Supply chain – The COVID-19 pandemic has certainly had its impact impact on the planet. Economic indicators and health have been compromised and all industries have been touched within a way or perhaps another. Among the industries in which it was clearly apparent is the agriculture and food industry.
Throughout 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 lost € 7.1 billion inside 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are impacted. Though it was clear to many folks that there was a big impact at the tail end of the chain (e.g., hoarding around supermarkets, eateries closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), there are many actors inside the source chain for which the effect is much less clear. It’s therefore vital that you determine how effectively the food supply chain as being a whole is actually armed to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and also out of Wageningen Economics Research, led by Professor Sander de Leeuw, studied the consequences of the COVID-19 pandemic all over the food supplies chain. They based their analysis on interviews with about thirty Dutch supply chain actors.
Need in retail up, contained food service down It is obvious and widely known that demand in the foodservice stations went down due to the closure of places, amongst others. In certain cases, sales for vendors in the food service business as a result fell to about 20 % of the first volume. As a complication, demand in the retail stations went up and remained within a quality of aproximatelly 10-20 % greater than before the problems started.
Products that had to come from abroad had the own issues of theirs. With the change in desire coming from foodservice to retail, the requirement for packaging improved considerably, More tin, glass or plastic material was necessary for wearing in buyer packaging. As much more of this particular product packaging material ended up in consumers’ houses as opposed to in restaurants, the cardboard recycling system got disrupted too, causing shortages.
The shifts in demand have had a big impact on output activities. In a few instances, this even meant a full stop of output (e.g. within the duck farming industry, which emerged to a standstill as a result of demand fall out inside the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea containers to slow down fairly shortly in 2020. This resulted in transport capability which is limited throughout the first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transport experienced different issues. Initially, there were uncertainties on how transport will be managed at borders, which in the long run weren’t as strict as feared. What was problematic in situations which are a large number of, nonetheless, was the accessibility of motorists.
The reaction to COVID-19 – supply chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was used on the overview of the key elements of supply chain resilience:
Using this framework for the analysis of the interviews, the findings indicate that not many businesses were well prepared for the corona problems and in fact mostly applied responsive methods. The most notable source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to develop the supply chain for flexibility and agility. This looks particularly complicated for smaller companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations oftentimes don’t have the capacity to do so.
Next, it was observed that much more interest was needed on spreading risk and aiming for risk reduction inside the supply chain. For the future, this means far more attention ought to be provided to the manner in which organizations count on suppliers, customers, and specific countries.
Third, attention is necessary for explicit prioritization and clever rationing techniques in situations where need can’t be met. Explicit prioritization is necessary to continue to satisfy market expectations but also to improve market shares in which competitors miss options. This particular task is not new, though it has in addition been underexposed in this problems and was usually not part of preparatory pursuits.
Fourthly, the corona problems shows us that the economic result of a crisis additionally depends on the manner in which cooperation in the chain is set up. It’s typically unclear exactly how additional costs (and benefits) are distributed in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain functionality are actually in the driving accommodate during a crisis. Product development and advertising and marketing activities need to go hand deeply in hand with supply chain activities. Whether the corona pandemic will structurally replace the classic discussions between generation and logistics on the one hand as well as marketing on the other, the future must tell.
How’s the Dutch meal supply chain coping during the corona crisis?