Many of us have been told something like “Today you saved $12!” as the clerk hands us our receipt at the grocery store. It’s great to know that you saved money by essentially doing something you were already going to do anyway – shop for groceries.
Recent advancements in cold supply chain temperature monitoring and management solutions, offer growers, shippers and retailers a similar benefit. Without significant changes in your cold chain processes, you can save money – money that positively impacts your bottom line beginning on Day 1.
How Much Did You Lose Today?
Though saving money feels like a win, what should really get our attention is considering how much money is being lost today in the cold supply chain. Every day retailers are flushing tens of thousands of dollars or more away as they needlessly waste produce due to spoilage. Spoilage happens as a result of improper temperature and cold supply chain management. Why? Because retailers lack the data about the produce’s condition and remaining shelf-life as it travels from harvest to store.
Much of this loss is preventable by implementing pallet-level temperature management within the cold supply chain. Having data and insights about the condition of produce at the pallet level as it moves through the cold supply chain helps to ensure delivered freshness, reduce waste and improve revenues and profitability. (And, as an added bonus, retailers can address traceability and compliance simultaneously at no extra charge.)
The Value of Pallet-level Monitoring
The impact of temperature is perhaps the biggest enemy of produce, yet the temperature and time from harvest-to-cool are common variables which traditionally are NOT monitored on an individual pallet basis. However, both temperature and the amount of time spent at that temperature significantly affect each pallet differently and this variation directly impacts the bottom line. It’s all in the data. We’ve done numerous studies that show that there is significant shelf-life variability between pallets harvested on the same day from the same location – often many days – due to variations in harvest, handling and processing. This is why “harvest dates” are not good indicators of shelf-life. But, when there is useful data – and the tools to interpret it – innovative retailers and food industry leaders can implement an intelligent supply chain.
First In, First Out Leads to Waste
Throughout the cold chain, because there is generally no data to indicate otherwise, produce is processed, palletized and shipped primarily on a First-In-First-Out (FIFO) basis, mixing variable shelf-life fruits and vegetables together. This leads to losses that become visible only later in the cold supply chain, typically at the retailer or with the consumer. The reality is that the normal quality control visual inspection process is not adequate to see the “invisible” shelf life loss introduced earlier in the cold supply chain. Shrink isn’t visible, data is needed to have an accurate view into a the condition of the produce.
If shrink cannot be seen, it poses a challenge in reducing it if the food industry relies solely on visual inspection to determine quality, routing and shipping. An ineffective quality control strategy is going to introduce unnecessary waste into cold supply chain processes. This waste occurs at every step of the cold supply chain, from the field to the retailer.
Without pallet-level temperature monitoring, growers, distributors and retailers don’t know if the produce has been properly pre-cooled. Without creating pallet-level temperature visibility throughout the cold supply chain, it is impossible to determine where the true cause of shrink occurred, so it can’t be addressed, fixed or avoided in the future. This affects more than just the profit on any given load, it also affects quality, customer satisfaction, brand image, demand and food safety.
Freshness Management, FEFO and the Cold Supply Chain
Using freshness management supply chain solutions, the food industry can know in real-time the dynamic remaining shelf life of produce on a pallet-by-pallet basis. This enables a First Expired, First Out (FEFO) approach to supply chain management. Move the produce with the shortest amount of shelf-life first, while ensuring it has enough shelf-life to meet the customer’s needs. This approach ensures delivered freshness, reduces waste and improves profitability. Read more about how much you could save everyday in Today You Saved.
A Great Payback
The real beauty of this approach is that the money saved in waste reduction more than pays back the investment in a freshness management solution – on average about ten cents on the dollar. If your bottom line matters, then that’s a pretty good ROI and money back in your pocket that you can invest in improving and differentiating your business.