Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the planet. Economic indicators and health have been compromised and all industries are touched within a way or some other. One of the industries in which it was clearly noticeable is the agriculture and food industry.
In 2019, the Dutch farming and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Despite the fact that it was clear to many people that there was a big effect at the tail end of this chain (e.g., hoarding around supermarkets, eateries closing) and at the beginning of this chain (e.g., harvested potatoes not finding customers), you will find many actors in the source chain for which the impact is much less clear. It is thus vital that you figure out how effectively the food supply chain as being a whole is actually equipped to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with around 30 Dutch supply chain actors.
Need in retail up, found food service down It is evident and well known that need in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain instances, sales for suppliers in the food service industry therefore fell to about 20 % of the original volume. As a complication, demand in the retail channels went up and remained within a degree of about 10-20 % higher than before the problems started.
Products which had to come through abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the need for packaging improved dramatically, More tin, cup and plastic material was required for wearing in consumer packaging. As much more of this particular packaging material ended up in consumers’ homes as opposed to in places, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had an important impact on output activities. In a few instances, this even meant a full stop in production (e.g. in the duck farming industry, which arrived to a standstill on account 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 pursuits were also affected. The beginning of the Corona crisis of China triggered the flow of sea containers to slow down pretty soon in 2020. This resulted in limited transport capacity during the first weeks of the issues, and high expenses for container transport as a direct result. Truck travel experienced various issues. At first, there were uncertainties about how transport would be handled at borders, which in the end were not as rigid as feared. The thing that was problematic in most instances, nonetheless, was the accessibility of drivers.
The reaction to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the main things of supply chain resilience:
Using this framework for the evaluation of the interviews, the results show that few businesses had been nicely prepared for the corona problems and actually mostly applied responsive methods. The most important supply chain lessons were:
Figure one. Eight best methods for food supply chain resilience
For starters, the need to design the supply chain for agility and versatility. This looks especially challenging for smaller sized companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations usually do not have the capacity to accomplish that.
Next, it was found that much more attention was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, meaning far more attention ought to be provided to the way businesses rely on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases where demand can’t be met. Explicit prioritization is actually required to continue to meet market expectations but additionally to increase market shares in which competitors miss options. This particular challenge is not new, although it’s in addition been underexposed in this specific crisis and was usually not a component of preparatory activities.
Fourthly, the corona problems shows us that the financial result of a crisis also relies on the manner in which cooperation in the chain is set up. It’s typically unclear exactly how further costs (and benefits) are sent out in a chain, in case at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain works are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the basic considerations between generation and logistics on the one hand as well as marketing on the other hand, the potential future will need to explain to.
How is the Dutch food supply chain coping during the corona crisis?