Supply chain – The COVID-19 pandemic has definitely had the impact of its impact on the world. Economic indicators and health have been affected and all industries have been completely touched in one of the ways or yet another. One of the industries in which it was clearly noticeable is the farming as well as food industry.
Throughout 2019, the Dutch farming and food niche contributed 6.4 % to the yucky domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion in 2020. The hospitality business 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 of the food chain have major effects for the Dutch economy as well as food security as many stakeholders are impacted. Even though it was clear to a lot of folks that there was a huge impact at the tail end of this chain (e.g., hoarding in grocery stores, eateries closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), there are many actors within the supply chain for that the impact is much less clear. It’s thus imperative that you find out how effectively the food supply chain as a whole is equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and 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 about thirty Dutch source chain actors.
Demand in retail up, that is found food service down It is obvious and well known that need in the foodservice channels went down as a result of the closure of restaurants, amongst others. In some instances, sales for vendors of the food service industry therefore fell to about 20 % of the first volume. As an adverse reaction, demand in the retail stations went up and remained within a quality of about 10-20 % greater than before the crisis began.
Goods that had to come from abroad had their very own problems. With the shift in desire from foodservice to retail, the need for packaging improved dramatically, More tin, glass and plastic material was necessary for wearing in customer packaging. As much more of this product packaging material ended up in consumers’ houses rather than in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in demand have had a significant impact on production activities. In certain instances, this even meant a total stop of production (e.g. inside the duck farming business, which came to a standstill as a result of demand fall out in the foodservice sector). In other instances, a major section of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down pretty soon in 2020. This resulted in restricted transport capability during the earliest weeks of the crisis, and expenses that are high for container transport as a consequence. Truck travel experienced various problems. Initially, there were uncertainties regarding how transport would be handled for borders, which in the long run were not as strict as feared. That which was problematic in situations which are most, nevertheless, was the accessibility of motorists.
The reaction to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the core things of supply chain resilience:
To us this framework for the analysis of the interviews, the findings show that few companies were well prepared for the corona problems and in fact mostly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
To begin with, the need to design the supply chain for versatility and agility. This appears particularly complicated for small companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes don’t have the potential to do so.
Second, it was found that more attention was necessary on spreading risk and aiming for risk reduction within the supply chain. For the future, this means more attention has to be made available to the way companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing strategies in cases where need can’t be met. Explicit prioritization is needed to keep on to meet market expectations but also to increase market shares wherein competitors miss opportunities. This particular challenge isn’t new, but it has in addition been underexposed in this problems and was usually not a component of preparatory activities.
Fourthly, the corona problems shows you us that the financial effect of a crisis also is determined by the way cooperation in the chain is actually set up. It is often unclear how extra expenses (and benefits) are actually distributed in a chain, in case at all.
Last but not least, relative to other functional departments, the businesses and supply chain capabilities are actually in the driving seat during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally switch the traditional discussions between logistics and creation on the one hand as well as marketing and advertising on the other, the long term must explain to.
How is the Dutch food supply chain coping throughout the corona crisis?