Supply chain – The COVID-19 pandemic has undoubtedly had the impact of its effect on the planet. health and Economic indicators have been affected and all industries have been touched in one way or some other. One of the industries in which this was clearly visible would be the agriculture and food business.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 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 of the food chain have significant consequences for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was clear to most folks that there was a huge impact at the tail end of the chain (e.g., hoarding around food markets, eateries closing) and at the start of this chain (e.g., harvested potatoes not finding customers), there are numerous actors inside the supply chain for which the effect is much less clear. It’s therefore vital that you determine how well the food supply chain as a whole is equipped to cope with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen University and also out of 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 thirty Dutch source chain actors.
Demand within retail up, found food service down It is evident and widely known that need in the foodservice channels went down on account of the closure of places, amongst others. In certain instances, sales for vendors in the food service industry therefore fell to about twenty % of the initial volume. As a complication, demand in the retail stations went up and remained at a degree of aproximatelly 10-20 % higher than before the problems started.
Goods that had to come from abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic material was necessary for use in consumer packaging. As much more of this particular product packaging material ended up in consumers’ houses rather than in joints, the cardboard recycling process got disrupted also, causing shortages.
The shifts in need have had an important affect on production activities. In some instances, this even meant a total stop in production (e.g. within the duck farming industry, which emerged to a standstill due to demand fall out on the foodservice sector). In other instances, a big part of the personnel contracted corona (e.g. in the meat processing industry), leading to 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 pretty shortly in 2020. This resulted in limited transport capability during the very first weeks of the crisis, and expenses that are high for container transport as a consequence. Truck transportation faced different problems. To begin with, there were uncertainties about how transport would be managed at borders, which in the long run were not as strict as feared. That which was problematic in situations which are a large number of, nonetheless, was the availability of drivers.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Colleagues as well as Leeuw, was used on the overview of the key things of supply chain resilience:
To us this particular framework for the evaluation of the interviews, the findings show that few businesses had been well prepared for the corona crisis and in fact mainly applied responsive methods. The most important source chain lessons were:
Figure one. Eight best methods for food supply chain resilience
First, the need to create the supply chain for agility as well as versatility. This seems particularly challenging for smaller companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capacity to do it.
Second, it was found that much more attention was needed on spreading danger and aiming for risk reduction inside the supply chain. For the future, this means more attention has to be made available to the way organizations count on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as intelligent rationing techniques in cases where need can’t be met. Explicit prioritization is required to continue to satisfy market expectations but also to increase market shares where competitors miss opportunities. This particular task isn’t new, however, it has additionally been underexposed in this specific crisis and was often not part of preparatory activities.
Fourthly, the corona problems teaches us that the financial impact of a crisis in addition relies on the way cooperation in the chain is set up. It’s usually unclear how additional costs (and benefits) are sent out in a chain, in case at all.
Finally, relative to other purposeful departments, the operations and supply chain functionality are in the driving accommodate during a crisis. Product development and marketing activities need to go hand in deep hand with supply chain pursuits. Whether the corona pandemic will structurally change the traditional discussions between production and logistics on the one hand and marketing on the other, the future will have to explain to.
How’s the Dutch meal supply chain coping during the corona crisis?