Supply chain – The COVID-19 pandemic has undoubtedly had its impact effect on the planet. health and Economic indicators have been affected and all industries have been completely touched within one way or even some other. Among the industries in which this was clearly obvious will be the farming as well as food business.
In 2019, the Dutch extension as well as food niche contributed 6.4 % to the yucky domestic product (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands dropped € 7.1 billion within 2020[1]. The hospitality trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant effects for the Dutch economy as well as food security as lots of stakeholders are impacted. Even though it was apparent to majority of people that there was a significant effect at the conclusion of the chain (e.g., hoarding doing grocery stores, restaurants closing) and at the beginning of the chain (e.g., harvested potatoes not searching for customers), you will find numerous actors inside the supply chain for that the impact is less clear. It is therefore important to find out how properly the food supply chain as a whole is actually armed to cope with disruptions. Researchers from the Operations Research as well as Logistics Group at Wageningen University and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around thirty Dutch source chain actors.
Demand within retail up, in food service down It’s evident and widely known that demand in the foodservice stations went down as a result of the closure of restaurants, amongst others. In a few cases, sales for vendors of the food service business therefore fell to aproximatelly twenty % of the initial volume. As a complication, demand in the retail stations went up and remained at a quality of aproximatelly 10-20 % greater than before the crisis began.
Goods that had to come via abroad had their very own issues. With the change in demand coming from foodservice to retail, the demand for packaging improved considerably, More tin, cup and plastic material was necessary for wearing in consumer packaging. As more of this product packaging material concluded up in consumers’ houses rather than in places, the cardboard recycling system got disrupted too, causing shortages.
The shifts in need have had a major impact on output activities. In some instances, this even meant a full stop in production (e.g. in the duck farming business, which emerged to a standstill as a result of demand fall out in the foodservice sector). In other instances, a big part 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 sparked the flow of sea bins to slow down pretty soon in 2020. This resulted in limited transport electrical capacity during the very first weeks of the crisis, and expenses which are high for container transport as a consequence. Truck transportation experienced different problems. To begin with, there were uncertainties regarding how transport will be handled for borders, which in the end weren’t as rigid as feared. What was problematic in many cases, however, was the availability of drivers.
The reaction to COVID 19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this core elements of supply chain resilience:
To us this framework for the assessment of the interview, the conclusions indicate that not many businesses had been well prepared for the corona crisis and in reality mostly applied responsive practices. Probably the most notable source chain lessons were:
Figure 1. 8 best methods for meals supply chain resilience
To begin with, the need to develop the supply chain for agility and versatility. This seems especially challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capability to do so.
Second, it was discovered that more interest was required on spreading risk and aiming for risk reduction in the supply chain. For the future, what this means is far more attention should be provided to the way organizations rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization and smart rationing techniques in cases where demand can’t be met. Explicit prioritization is actually needed to continue to satisfy market expectations but also to boost market shares where competitors miss options. This task isn’t new, though it’s in addition been underexposed in this crisis and was frequently not a part of preparatory pursuits.
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 usually unclear exactly how further costs (and benefits) are actually sent out in a chain, if at all.
Last but not least, relative to other functional departments, the businesses and supply chain characteristics are in the driving seat during a crisis. Product development and marketing activities have to go hand in hand with supply chain events. Whether the corona pandemic will structurally switch the basic considerations between logistics and creation on the one hand as well as marketing on the other, the future will need to tell.
How is the Dutch food supply chain coping throughout the corona crisis?
