Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the world. Economic indicators and health have been compromised and all industries have been touched in a way or even another. Among the industries in which it was clearly visible will be the farming and food industry.
In 2019, the Dutch extension and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality trade 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 a lot of stakeholders are impacted. Though it was clear to most folks that there was a significant effect at the conclusion of the chain (e.g., hoarding doing supermarkets, restaurants closing) and also at the start of this chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the source chain for which the effect is less clear. It’s therefore imperative that you find out how effectively the food supply chain as being a whole is armed to deal with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences 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 within retail up, in food service down It’s evident and popular that need in the foodservice stations went down due to the closure of places, amongst others. In certain instances, sales for vendors in the food service business as a result fell to about twenty % of the first volume. Being a complication, demand in the list channels 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 own problems. With the shift in need from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic was necessary for use in consumer packaging. As much more of this particular packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in need have had a big impact on production activities. In certain cases, this even meant a complete stop of output (e.g. in the duck farming industry, which emerged 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 equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China sparked the flow of sea bins to slow down fairly soon in 2020. This resulted in transport electrical capacity that is limited during the very first weeks of the issues, and costs that are high for container transport as a result. Truck travel encountered different issues. Initially, there were uncertainties regarding how transport would be handled at borders, which in the end were not as strict as feared. The thing that was problematic in instances that are many , nevertheless, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Colleagues and Leeuw, was based on the overview of this key things of supply chain resilience:
Using this particular framework for the analysis of the interviews, the results show that not many organizations had been well prepared for the corona crisis and in fact mostly applied responsive methods. The most important source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
First, the need to design the supply chain for agility and flexibility. This seems 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 it.
Next, it was discovered that much more attention was needed on spreading risk and aiming for risk reduction in the supply chain. For the future, this means far more attention should be given to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases where need cannot be met. Explicit prioritization is necessary to keep on to meet market expectations but in addition to improve market shares wherein competitors miss options. This task isn’t new, however, it has also been underexposed in this problems and was usually not a component of preparatory pursuits.
Fourthly, the corona issues teaches us that the economic result of a crisis additionally relies on the manner in which cooperation in the chain is actually set up. It’s typically unclear precisely how additional expenses (and benefits) are distributed in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain functionality are actually in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Regardless of whether the corona pandemic will structurally switch the basic discussions between generation and logistics on the one hand as well as advertising on the other, the long term must tell.
How’s the Dutch foods supply chain coping throughout the corona crisis?