Supply chain – The COVID-19 pandemic has certainly had the impact of its effect on the world. Economic indicators and health have been affected and all industries have been completely touched within a way or even another. One of the industries in which this was clearly noticeable would be the farming and food industry.
Throughout 2019, the Dutch farming and food sector contributed 6.4 % to the yucky domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was apparent to numerous individuals that there was a huge effect at the end of the chain (e.g., hoarding around supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), there are many actors within the source chain for that will the impact is much less clear. It is therefore important to figure out how well the food supply chain as a whole is equipped to contend with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and out of Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic throughout the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand in retail up, that is found food service down It is apparent and well known that demand in the foodservice stations went down on account of the closure of joints, amongst others. In some cases, sales for suppliers in the food service business therefore fell to about twenty % of the initial volume. As a side effect, demand in the retail channels went up and remained at a level of aproximatelly 10 20 % higher than before the problems began.
Goods that had to come via abroad had their very own problems. With the shift in demand coming from foodservice to retail, the requirement for packaging improved considerably, More tin, glass and plastic material was required for wearing in customer packaging. As more of this packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant effect on production activities. In some instances, this even meant a full stop in production (e.g. in the duck farming industry, which emerged to a standstill on account of demand fall out in the foodservice sector). In other instances, a big section of the personnel contracted corona (e.g. in the various meats processing industry), causing a closure of facilities.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in restricted transport capability throughout the earliest weeks of the problems, and costs which are high for container transport as a result. Truck transportation faced various problems. To begin with, there were uncertainties on how transport would be handled at borders, which in the long run were not as strict as feared. The thing that was problematic in most situations, however, was the availability of drivers.
The reaction to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Colleagues and Leeuw, was based on the overview of this main components of supply chain resilience:
To us this framework for the assessment of the interviews, the conclusions indicate that few companies were well prepared for the corona problems and actually mostly applied responsive practices. The most notable source chain lessons were:
Figure one. 8 best practices for food supply chain resilience
For starters, the need to create the supply chain for versatility as well as agility. This looks particularly challenging for smaller companies: building resilience into a supply chain takes time and attention in the business, and smaller organizations oftentimes don’t have the capacity to do it.
Second, it was discovered that much more attention was necessary on spreading danger as well as aiming for risk reduction in the supply chain. For the future, this means far more attention has to be given to the way companies count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and intelligent rationing techniques in cases in which need can’t be met. Explicit prioritization is required to keep on to meet market expectations but in addition to improve market shares wherein competitors miss opportunities. This particular challenge is not new, but it has in addition been underexposed in this crisis and was frequently not part of preparatory activities.
Fourthly, the corona issues teaches us that the monetary result of a crisis in addition relies on the manner in which cooperation in the chain is set up. It is often unclear precisely how extra costs (and benefits) are distributed in a chain, in case at all.
Last but not least, relative to other purposeful departments, the operations and supply chain characteristics are in the driving accommodate during a crisis. Product development and marketing and advertising activities need to go hand in deep hand with supply chain activities. Whether the corona pandemic will structurally switch the traditional discussions between generation and logistics on the one hand and advertising and marketing on the other, the future will have to tell.
How is the Dutch meal supply chain coping during the corona crisis?