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 touched inside a way or another. Among the industries in which this was clearly apparent would be the farming and food business.
In 2019, the Dutch extension as well as food industry contributed 6.4 % to the yucky domestic product (CBS, 2020). According to the FoodService Instituut, the foodservice business 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 in the food chain have major effects for the Dutch economy as well as food security as a lot of stakeholders are affected. Despite the fact that it was clear to numerous men and women that there was a great impact at the conclusion of the chain (e.g., hoarding around food markets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors within the supply chain for which the effect is much less clear. It’s thus important to find out how properly the food supply chain as being a whole is armed to deal with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University as well as from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID-19 pandemic all over the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Need in retail up, in food service down It is apparent and well known that need in the foodservice channels went down as a result of the closure of places, amongst others. In certain cases, sales for suppliers of the food service business as a result fell to aproximatelly 20 % of the first volume. Being a side effect, demand in the list stations went up and remained at a degree of about 10-20 % higher than before the problems began.
Products which had to come via abroad had their very own problems. With the shift in need coming from foodservice to retail, the need for packaging improved dramatically, More tin, glass or plastic was required for use in customer packaging. As more of this product packaging material concluded up in consumers’ houses instead of in joints, the cardboard recycling process got disrupted as well, causing shortages.
The shifts in need have had a significant impact on production activities. In certain cases, this even meant the full stop in production (e.g. within the duck farming industry, which arrived to a standstill as a result of demand fall-out in the foodservice sector). In other situations, a major section of the personnel contracted corona (e.g. in the meat processing industry), resulting in a closure of facilities.
Supply chain – Distribution activities were also affected. The beginning of the Corona crisis in China sparked the flow of sea canisters to slow down fairly soon in 2020. This resulted in transport capability that is limited during the earliest weeks of the issues, and expenses that are high for container transport as a result. Truck travel encountered different issues. Initially, there were uncertainties on how transport would be managed at borders, which in the long run were not as strict as feared. What was problematic in situations which are many, nevertheless, was the accessibility of drivers.
The response to COVID 19 – deliver chain resilience The source chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of the main things of supply chain resilience:
Using this particular framework for the evaluation of the interviews, the conclusions show that few organizations had been well prepared for the corona crisis and actually mainly applied responsive practices. Probably the most important supply chain lessons were:
Figure 1. Eight best methods for food supply chain resilience
To begin with, the need to design the supply chain for agility as well as versatility. This appears especially 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 capability to accomplish that.
Second, it was discovered that more interest was needed on spreading risk as well as aiming for risk reduction within the supply chain. For the future, meaning more attention has to be given to the manner in which businesses depend on specific countries, customers, and suppliers.
Third, attention is needed for explicit prioritization and clever rationing strategies in situations where demand can’t be met. Explicit prioritization is needed to continue to satisfy market expectations but additionally to improve market shares where competitors miss options. This task isn’t new, however, it has additionally been underexposed in this problems and was often not part of preparatory activities.
Fourthly, the corona problems shows us that the monetary impact of a crisis in addition depends on the manner in which cooperation in the chain is actually set up. It is often unclear how additional costs (and benefits) are actually sent out in a chain, in case at all.
Last but not least, relative to other functional departments, the operations and supply chain characteristics are actually in the driving seat during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the basic discussions between logistics and creation on the one hand as well as marketing and advertising on the other, the future must tell.
How is the Dutch foods supply chain coping during the corona crisis?