U.S. consumers are spoiled by all the choices their neighborhood grocery stores give them. Shamefully, too much produce is also spoiled before it even makes it to those stores. We don't see that spoilage because it happens further up the supply chain—mostly on the road.
Food spoilage in global supply chains totals more than $35 billion a year, according to Forbes magazine. That news is hard to take considering all the people in this country who either can't afford or don't bother looking for nutritious, fresh food. Part of the problem is growers who can't afford or don't bother looking for answers as to why a lot of their products don't make it to their destinations with much shelf life left in them.
Logistics technology is being developed to address this issue, but for it to be effective, logistics managers in the food chain need to appreciate its importance beyond the cost. It's actually a matter of competitiveness.
I spoke with Peter Mehring about this issue recently in advance of the release of a new system that he says will give food producers and their retailer customers access to data that will help them make better decisions about how food travels in their chains. Mehring is director and CEO of Intelleflex, a company that provides a cellular reader (called the CMR-6100) and data services (called “Zest”) to help managers capture and share information about the condition and location of their products. By enabling location-based, time-stamped data to be available at various points along the chain, Mehring hopes there will be a change in mindset about technology, from monitoring for possible spoilage to improving the delivered freshness and quality of the product.
“Many see traceability as overhead, they don't see any direct value to their company,” he told me. “Even the largest growers, you'd think they had some brand value to protect yet they think they do a good enough job of it anyway.”
That problem multiplies as supply chains go global.
“To supply the same products year round they have international farms under their direction,” he added. “The infrastructure at those locations isn't up to what is available in the U.S., so even if they wanted to do traceability it's very expensive because they have to update the pack houses in remote locations and they don't see the value in doing that.”
He believes getting actionable knowledge of conditions in the food chain can actually help pay for the technology that enables it. The secret is in knowing how fresh product is at a certain point so that shelf life can be assessed. Freshness can't be determined only at the field. It must be assessed along the journey to the consumer. Mehring says growers are often surprised by how much shrink they really suffer on that journey.
“They might have thought their internal shrink was 1-2% and now with this kind of visibility they're really seeing it's 7-8%,” he said. “Having that much extra product to deliver freshly pays for the whole system. Up to a third of fresh produce isn't sold at full value because it's expiring before they expect it to.”
These multi-protocol RFID readers incorporate a cellular modem and GPS capabilities, enabling machine-to-machine communication via global cellular networks. The information is time-stamped at each location and read into the tag on the palletload. By the time the tag gets to each delivery point it delivers the product's traceability history. But again, the real value of visibility is being able to take action.
“If we can tell them before they put the product on a truck that they shouldn't put it on a five-day trip but they could put it on a two-day trip or deliver it locally, that kind of information pays for itself in a single harvest season, just based on the increased post harvest yield they get,” he concluded.
Increasing yields to end spoilage would be a great next step for producers in the bountiful food chains of the United States. The next step after that needs to be finding innovative ways to collaborate with each other and with local food banks to help replenish the shelves of consumers struggling with yield issues of their own.