Supply chain – The COVID 19 pandemic has definitely had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been touched inside a way or even another. Among the industries in which it was clearly visible would be the farming as well as food industry.
In 2019, the Dutch agriculture as well as 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 in 2020. The hospitality industry lost 41.5 % of the turnover of its as show by ProcurementNation, while at 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 and food security as a lot of stakeholders are impacted. Though it was clear to most men and women that there was a significant effect at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), there are a lot of actors inside the source chain for that the effect is less clear. It’s therefore important to determine how effectively the food supply chain as a whole is armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with around 30 Dutch source chain actors.
Demand in retail up, in food service down It is obvious and widely known that demand in the foodservice channels went down on account of the closure of joints, amongst others. In some instances, sales for vendors in the food service industry thus fell to about twenty % of the initial volume. As a side effect, demand in the retail stations went up and remained within a degree of about 10-20 % greater than before the problems started.
Products which had to come through abroad had their own issues. With the change in desire coming from foodservice to retail, the need for packaging changed considerably, More tin, glass and plastic was required for wearing in customer packaging. As much more of this particular product packaging material concluded up in consumers’ homes rather than in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in need have had an important impact on production activities. In a few cases, this even meant the full stop in production (e.g. within the duck farming business, which came to a standstill as a result of demand fall-out on the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis in China caused the flow of sea canisters to slow down pretty soon in 2020. This resulted in transport capability which is restricted throughout the first weeks of the crisis, and high expenses for container transport as a direct result. Truck transportation encountered different issues. Initially, there were uncertainties regarding how transport would be handled at borders, which in the end were not as rigid as feared. What was problematic in instances which are a large number of, however, was the accessibility of drivers.
The reaction to COVID-19 – provide chain resilience The source chain resilience evaluation held by Prof. de Colleagues as well as Leeuw, was used on the overview of this core things of supply chain resilience:
Using this framework for the assessment of the interviews, the results show that few companies had been well prepared for the corona crisis and in fact mainly applied responsive methods. Probably the most notable source chain lessons were:
Figure 1. 8 best practices for food supply chain resilience
First, the need to develop the supply chain for versatility and agility. This looks particularly complicated for small companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations often do not have the potential to accomplish that.
Second, it was found that more interest was necessary on spreading risk and also aiming for risk reduction in the supply chain. For the future, meaning far more attention should be made available to the way companies count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and intelligent rationing strategies in cases where need can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but in addition to improve market shares where competitors miss options. This particular challenge is not new, though it’s also been underexposed in this problems and was often not a part of preparatory activities.
Fourthly, the corona crisis shows you us that the economic effect of a crisis in addition is determined by the manner in which cooperation in the chain is actually set up. It is often unclear how additional expenses (and benefits) are sent out in a chain, in case at all.
Lastly, relative to other functional departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Whether or not the corona pandemic will structurally change the traditional considerations between logistics and production on the one hand as well as marketing on the other, the potential future will need to tell.
How is the Dutch meal supply chain coping during the corona crisis?