Supply chain – The COVID-19 pandemic has definitely had its impact impact on the world. Economic indicators and health have been compromised and all industries are touched in a way or yet another. One of the industries in which it was clearly visible will be the agriculture as well as food industry.
In 2019, the Dutch extension and food niche contributed 6.4 % to the gross domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion within 2020. The hospitality business lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets enhanced their turnover with € 1.8 billion.
Disruptions in the food chain have big effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Even though it was clear to a lot of men and women that there was a significant impact at the conclusion of this chain (e.g., hoarding around supermarkets, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the source chain for that will the effect is less clear. It is thus imperative that you find out how effectively the food supply chain as a whole is actually prepared to cope with disruptions. Researchers from your Operations Research as well as Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID-19 pandemic all over the food supply chain. They based their analysis on interviews with around 30 Dutch source chain actors.
Need in retail up, found food service down It is obvious and popular that need in the foodservice channels went down due to the closure of places, amongst others. In a few instances, sales for suppliers in the food service business thus fell to about twenty % of the original volume. Being a side effect, demand in the retail stations went up and remained within a level of aproximatelly 10-20 % higher than before the problems started.
Products which had to come from abroad had the own problems of theirs. With the shift in demand coming from foodservice to retail, the requirement for packaging improved dramatically, More tin, glass or plastic was necessary for wearing in customer packaging. As more of this particular packaging material concluded up in consumers’ homes rather than in restaurants, the cardboard recycling system got disrupted as well, causing shortages.
The shifts in desire have had a major effect on production activities. In some cases, this even meant a complete stop in output (e.g. within the duck farming business, which emerged to a standstill on account of demand fall-out inside the foodservice sector). In other cases, a big portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The start of the Corona crisis of China caused the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capacity which is limited during the first weeks of the problems, and costs that are high for container transport as a result. Truck travel encountered various issues. To begin with, there were uncertainties about how transport would be managed at borders, which in the long run were not as stringent as feared. The thing that was problematic in situations which are many, nonetheless, was the availability of motorists.
The reaction to COVID-19 – provide chain resilience The supply chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was based on the overview of the key elements of supply chain resilience:
Using this framework for the evaluation of the interview, the conclusions indicate that not many businesses had been well prepared for the corona crisis and in fact mostly applied responsive practices. The most important source chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for versatility as well as agility. This looks particularly challenging for smaller companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations oftentimes do not have the potential to do it.
Next, it was found that more interest was necessary on spreading risk as well as aiming for risk reduction within the supply chain. For the future, meaning far more attention should be given to the manner in which businesses depend on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and intelligent rationing techniques in situations where need cannot be met. Explicit prioritization is actually required to keep on to meet market expectations but in addition to improve market shares where competitors miss options. This task is not new, though it has in addition been underexposed in this crisis and was usually not part of preparatory pursuits.
Fourthly, the corona problems shows us that the economic result of a crisis additionally is determined by the manner in which cooperation in the chain is set up. It is often unclear how further expenses (and benefits) are actually sent out in a chain, if at all.
Finally, relative to other purposeful departments, the operations and supply chain operates are 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. Regardless of whether the corona pandemic will structurally switch the basic discussions between logistics and creation on the one hand and advertising and marketing on the other, the long term must explain to.
How is the Dutch foods supply chain coping throughout the corona crisis?