Supply chain – The COVID-19 pandemic has undoubtedly had its impact influence on the world. health and Economic indicators have been affected and all industries have been touched within one way or perhaps some other. One of the industries in which this was clearly noticeable is the agriculture and food industry.
In 2019, the Dutch farming as well as food industry contributed 6.4 % to the gross domestic product (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion in 2020. The hospitality business lost 41.5 % of its turnover as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have major effects for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was clear to numerous men and women that there was a significant impact at the conclusion of this chain (e.g., hoarding doing grocery stores, eateries closing) and at the start of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors in the supply chain for which the effect is less clear. It’s thus important to determine how properly the food supply chain as being a whole is prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and also coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic throughout the food supply chain. They based the examination of theirs on interviews with around thirty Dutch supply chain actors.
Demand in retail up, that is found food service down It’s evident and popular that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain cases, sales for vendors of the food service business therefore fell to about twenty % of the first volume. As a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10-20 % greater than before the crisis started.
Products which had to come from abroad had their very own issues. With the shift in desire from foodservice to retail, the need for packaging improved considerably, More tin, cup and plastic material was required for use in customer packaging. As much more of this packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in desire have had a big affect on output activities. In a few cases, this even meant a total stop in production (e.g. inside the duck farming industry, which came to a standstill on account of demand fall out on the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. to the meat processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis of China triggered the flow of sea bins to slow down fairly soon in 2020. This resulted in transport capacity which is limited during the earliest weeks of the problems, and costs that are high for container transport as a result. Truck transport faced various problems. To begin with, there were uncertainties about how transport will be handled for borders, which in the end were not as rigid as feared. The thing that was problematic in many instances, nonetheless, was the accessibility of drivers.
The response to COVID-19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of this primary things of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the results show that few businesses were well prepared for the corona problems and in reality mostly applied responsive practices. The most notable source chain lessons were:
Figure one. 8 best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for versatility and agility. This seems especially complicated for small companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations usually do not have the capacity to do it.
Next, it was discovered that much more attention was required on spreading risk and aiming for risk reduction within the supply chain. For the future, what this means is more attention has to be made available to the manner in which businesses count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization as well as clever rationing strategies in cases in which demand can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but additionally to improve market shares in which competitors miss opportunities. This task is not new, however, it has additionally been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona problems shows you us that the economic impact of a crisis additionally depends on the way cooperation in the chain is actually set up. It is usually unclear precisely how extra expenses (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 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 activities. Regardless of whether the corona pandemic will structurally change the traditional considerations between production and logistics on the one hand as well as advertising and marketing on the other hand, the long term will need to tell.
How is the Dutch foods supply chain coping throughout the corona crisis?