How is the Dutch food supply chain coping throughout the corona crisis?
Supply chain – The COVID-19 pandemic has definitely had its impact impact on the world. health and Economic indicators have been affected and all industries have been completely touched within one of the ways or yet another. Among the industries in which it was clearly apparent would be the agriculture and food business.
Throughout 2019, the Dutch extension as well as food sector contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands shed € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover 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 major consequences for the Dutch economy as well as food security as a lot of stakeholders are affected. Even though it was apparent to many individuals that there was a great impact at the tail end of the chain (e.g., hoarding doing food markets, restaurants closing) as well as at the start of this chain (e.g., harvested potatoes not searching for customers), you will find many actors within the supply chain for that the effect is much less clear. It is thus important to determine how effectively the food supply chain as a whole is actually armed to deal with disruptions. Researchers in the Operations Research as well as Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the influences of the COVID 19 pandemic throughout the food supplies chain. They based their examination on interviews with around 30 Dutch supply chain actors.
Need within retail up, contained food service down It’s obvious and well known that demand in the foodservice channels went down on account of the closure of places, amongst others. In certain cases, sales for vendors of the food service industry thus fell to about twenty % of the initial volume. As an adverse reaction, demand in the list stations went up and remained at a quality of aproximatelly 10 20 % higher than before the problems started.
Goods that had to come through abroad had their own problems. With the shift in need coming from foodservice to retail, the need for packaging changed dramatically, More tin, glass and plastic material was necessary for use in buyer packaging. As much more of this product packaging material concluded up in consumers’ houses as opposed to in restaurants, the cardboard recycling process got disrupted too, causing shortages.
The shifts in desire have had a significant affect on production activities. In some cases, this even meant a complete stop of output (e.g. within the duck farming business, which emerged to a standstill on account of demand fall out in the foodservice sector). In other instances, a significant portion of the personnel contracted corona (e.g. to the meat processing industry), resulting in a closure of equipment.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China caused the flow of sea containers to slow down pretty soon in 2020. This resulted in transport capability which is restricted throughout the first weeks of the problems, and costs which are high for container transport as a consequence. Truck travel experienced various problems. At first, there were uncertainties about how transport will be managed at borders, which in the long run were not as strict as feared. That which was problematic in many situations, however, was the availability of drivers.
The response to COVID-19 – deliver chain resilience The source chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of this primary elements of supply chain resilience:
To us this particular framework for the evaluation of the interview, the findings indicate that not many organizations had been well prepared for the corona problems and actually mostly applied responsive methods. The most notable supply chain lessons were:
Figure 1. Eight best methods for meals supply chain resilience
For starters, the need to design the supply chain for flexibility and agility. This seems particularly complicated for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations often don’t have the capability to do it.
Next, it was observed that much more attention 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 provided to the way companies depend on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as clever rationing techniques in cases in which need cannot be met. Explicit prioritization is actually needed to continue to satisfy market expectations but in addition to increase market shares where competitors miss opportunities. This particular challenge is not new, but it’s additionally been underexposed in this problems and was frequently not a part of preparatory activities.
Fourthly, the corona issues shows you us that the monetary effect of a crisis in addition is determined by the way cooperation in the chain is set up. It is typically unclear exactly how further costs (and benefits) are actually sent out in a chain, if at all.
Lastly, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and marketing activities need to go hand in hand with supply chain activities. Whether the corona pandemic will structurally change the classic discussions between logistics and generation on the one hand and marketing and advertising on the other hand, the future will have to explain to.
How’s the Dutch foods supply chain coping during the corona crisis?