Big Data in the Supply Chain? Why?

There's big benefits associated with Big Data

There’s big benefits associated with Big Data

Big Data is one of the hottest topics in business today. Companies in the financial, insurance, retail and a host of other industries are quickly realizing that the vast amounts of data being captured and collected can be of incredible strategic value to their business operations. The same holds true in the cold supply chain where literally hundreds of thousands of temperature, condition, waypoint and production data points can be collected for a single shipment.

But what can you do with this data and how do you make sense of it?

Making sense of it requires the ability to sift through the data to identify areas that require specific (and occasionally) immediate attention and essentially archiving and analyzing the rest of the data later to spot macro trends. Fortunately that technology exists to do this. When you identify events or issues that require immediate attention you can focus supply chain personnel’s attention directly on addressing those issues and event. For example, if a pallet of fruit or meat was left sitting on a loading dock, a temperature monitor can identify the issue and, via a reader connected to a cloud-based data service, can then notify a dock worker to collect that pallet and re-chill it immediately resulting in less waste, better quality and cost savings.

Where does the supply chain stand on Big Data?

EyeForTransport, a UK-based provider of business intelligence and C-level networking for the transport, logistics and supply chain industry, recently published their Supply Chain Big Data Report for 2013 (you can get a copy by filling out a form here), along with an accompanying infographic. The report, based on their survey done in February of this year with companies worldwide, reveals some interesting insights.

  • 84% of supply chain executives that think big data will have an impact on their company’s performance.
  • Over 61% of the supply chain executives said they were currently implementing 27.4% or considering (33.7%) implementing a big data analytics project.
  • When asked to rank leaders in the field, nearly 45% cited retailers and over 22% cited consumer goods manufacturers.

Why do so many supply chain executives think so much of Big Data? The top answer: to increase supply chain visibility.  Supply chain visibility means reducing costs (and improving efficiencies).  Respondents also said that they want to move away from making decisions using historical data and move towards real-time decision making.

One last interesting take-away: According to the EyeForTransport survey, of those executives currently implementing Big Data solutions, two thirds of those surveyed expect to see ROI on the project within 12 months.  That’s impressive. There’s that much value in the data and having the ability to improve supply chain visibility and real-time decision making.

Kevin Payne
Senior Director of Marketing

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Food Security: Is it Really About Production?

Maybe production isn't the issue

Maybe production isn’t the issue

A colleague recently sent me a link to an interesting blog Open the Echo Chamber with a recent post by Edward Carr titled Doing Food Security Differently – Theme 1: Get Over Production. The main gist of the blog post has to do with feeding a growing global population.  There are two basic ways to feed an increasing global population:

  1. Produce more food.
  2. Waste less food.

Most commentators tend to focus on finding new technology and tools that will help us produce more food, more efficiently. As I’ve blogged about before, people tend to forget about the second option: finding ways to maximize post-harvest yield and waste less.  (We waste between $35 and $400 or so billion of food each year, depending on which source you cite.)

Carr’s blog post makes the point that production isn’t the issue and that we are already producing more than enough food to feed a growing planet and that we should instead focus our resources on the fact that we waste too much.  Some interesting comments in his blog post:

  • Every year, the Earth produces roughly twice the calories needed to feed every single human being.
  • There is no unavoidable global shortage that creates famine and hunger. Nor, in fact, are we likely to be looking at a global food shortage any time soon.
  • There is less excess marketable supply than ever before.  Note that there is less excess marketable supply – this is the amount of food we produce that actually reaches market, not the total amount of food grown and raised each year.

In Carr’s opinion:

The simple point here is that these trends are manageable if we can get over the idea of food security as a question of production. [Emphasis added.] The idea of scarcity is perhaps the biggest challenge we face in addressing the world’s food needs.  As long as food security policy and programs remain focused on solving scarcity, food security will remain focused on technical fixes for hunger: greater technology, greater inputs, greater efficiency.

Carr then adds:

Simply put, it is cheaper and easier to enhance agricultural extension to improve local food storage techniques, build and maintain good roads, and improve electrical grids and other parts of the cold chain that preserves produce from farm to market than it is to completely reengineer an agricultural ecology.  [Emphasis added.] It makes far more sense to make basic infrastructural investments than it does to tether ever more farmers to inputs that require finite fossil fuel and mineral resources.  It makes more sense to better train farmers in storing what they already produce in a manner that preserves more of the harvest than it does to invest billions in the modification of crops, especially when the bulk of genetic modification in agriculture these days is defensive – that is, guarding against future yield loss, not enhancing yields in the present.

I’m glad to see that I’m not the only one that sees reducing waste as an area where we should focus our attention. The technology exists for us to significantly reduce waste and get more fresh food to the consumer.  (And, yes, I believe our temperature monitors and ZEST Data Services are a part of this solution.) Yet the industry seems bent on the idea that billions of dollars of waste is an acceptable and unavoidable cost of doing business. It simply isn’t true.

Kevin Payne
Senior Director of Marketing

Invisible Shrink: Better Check that Fuel Gauge!

Shipping produce without knowing its relative remaining shelf life is like flying a plane without a fuel gauge

Shipping produce without knowing its relative remaining shelf life is like flying a plane without a fuel gauge

Ron Pelger, a former director of produce operations in retail grocery, recently wrote an article in The Produce News titled In the Trenches: Are you overlooking invisible shrink?  I’ve commented on this issue of identifying where shrink or waste occurs in the cold chain before but Ron, as a former “trench worker” brings a fresh perspective on the subject.

He writes: Whenever a produce manager was questioned about his or her shrink, the response usually was, “I don’t know where our shrink is occurring. I have a good staff and we faithfully follow all the company shrink programs. The numbers have to be wrong.

Well, the numbers probably aren’t wrong and there may be great shrink control programs in place.  The problem lies in that too many people think that shrink begins at the store.

Ron raises some key points:

  1. The produce industry is muddled in its means of arriving at where exactly shrink originates.
  2. Retail companies are still measuring produce shrink in the same store-level manner.
  3. Retailers focus on produce managers for shrink in the store while it also develops in other exterior areas. (And ones that are completely outside the control of the produce manager!)

He suggests that we considered another reason which he terms “invisible shrink” that results from a myriad of variations in cut-to-cool and pre-cooling that impact produce shelf life and that retail produce managers shouldn’t be held to blame for in-store waste.

Mike Nicometo, cool-chain expert and president of EmpowerTech Inc. says that we shouldn’t discipline the produce manager for problems that they didn’t cause. Mike says that advanced shelf life loss is simply not visible until much later in the supply chain and that, in order to manage shrink and quality, we need to realize that putting product into the cool chain logistics process without knowing how much shelf life it has to start out.  He likens this to sending a fleet of planes to random destinations without knowing how much fuel they have at take-off.

What a great analogy!

Mike explains: When comparing the temperature of each pallet on a load versus the commonly monitored ambient air of the trailer for thousands of pallets during three to five day trucking from Mexico to the U.S., I found over 30 percent of individual pallets were running very warm, causing high levels of advanced shelf life loss. Typically, the advanced shelf life loss was invisible at receiving QR inspections, resulting in product being considered equal. In reality, many pallets were over four days older in terms of shelf life than were the others.

The article goes on to discuss how new software and temperature monitoring technologies can be employed at the pallet-level to help gauge the actual relative remaining shelf life, making the “invisible” data visible and enabling better decision making that can reduce shrink and improve quality.

We’d better start checking that fuel gauge!

Kevin Payne
Senior Director of Marketing

FSMA: The Movie

Leavitt Partners' Jennifer McEntire explains the recent FDA report on FSMA pilots in a short video...well worth the watch!

Leavitt Partners’ Jennifer McEntire explains the recent FDA report on FSMA pilots in a short video

Yesterday I blogged about the FDA’s new 334 page Food Safety Modernization Act Pilot Study Report that was written by the Institute of Food Technologists and Leavitt Partners.  After I published the blog post, I was corresponding with the very helpful Jennifer McEntire of Leavitt Partners who co-authored this report.  I was complimenting her on the report but said I would probably wait “until the movie version came out” (parroting the modern student’s refrain of “why read ‘Gone with the Wind’ when you can watch the movie much more quickly).

Much to my surprise, Jennifer immediately sent me back a link to a three and a half minute video she recorded explaining the report.  Sure, it doesn’t have all of the detail covered in the 334 page document but, for most of us, it’s a great “Cliff Notes” version.  You can watch the video here.

Thanks to Jennifer and Leavitt Partners for sharing this information with all of us.

PS: On March 7, Jennifer McEntire published another excellent newsletter/article on this topic which can be found here.  It also includes a link to an upcoming webinar on the topic.

Kevin Payne
Senior Director of Marketing

FDA Publishes Report on Product Traceability Pilots

Earlier today, the FDA issued a report on two product traceability pilot projects that were undertaken as a part of the Food Safety Modernization Act (FSMA), signed into law in January, 2011.  This milestone demonstrates further progress in moving FSMA forward.

Report on Pilot Studies

Report on Pilot Studies

You can download the entire 334 page document titled Pilot Projects for Improving Product Tracing along the Food Supply System – Final Report here. It was prepared by Jennifer McEntire of Leavitt Partners and Tejas Bhatt of the Institute of Food Technologists. According to the executive summary of the report (which is three pages long):

In September 2011, the U.S. Food and Drug Administration (FDA) asked the Institute of Food Technologists (IFT) to execute product tracing pilots as described in Section 204 of the FDA Food Safety Modernization Act (FSMA). IFT collaborated with representatives from more than 100 organizations—including the U.S. Department of Agriculture, state departments of agriculture and public health, industry, consumer groups, and not-for-profit organizations—to implement the pilots. To complete the task, IFT conducted two product tracing pilots of foods (including ingredients) that had been implicated in food-borne illness outbreaks between 2005 and 2010, assessed the costs and benefits of efficient and effective methods for tracking the designated foods, and determined the feasibility of such methodologies (including the use of technology) being adopted by different sectors of the food industry. One food pilot focused on the tracing of chicken, peanuts, and spices in processed foods; the other pilot focused on the tracing of tomatoes.

The objectives of the pilot projects were 1) to identify and gather information on methods to improve product tracing of foods in the supply chain, and 2) to explore and evaluate methods to rapidly and effectively identify the recipient of food to prevent or mitigate a food-borne illness outbreak and to address credible threats of serious adverse health consequences or death to humans or animals as a result of such food being adulterated or mis-branded.

The recommendations that the report makes are as follows:

  1. From an overarching perspective, IFT recommends that FDA establish a uniform set of record keeping requirements for all FDA-regulated foods and not permit exemptions to record keeping requirements based on risk classification.
  2. FDA should require firms that manufacture, process, pack, transport, distribute, receive, hold, or import food to identify and maintain records of CTEs and KDEs as determined by FDA.
  3. Each member of the food supply chain should be required to develop, document, and exercise a product tracing plan.
  4. FDA should encourage current industry-led initiatives and issue an Advance Notice of Proposed Rulemaking or use other similar mechanisms to seek stakeholder input.
  5. FDA should clearly and more consistently articulate and communicate to industry the information it needs to conduct product tracing investigations.
  6. FDA should develop standardized electronic mechanisms for the reporting and acquiring of CTEs and KDEs during product tracing investigations.
  7. FDA should accept summarized CTE and KDE data that are submitted through standardized reporting mechanisms and initiate investigations based on such data.
  8. If available, FDA should request more than one level of tracing data.
  9. FDA should consider adopting a technology platform that would allow efficient aggregation and analysis of data submitted in response to a request from regulatory officials. The technology platform should be accessible to other regulatory entities
  10. FDA should coordinate trace-back investigations and develop response protocols between state and local health and regulatory agencies, using existing commissioning and credentialing processes. In addition, FDA should formalize the use of industry subject matter experts in product tracing investigations.

Conclusion
In summary, IFT found that there are several areas (such as uniformity and standardization, improved record keeping, enhanced planning and preparedness, better coordination and communication, and the use of technology) in which industry improvements and enhancements to FDA’s processes would enable trace-backs and trace-forwards to occur more rapidly. There was a range of costs associated with improving product tracing capabilities for certain sectors of the industry based on the specific technologies used to achieve the data capture and communication objectives. Case studies demonstrated the range of public health benefits from reduction in illnesses from improved product tracing. The recommendations outlined in this final report will enable FDA to conduct more rapid and effective investigations during food-borne illness outbreaks and other product tracing investigations, significantly enhancing protection of public health.

No doubt, it will take some time for the industry to digest the entire document but it’s good progress that the FDA, under FSMA guidelines, is moving the process forward and that track-and-trace will now get more focus and attention.

Kevin Payne
Senior Director of Marketing

Bare Shelves at Walmart? $1.14 Billion in Strawberry Losses! What’s the Connection?

A story in Kevin Coupe’s Morning News Beat references Bloomberg as saying that: at a February 1, 2013 internal Walmart meeting, US CEO Bill Simon said that keeping shelves stocked has become a big problem, is “getting worse,” and is a “self-inflicted wound” that is the company’s “biggest risk.”

Where are my groceries?

Where are my groceries?

According to the piece, Walmart “has been trying to improve its restocking efforts since at least 2011, hiring consultants to walk the aisles and track whether hundreds of items are available. It even reassigned store greeters to replenish merchandise. The restocking challenge emerged as Wal-Mart was returning more merchandise to shelves after a previous effort to de-clutter its stores. Walmart’s inability to keep its shelves stocked coincides with slowing sales growth.”

While Bloomberg reports that Simon’s comments are taken from official minutes of the meeting, company spokesman David Tovar said they were “personal notes from one participant in the meeting and are not official company minutes,” and said that “there are a number of significant misinterpretations and misleading statements that do not accurately reflect the comments by Bill Simon or any other participant in the meeting.”

Tovar said that Walmart is happy with its in-stock positions.

Mr. Coupe then opines: No disrespect to Walmart, but I believe Tovar about as far as I can throw a supercenter. I’ve gotten a number of emails from folks in recent months suggesting that out-of-stocks has become a growing problem for Walmart, one that it has a hard time dealing with.

Coincidently, FreshPlaza recently reported that Walmart is donating $3 million to the University of Arkansas’ Center for Agricultural and Rural Sustainability to create and manage a national competitive grants program, awarding money for projects that will, among other things, expand where strawberries can be grown, enabling shorter trips for the berries between farm and consumer.

The story mentions that: “Strawberries are a highly perishable fruit with a short shelf life in the supply chain,” said Curt Rom, a horticulture professor for the Division of Agriculture, and part of the center’s leadership team. “Strawberries travel an average distance up to or exceeding 3,000 miles from farm to market.” Though prized for their delicate taste and texture, those same qualities can be the berries’ weakness – especially when hauled thousands of miles. It’s estimated that between the time the berries are picked to the time they reach the consumer, losses can reach 36 percent, with an annual value of $1.14 billion, Rom said.

Wow! $1.14 billion in losses – 36% of what’s harvested – between harvest and the consumer? Yikes, that’s a lot of berries! That’s a lot of money! Other academic and industry research shows that half of this loss is due to improper temperature management. One potential consequence of this loss: out-of-stocks.  If you’re a retailer and you’re expecting pallets of strawberries to replenish your shelves and discover upon delivery that they’ve spoiled, you may end up with an empty shelf and an unhappy customer who will turn to another retailer to buy their strawberries.

To be clear, I’m not suggesting that any Walmart out-of-stocks are specifically strawberries but the connection between the two stories is meant to drive home a point about the complexities and challenges associated with managing the supply chain to keep inventory in stock. If it is difficult to do for non-perishable items, imagine how much more challenging it is to ensure your high value produce, meat, seafood, poultry and dairy can be.

Kevin Payne
Senior Director of Marketing

Consumers Are Willing to Pay More for Fresh, Sustainable Packaging But…

Packaging is only one component of ensuring freshness and quality

Packaging is only one component of ensuring freshness and quality

Consumers are interested in fresher, higher quality produce. According to an article in Progressive Grocer: consumers are likely to pay more for value-added features that relate to freshness and sustainability, according to a global study conducted by Ipsos InnoQuest. When asked which potential packaging features would motivate them to spend more, consumers indicated they would be inclined to pay more for packaging that:

  • Keeps food fresh longer (55 percent)
  • Is environmentally friendly (55 percent)
  • Is re-usable (42 percent)
  • Is easier to use (39 percent)

In the article, Lauren Demar, Global CEO of Ipsos Innoquest says: Packaging plays a key role in consumer packaged goods innovation, whether marketers are introducing new products or trying to invigorate existing brands. As a key driver in the consumer’s decision to buy, packaging features can often be leveraged to charge a premium. Demar then goes on to suggest that, because consumers place a higher value on packaging that preserves freshness and provides environmental benefits, marketers may have the opportunity “to win over consumers and increase revenues through innovative package designs that deliver sustainability of freshness as well as sustainability of the planet.”

Improving packaging is important but it is only one factor in ensuring that perishable foods are kept fresh. Simply having a super package with lining materials that reduce ethylene (for example) doesn’t do anything to reduce or eliminate issues related to temperature mishandling that can dramatically impact freshness, quality and food safety. While it’s great to see that consumers say that they are willing to spend a bit more for the benefits above, it’s not reasonable for the consumer to understand all of the elements that go into delivering fresh, high quality food.  That’s up to the industry to manage and the consumers look to retailers and brand owners to deliver on this promise.  Learn more about the impact of temperature on quality here.

Kevin Payne
Senior Director of Marketing

Recalls, Grocers, FSMA and the Guilty Parties

Earlier this week, several publications including The USA Today and The Wall Street Journal reported on findings from the Centers for Disease Control relating to food safety which detailed that leafy greens such as lettuce, spinach and kale accounted are the guiltiest parties a caused the most food-borne illnesses nationwide from 1998 through 2008. Dairy products accounted for the most hospitalizations. The most deaths were linked to poultry. The study looked at 4,887 outbreaks that caused 128,269 illnesses, hospitalizations and deaths when the food that caused them was known or suspected.

Sure, shopping for lettuce can be fun, but is it safe?

Sure, shopping for lettuce can be fun,
but is it safe?

According to Patricia Griffin a food-borne disease expert at the CDC who was the senior author of the report the “The study isn’t meant to be a “risk of illness per serving” list for consumers. The statistics are meant to help regulators and the food industry target efforts to improve the safety of food.” She adds that “The vast majority of meals are safe, so don’t let the numbers for leafy greens keep you from eating vegetables.”

What does this have to do with retail grocers and the pending Food Safety Modernization Act (FSMA) regulations?

Well, most of us purchase these products at our favorite grocery store. Simply put, we trust that our local grocer has taken good care to ensure that the food he or she is selling to us has been properly washed, dried, packaged, handled and stored and that it is safe to eat and of good quality. We, as consumers, have no way of ensuring this ourselves. This trust relationship is critical.  It’s why we chose a grocery store.

But retail grocers, according to Deloitte, executed an average of 117 recalls PER YEAR!

In addition to complying with the 2005 Bioterrorism Act which relates to recalls, grocers need to understand the potential impacts of the FSMA as well. On January 24, I blogged about a white paper from Food Safety expert Dr. John Ryan about what grocers should be doing today with regards to the FSMA.  You can find his article here.  I subsequently came across this excellent, brief Retail Impact of the FSMA summary by Leavitt Partners. It’s well worth the five minutes or less it takes to read.

I asked Jennifer McEntire, Senior Director, Food and Import Safety, how she would summarize what retailers should be thinking about the FSMA at this point.  She said, “From a practical standpoint, knowing who is in your supply chain, in this case, looking forward toward retail, and having confidence that they are following the rules is paramount.”As consumers, we want to maintain that trust relationship with our food providers. There are new tools and methodologies available to the industry to help further the cause of food safety and quality.  And, while the FSMA may not be primarily directed to retailers, as Jennifer points out, from a practical standpoint it’s essential for grocers to have complete confidence in their suppliers and confirm that they’re following the rules.As grocers are the captains of the cold chain, let’s encourage them to lead the way in addressing and implementing the rules.Kevin Payne
Senior Director of Marketing

FORBES: Interested in Food + Technology? Five Opportunities You Shouldn’t Miss

I devote a log of our blog ink to issues relating to food safety, quality and reducing the amount of food wasted. A recent article in Forbes talks about five areas where technology can make a difference including temperature monitoring to enable First Expired, First Out inventory to help ensure that more food is delivered fresh.  It’s nice when the business press starts to pick up on ideas that are too often stuck within the food industry.

We All Need to Get on the Bus to Improve Food Safety and Quality

We All Need to Get on the Bus to Improve Food Safety and Quality

For us to make improvements in the food cold chain, everyone’s going to have to get on the bus: producers, packers, shippers, retailers, consumers and government.  I’m hopeful that the attention currently being given to the FSMA in the mainstream media will translate into more attention about what we can collectively do to improve the cold chain.

Kevin Payne
Senior Director of Marketing

PMA Fresh Summit is About to Start

If you’ve never been to the PMA Fresh Summit, you’re in for a treat…quite literally.  There are over 50 aisles of exhibits and most of them have free samples and tastings of fruits and vegetables of every conceivable shape, size and variety.  You can wander from booth to booth and grab an apple, a pear or perhaps something you’ve never even seen before that’s traveled from Chile, Mexico or Argentina.  While we won’t be able to offer you any fresh fruits or vegetables in our booth, we can demonstrate how we can help ensure the delivered freshess of those fruits and veggies as they make  their way from the field to the grocery store.

 

All Set Up and Ready To Go at PMA Fresh Summit Booth 3782

Come by our booth at 3782 at PMA and say hi and we’ll show you how we’re working to improve freshness and quality of your fresh produce.

Kevin Payne

Senior Director of Marketing