Supply chain – The COVID-19 pandemic has certainly had the impact of its influence on the world. Economic indicators and health have been affected and all industries are touched in one of the ways or another. One of the industries in which this was clearly obvious is the farming and food business.
Throughout 2019, the Dutch agriculture as well as food sector 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 trade lost 41.5 % of the turnover of its as show by ProcurementNation, while at exactly the same time supermarkets increased the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have significant consequences for the Dutch economy as well as food security as many stakeholders are affected. Even though it was clear to most people that there was a huge effect at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) and at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors in the source chain for which the impact is much less clear. It is therefore vital that you determine how well the food supply chain as being a whole is actually armed to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University as well as coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the effects of the COVID-19 pandemic throughout the food supply chain. They based their examination on interviews with about 30 Dutch source chain actors.
Need in retail up, found food service down It is apparent and well known that need in the foodservice stations went down due to the closure of joints, amongst others. In some cases, sales for suppliers in the food service business as a result fell to about 20 % of the original volume. Being a side effect, demand in the retail channels went up and remained within a quality of aproximatelly 10 20 % greater than before the crisis began.
Goods that had to come through abroad had the own problems of theirs. With the change in demand coming from foodservice to retail, the requirement for packaging changed considerably, More tin, cup or plastic was required for wearing in customer packaging. As much more of this product packaging material ended up in consumers’ homes instead of in joints, the cardboard recycling system got disrupted also, causing shortages.
The shifts in desire have had a significant impact on output activities. In certain cases, this even meant a total stop of output (e.g. in the duck farming business, which came to a standstill on account of demand fall-out in the foodservice sector). In other instances, a major part of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea bins to slow down fairly soon in 2020. This resulted in transport electrical capacity that is restricted throughout the first weeks of the crisis, and expenses which are high for container transport as a direct result. Truck travel faced various problems. At first, there were uncertainties regarding how transport will be managed for borders, which in the long run weren’t as stringent as feared. What was problematic in many instances, nevertheless, was the availability of drivers.
The response to COVID 19 – supply chain resilience The source chain resilience evaluation held by Prof. de Leeuw and Colleagues, was based on the overview of this key components of supply chain resilience:
To us this particular framework for the evaluation of the interview, the findings indicate that few businesses were well prepared for the corona crisis and actually mainly applied responsive practices. The most important source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
For starters, the need to create the supply chain for versatility and agility. This looks especially complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the organization, and smaller organizations usually do not have the capacity to do it.
Second, it was found that more attention was needed on spreading risk as well as aiming for risk reduction in the supply chain. For the future, meaning more attention has to be provided to the manner in which organizations depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as intelligent rationing techniques in situations where demand can’t be met. Explicit prioritization is necessary to continue to meet market expectations but additionally to boost market shares where competitors miss opportunities. This task isn’t new, but it has in addition been underexposed in this specific problems and was frequently not a component of preparatory pursuits.
Fourthly, the corona issues shows you us that the economic impact of a crisis also is determined by the way cooperation in the chain is actually set up. It’s often unclear exactly how further expenses (and benefits) are sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain functionality are in the driving accommodate during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain activities. Regardless of whether the corona pandemic will structurally replace the basic discussions between generation and logistics on the one hand and advertising and marketing on the other hand, the future will need to explain to.
How is the Dutch food supply chain coping during the corona crisis?