead of in restaurants, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a big effect on production activities. In some cases, this even meant a full stop in production (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall out in the foodservice sector). In other situations, a significant section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis of China sparked the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capacity which is limited throughout the very first weeks of the issues, and high costs for container transport as a result. Truck transport experienced different problems. To begin with, there were uncertainties about how transport will be managed at borders, which in the long run were not as stringent as feared. That which was problematic in instances that are many , nonetheless, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was based on the overview of this core things of supply chain resilience:
Using this particular framework for the evaluation of the interview, the conclusions show that not many businesses were well prepared for the corona crisis and in fact mostly applied responsive methods. The most notable source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
To begin with, the need to create the supply chain for flexibility and agility. This looks especially complicated for smaller companies: building resilience into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the capability to accomplish that.
Second, it was observed that more attention was necessary on spreading danger and aiming for risk reduction within the supply chain. For the future, meaning far more attention should be made available to the manner in which companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing strategies in situations where need can’t be met. Explicit prioritization is actually required to continue to meet market expectations but in addition to boost market shares in which competitors miss options. This particular task is not new, but it has in addition been underexposed in this problems and was often not a part of preparatory pursuits.
Fourthly, the corona problems shows you us that the financial impact of a crisis in addition relies on the way cooperation in the chain is actually set up. It’s typically unclear how extra costs (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain works are in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand deeply in hand with supply chain events. Whether or not the corona pandemic will structurally change the traditional discussions between creation and logistics on the one hand as well as marketing and advertising on the other, the future must explain to.
How’s the Dutch meal supply chain coping during the corona crisis?