Tuesday, February 12, 2013

TTI determines perishable inventory

Perishable inventory management is the most complex in retail system because it involves installation of special equipment (storage conditions and transport) in order to preserve their freshness. When these items move into supply chain cycle, the temperature conditions may change. Every product has its time of microbial development which tells its expected lifetime and change in temperature may increase the microbial development and reduce the lifetime of product. Freshness is determined by lifetime of product, and the item is considered unfit for consumption once it reaches its lifetime.

In order to address the inconsistent temperature conditions, manufacturers take a big margin of precaution in product’s lifetime calculation. Use by date or expiry date is determined from product’s lifetime that is then printed on packaging for consumers.

As an example above, the expected product’s lifetime is equal to 10 days in the consistent conditions but the expiry date that is printed on packaging may depend on the margin of precaution. Changing conditions may make the product unusable before 10 days time for which the chances of occurrence are 40% in this example. So to avoid the risk manufacture may increase safety margin. It’s a strategic decision. To remain 97% safe manufacture can set 5 days for lifetime period and further, to be 100% safer a life time of 3 will be set in this example. Products are disposed once the lifetime is reached and supply chain actors like manufacturers, distributers, suppliers and retailer negotiate on the level of inventory stocks and losses.

The purpose of expiry date is to ensure the consumer safety. However the products might be equally good for consumption even after the expiry date. So the opportunity of selling these items is lost. A technological solution that can determine the shelf life of perishable items would be beneficial.  

Time Temperature Integrator technology (TTIs) has been developed to determine the effective shelf life of perishable items by keeping track of time temperature history. There are two types of TTIs being used commercially.

Type 1
“TTI type 1 technology is a sensor that simulates in real time the biological quality of products and provides binary information regarding the freshness by changing color irreversibly once a pre-specified level of microbial rate is reached. This technology is used with the use by date label affixed to product’s packaging. The use by date is necessary because of the legislative rules and provides information for the FIFO issuing.”1

Above Enzymatic TTI is an example of type 1 TTI which is based on a color change caused by a pH decrease which is the result of a controlled enzymatic hydrolysis of a lipid substrate.2

Type 2
In second type the biological quality sensors are combined with an RFID tag which gives information on item’s remaining shelf life. First RF (Radio Frequency) reader captures the timing temperature variations that affect the freshness of products and then shelf life is predicted based on microbiological models.

The VarioSens label of KSW microtec Company is an example of TTI type 2.2

The benefit of TTI technologies is its flexibility. Adhesive labels, different in sizes and designs can be printed and put on the package. The process can easily be incorporated into existing product’s packaging systems.

Further type 1 TTIs are more understandable for consumers. Type 2 TTIs are beneficial as they can automate the stock reorder time and quantity which reduces the losses from expired items and cost of maintenance.

The question is whether it is the cost effective method of determining the stock life time. What will happen to the prices of everyday inexpensive perishable items e.g. milk when this technology is used?

1. http://tel.archives-ouvertes.fr/docs/00/71/14/76/PDF/kouki_arch.pdf
2. http://ccm.ytally.com/fileadmin/user_upload/downloads/Presentation/2_1_Taoukis.pdf

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