Supply chain – The COVID 19 pandemic has definitely had the impact of its impact on the world. health and Economic indicators have been affected and all industries are touched inside one way or another. Among the industries in which it was clearly apparent would be the farming as well as food industry.
Throughout 2019, the Dutch extension as well as food niche contributed 6.4 % to the disgusting domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice business in the Netherlands lost € 7.1 billion within 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major consequences for the Dutch economy as well as food security as many stakeholders are impacted. Though it was apparent to a lot of people that there was a great impact at the end of this chain (e.g., hoarding in grocery stores, eateries closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the source chain for that the effect is less clear. It is therefore imperative that you figure out how well the food supply chain as being a whole is equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with about thirty Dutch source chain actors.
Need in retail up, in food service down It is evident and widely known that demand in the foodservice stations went down due to the closure of restaurants, amongst others. In certain cases, sales for vendors of the food service industry as a result fell to aproximatelly 20 % of the original volume. As a side effect, demand in the list stations went up and remained within a degree of about 10-20 % higher than before the problems began.
Products that had to come from abroad had the own issues of theirs. With the shift in need coming from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic material was required for use in customer packaging. As more of this packaging material ended up in consumers’ homes instead of in places, the cardboard recycling function got disrupted too, causing shortages.
The shifts in desire have had a significant impact on production activities. In certain cases, this even meant a complete stop of output (e.g. in the duck farming industry, which came to a standstill due to demand fall-out on the foodservice sector). In other cases, a big section of the personnel contracted corona (e.g. in the meat processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits 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 transport electrical capacity that is restricted throughout the very first weeks of the issues, and high costs for container transport as a consequence. Truck travel encountered various problems. To begin with, there were uncertainties on how transport will be managed for borders, which in the end were not as strict as feared. What was problematic in most situations, however, was the accessibility of drivers.
The response to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was used on the overview of the key components of supply chain resilience:
Using this framework for the assessment of the interviews, the findings show that few companies had been nicely prepared for the corona problems and actually mostly applied responsive methods. Probably the most important supply chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, 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 attention and time in the organization, and smaller organizations usually do not have the capacity to accomplish that.
Next, it was found that much more attention was required on spreading risk and also aiming for risk reduction in the supply chain. For the future, meaning far more attention ought to be provided to the way organizations depend on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and clever rationing strategies in situations in which need can’t be met. Explicit prioritization is necessary to continue to meet market expectations but additionally to improve market shares where competitors miss opportunities. This task is not new, though it has also been underexposed in this problems and was usually not part of preparatory activities.
Fourthly, the corona issues shows you us that the monetary result of a crisis also is determined by the way cooperation in the chain is actually set up. It’s usually unclear precisely how extra costs (and benefits) are sent out in a chain, if at all.
Last but not least, relative to other purposeful departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities have to go hand in deep hand with supply chain pursuits. Whether or not the corona pandemic will structurally change the basic discussions between logistics and generation on the one hand as well as marketing and advertising on the other hand, the future will have to tell.
How is the Dutch food supply chain coping during the corona crisis?