Monday, October 1, 2012

Farm-to-Fork Challenges in the Produce Industry

We all love to grab a quick bite between classes from Maximum Flavors pizza restaurant, but I have never thought much about the logistics that go behind acquiring the ingredients to prepare the pizza. Restaurant businesses face several challenges while trying to procure the raw materials to prepare dishes. From the consumer side, the dishes being served need to be tasty, fresh, and full of flavor. All the aforementioned criteria can be met providing the vegetables and meat that are highly perishable in nature are used before their shelf life expires. Perishable goods however must go through several stages in a supply chain from the farmer to the consumer which is a great challenge for suppliers. The following picture very clearly highlights these challenges.

From the above picture[1], we can tell that the challenges span sourcing the ingredients from various locations, packaging them and transporting them by their usability date. In addition, there are licensing, pricing, transportation, etc that also add a significant burden of delivery to suppliers. Several innovative technology solutions have been implemented to overcome the challenges.

FoodLink[2] provides a platform for suppliers to connect with the market to accelerate the buying and selling process of perishable goods. It provides a transparent way in which retailers such as Giant Eagle, Marianos, Costco, etc can connect with Doles, Driscoll's etc. to buy perishable goods. From a retailers perspective, it gives them access to various suppliers with price information that allows the retailers to make smart decisions in a fast manner. It also reduces the error rates since FoodLink ensures the quality of the product being bought along with any additional auditory regulations that the company may have. FoodLink smartly uses data to help reduce waste by warning about out-of-stock inventory status ahead of time.
From a suppliers perspective, the suppliers are able to save time and money since the order management process is now automated requires no IT investment as such from the supplier. FoodLink tracks orders closely ensuring payments happen on time thus helping the suppliers build strong relationships with the retailers by providing quality products and receiving payments on time.

Intelleflex[3] is another company that uses RFID tags to measure the quality of the product being delivered to the consumer. The tags constantly measure the temperature of the produce on-demand during the transportation phase of the supply chain to ensure that when the produce is finally delivered, its shelf life can be appropriately determined to manage inventory, ensure the quality regulations are being met and the safety of customers is ensured. This solution goes a long way in handling the transportation challenge and providing greater visibility into the quality of the produce.

The next time you go to Giant Eagle or buy a pizza slice, think about how the logistics of the perishable goods industry is managed from the farmer to the consumer. What makes organic produce different from the rest? It is common knowledge that perishable produce suppliers come up with different techniques to artificially increase the shelf life of the produce thus compromising the quality of the product. Would you be willing to pay more if you knew that your groceries were not being tampered with and went through careful quality inspection before getting on the shelf at the grocery store?

[1]: Food For Thought: Part One - Challenges in the Produce Supply Chain
[2]: FoodLink
[3]: Intelleflex

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.