Wednesday, September 17, 2014

Inventory Management of Perishable Items

Managing inventory successfully is the key to keep up with the competition in the market. An efficient inventory management is necessary to keep up with customer demand and also to guard against the fluctuations in the market demand. The conventional assumption made with respect to inventory management is that products can be stored indefinitely. But this assumption does not hold true for perishable products. This is because the perishable items lose their value over the period of time. The utility of the perishable items is determined by their shelf lives. This limited lifetime of the perishable products contribute to a large extent to the complexity of their management. Also there are other factors such as temperature which cause these items to change their lifetime. The products may leave the producers with a certain lifetime, but may have a different lifetime when they reach the retailers.
          In grocery 19% of the losses are due to product expiration.[i] This is mainly due to the different lifetimes of different products. The inventory management systems in place for the non perishable items cannot be used for the perishable items for the same reasons. Manufacturers, distributors and retailers have a common objective of selling fresh products to the customers in order to maintain customer satisfaction. To assess the freshness level of the product, an emerging intelligent technology such as Time Temperature Integrators (TTIs) can be used.

TTI Type 1 Technology

This technology uses a sensor that simulates the real time biological quality of a product by determining the microbial activity. It gives a binary result indicating the freshness of a product. The sensor changes color irreversible once a specified level of microbial rate is reached, indicating that the product has turned stale or is no longer fresh. This technology is mainly used in putting the “use by” labels. Checkpoint and eO devices represented in figure1 and figure2 commercialized by Vitsab and Cryolog respectively, are among the examples of TTI type1.

Figure1: Example of TTI type-1 Vitsab
Figure2: Example of TTI type-1 Cryolog

Once the maximum microbial activity is reached, and the color is changed, the product is removed from the shelf.

TTI Type 2 Technology

This sensor is coupled with a Radio Frequency Identification tag. It gives the items remaining shelf life. It captures the timing temperature variations that affect the freshness of the products by a Radio Frequency reader. Once the time-temperature history is known, then the shelf life is predicted based on the microbiological models. Figure3 shows the VarioSens label of KSW microtec company. This technology is used without the “use by” labels.

Figure3: TTI type-2

As the remaining shelf life is predicted by this technology, it becomes easier for the retailers to estimate the time when the product should be taken off the shelf and the shelf be restocked.
Having considered the uses of these technologies one question arises regarding the usage of sensors. The sensors are placed on the outer surface of the products to capture the temperature changes. This exposes them to extreme conditions than to which the product is exposed. Hence the estimates given by these sensors are not accurate for the life of the product. How do we account for this inaccuracy?

References :

[i] Kouki, ChaMichel Gourgandaben, Jean-Claude Hennet, Maria Di Mascolo, Yves Dallery, Evren Sahin, and Zied Jemai. "Perishable Items Inventory Management and the Use of Time Temperature Integrators Technology." GRADE DE DOCTEUR (2012): n. pag. Web.,d.aWw

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