How is the Dutch food supply chain coping throughout the corona crisis?
Supply chain – The COVID-19 pandemic has certainly had its impact impact on the world. health and Economic indicators have been affected and all industries have been touched in a way or even yet another. One of the industries in which this was clearly visible will be the farming and food industry.
In 2019, the Dutch extension and food industry contributed 6.4 % to the yucky domestic item (CBS, 2020). As per the FoodService Instituut, the foodservice business in the Netherlands shed € 7.1 billion in 2020. The hospitality industry 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 in the food chain have big effects for the Dutch economy and food security as many stakeholders are affected. Even though it was apparent to most individuals that there was a significant impact at the tail end of this chain (e.g., hoarding in supermarkets, eateries closing) as well as at the beginning of the chain (e.g., harvested potatoes not finding customers), you will find numerous actors inside the supply chain for that will the impact is much less clear. It’s therefore important to figure out how effectively the food supply chain as a whole is actually equipped to cope with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen University and from Wageningen Economics Research, led by Professor Sander de Leeuw, studied the effects of the COVID 19 pandemic throughout the food supplies chain. They based the examination of theirs on interviews with about 30 Dutch source chain actors.
Demand within retail up, contained food service down It’s obvious and widely known that demand in the foodservice stations went down on account of the closure of joints, amongst others. In a few instances, sales for suppliers of the food service industry as a result fell to about 20 % of the first volume. Being an adverse reaction, demand in the retail channels went up and remained within a quality of aproximatelly 10-20 % higher than before the problems began.
Products which had to come via abroad had their very own problems. With the change in demand from foodservice to retail, the need for packaging improved considerably, More tin, cup and plastic material was required for use in customer packaging. As much more of this particular product packaging material ended up in consumers’ homes instead of in places, the cardboard recycling function got disrupted as well, causing shortages.
The shifts in demand have had a big affect on production activities. In a few cases, this even meant the full stop in production (e.g. in the duck farming industry, which emerged to a standstill as a result of demand fall-out on the foodservice sector). In other instances, a significant section of the personnel contracted corona (e.g. in the meat processing industry), causing a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down pretty shortly in 2020. This resulted in restricted transport capacity during the very first weeks of the problems, and costs which are high for container transport as a direct result. Truck travel experienced various problems. Initially, there were uncertainties on how transport would be managed for borders, which in the end weren’t as stringent as feared. That which was problematic in cases which are most, however, was the accessibility of drivers.
The reaction to COVID-19 – deliver chain resilience The supply chain resilience analysis held by Prof. de Leeuw as well as Colleagues, was based on the overview of this primary elements of supply chain resilience:
To us this framework for the analysis of the interview, the findings indicate that not many organizations were well prepared for the corona problems and in reality mainly applied responsive practices. The most important supply chain lessons were:
Figure 1. Eight best practices for food supply chain resilience
To begin with, the need to design the supply chain for flexibility and agility. This appears particularly challenging for small companies: building resilience right into a supply chain takes attention and time in the organization, and smaller organizations often don’t have the capacity to do so.
Second, it was discovered that more attention was needed on spreading risk as well as aiming for risk reduction within the supply chain. For the future, this means far more attention has to be made available to the manner in which companies rely on specific countries, customers, and suppliers.
Third, attention is necessary for explicit prioritization as well as smart rationing strategies in cases in which need can’t be met. Explicit prioritization is necessary to keep on to satisfy market expectations but also to improve market shares wherein competitors miss options. This challenge isn’t new, though it has in addition been underexposed in this problems and was usually not a component of preparatory pursuits.
Fourthly, the corona crisis shows you us that the financial effect of a crisis additionally depends on the way cooperation in the chain is actually set up. It’s often unclear how further costs (and benefits) are actually sent out in a chain, in case at all.
Finally, relative to other functional departments, the operations and supply chain characteristics are actually in the driving accommodate during a crisis. Product development and advertising activities have to go hand deeply in hand with supply chain activities. Whether or not the corona pandemic will structurally replace the classic considerations between logistics and generation on the one hand as well as advertising on the other, the future must tell.
How’s the Dutch foods supply chain coping during the corona crisis?