Supply chain – The COVID 19 pandemic has definitely had its impact impact on the world. health and Economic indicators have been compromised and all industries are touched in one way or yet another. One of the industries in which it was clearly obvious would be the farming and food business.
Throughout 2019, the Dutch farming and food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion within 2020[1]. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as lots of stakeholders are impacted. Though it was apparent to numerous people that there was a great effect at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) and also at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find a lot of actors in the supply chain for which the impact is much less clear. It’s thus vital that you figure out how effectively the food supply chain as being a whole is equipped to contend with disruptions. Researchers in the 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 throughout the food supplies chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand within retail up, that is found food service down It is apparent and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In a few instances, sales for vendors in the food service business therefore fell to about 20 % of the initial volume. As a complication, demand in the list channels went up and remained at a level of about 10-20 % higher than before the crisis started.
Goods that had to come through abroad had the own problems of theirs. With the shift in desire coming from foodservice to retail, the need for packaging changed dramatically, More tin, glass and plastic was required for use in customer packaging. As more of this packaging material ended up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant effect on production activities. In some cases, this even meant a full stop of output (e.g. within the duck farming industry, which came to a standstill due to demand fall out inside the foodservice sector). In other instances, a significant section 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 beginning of the Corona crisis of China caused the flow of sea canisters to slow down fairly shortly in 2020. This resulted in transport capacity that is limited during the first weeks of the issues, and high costs for container transport as a direct result. Truck transport encountered different issues. At first, there were uncertainties about how transport will be handled for borders, which in the end weren’t as rigid as feared. What was problematic in situations which are most, nonetheless, was the accessibility of drivers.
The response to COVID-19 – supply 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 particular framework for the assessment of the interviews, the findings indicate that few businesses had been nicely prepared for the corona crisis and actually mainly applied responsive methods. The most important source chain lessons were:
Figure 1. 8 best methods for food supply chain resilience
First, the need to design the supply chain for versatility and agility. This seems especially challenging for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations often don’t have the potential to accomplish that.
Second, it was found that more interest was required on spreading threat and aiming for risk reduction within the supply chain. For the future, meaning more attention has to be given to the manner in which organizations rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing techniques in cases where demand cannot be met. Explicit prioritization is actually required to continue to satisfy market expectations but also to increase market shares wherein competitors miss options. This particular challenge is not new, but it has also been underexposed in this specific crisis and was frequently not a component of preparatory activities.
Fourthly, the corona problems shows us that the economic result of a crisis additionally depends on the way cooperation in the chain is set up. It is usually unclear precisely how extra expenses (and benefits) are sent out in a chain, in case at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally change the classic considerations between logistics and creation on the one hand and advertising on the other, the long term will need to explain to.
How’s the Dutch foods supply chain coping throughout the corona crisis?
