The Food Safety Modernization Act and Increased Need for Track and Trace, Part Four
Now that we’ve considered the problems facing the CPG industry’s cold-chain, let’s look at how pallet-level tracking can help.
Approximately 1.1 billion pallets of produce are shipped annually to retail grocers in North America and Europe—but how can you track 1.1 billion pallets of produce cost-effectively? This problem isn’t new, but without a viable method for addressing the $17 billion waste problem cited in our last post, the costs are passed through the cold chain.
The cold chain has tried to address this problem by implementing various temperature-monitoring solutions, such as environmental monitoring of transport vehicles and cold-storage facilities. However, this approach does not accurately track the condition of each pallet of produce, leading to inaccurate assumptions. These assumptions group the condition of an entire shipment, even when it is known that the cooling (and quality) is not uniform.
Some members of the cold chain have started implementing temperature-monitoring solutions at the “truck level” by putting one or two tags in each of the refrigerated trailers that carry produce. While this provides some information on temperature control, it’s hardly adequate for monitoring the condition of each pallet of produce, as temperatures within the trailers can vary significantly. Trailer-level monitoring doesn’t account for the fact that the remaining shelf life of produce varies at the pallet level. What’s needed is pallet-level temperature monitoring from harvest to retail delivery.
The diagram below illustrates the benefits of pallet-level monitoring and how it enables a FEFO (First Expiry, First Out) model over the more traditional FIFO (First In, First Out) approach. This transition is achieved by factoring in the variation of pallet-level temperatures within a refrigerated trailer and its impact on the remaining shelf life of produce. FEFO-based inventory management means you ship out the product with the first expiry date first, regardless of when it was received in the warehouse.
The color codes indicate the remaining available shelf life of pallets in a trailer in a shipment from a grower to a retail distribution center. Two pallets (in orange) have only two remaining days of shelf life prior to departure, three (in yellow) have four days of remaining shelf life and three (in green) have six days of remaining shelf life. With this information, the distributor can chose to ship those with six days of shelf life (green) to more distant retailers and those with only two days of remaining shelf life to a location with rapid or same day consumption (such as a cafeteria). With pallet-level temperature monitoring, these FEFO-based decisions can be made at the warehouse—or at other steps in the cold chain—at a pallet-by-pallet level.
Non-uniform ripening is a fact within the perishable cold chain. While there may be a number of contributing factors, a significant cause is due to temperature variations within the trailer. Note in the example above that the impact on shelf life is not uniform. That is, there is not necessarily a consistent ripening between each pallet. As such, a single “read” or assumption on the entire trailer shipment will be wrong for many of the individual pallets.
If the temperature is monitored only at the trailer level, the potential exists for poor decision-making that can have very expensive consequences. As discussed in the example above, when the trailer arrives at the distribution center, only one pallet may be selected and sampled for quality. If a red pallet were chosen, the entire load may be rejected and wasted when, in fact, only half of the load should be wasted.
By implementing pallet-level temperature monitoring and FEFO inventory management—supported by a comprehensive ERP solution like it.CPG—produce revenues can be improved by maximizing the available shelf life.
With the nitty-gritty of pallet tracking covered, we’ll zoom back out in the next post to see how track-and-trace can contribute to a new food-safety paradigm for the Food Safety Modernization Act era.
In: Consulting, Marketing, SAP, Support, itelligence, Inc. · Tagged with: cold-chain, FEFO Inventory Management, FEFO Model, FIFO Model, First Expiry First Out Model, First In First Out Model, Pallet level monitoring, Pallet level tracking, SAP CPG solution, track and trace capabilities