Supply Chain Management · Supply Chain Management Postharvest Technology of Horticultural Crops...

Drs. Ing. J.C.M.A. Snels 14/06/2014

© Wageningen UR Food & BiobasedResearch 1

Supply Chain Management

Postharvest Technology of Horticultural CropsShort Course – June 17-21, 2013

Msc. Joost Snels BBE

This presentation

Introduction

What is Supply Chain Management?● The Chain● Decision Making Unit retailer● The challenge

SCM innovations● Optimizing distribution chain using product quality

● modal shift / chain re-design

General conclusion



Joost Snels

Background in● Logistics

● Supply Chain Management

● Business Economics

Worked for private company (paper trading) and the government (Ministry of Transport, Public Works and Water Management)

13 years for Wageningen UR Food & BiobasedResearch (Fresh Logistics / SCM)

The Netherlands known for:

Soccer / Hockey teams

Flowers & windmills

Water management

Gateway to Europe: it’s all about (agro) logistics

2nd largest agricultural exporter in the world (next slides)



Top 2 export locations

USA = 9.629 kkm², Population: 314 M, Density: 33 p/km²Netherlands = 38 kkm², Population: 17 M, Density: 405 p/km²

%‐growth %‐growth %‐growth

Country 2009 2010 2011 2012 2009‐2010 2010‐2011 2011‐2012

1 United States 111.717.085.425 132.219.645.729 157.993.873.676 161.764.508.987 18 19 2

2 The Netherlands 77.124.713.215 80.530.805.517 101.351.907.226 97.824.614.822 4 26 ‐3

3 Germany 75.764.737.000 79.061.787.318 93.693.916.345 88.021.110.382 4 19 ‐6

4 Brazil 55.800.765.460 64.872.961.311 83.088.554.667 84.187.772.290 16 28 1

5 France 64.273.460.251 68.563.093.761 82.541.549.055 76.616.058.427 7 20 ‐7

6 China 40.482.931.734 50.620.601.271 62.203.568.833 64.405.806.242 25 23 4

7 Canada 38.868.311.056 44.800.964.084 52.198.088.763 55.669.118.045 15 17 7

8 Spain 37.730.722.475 39.313.467.202 45.005.014.602 46.442.486.984 4 14 3

9 Belgium 38.999.132.427 39.873.293.408 46.381.479.927 45.245.344.294 2 16 ‐2

10 Argentina # # 45.596.494.604 43.515.868.532 # # ‐5

Source: UN Comtrade databases http://comtrade.un.org/db/

# not present in list Top 10 countries

Top 10 exporters of argricultural products (in US $)

International position Netherlands



This presentation

Introduction




General conclusion

Goal

What is Supply Chain Management?

How is it translated in de ‘western’ food supply chains?

What new technologies / concepts can be found?



What is Supply Chain Management?

“Demand and Supply Chain Management (DSCM) is the management of a network that links customers and suppliers as one 'single entity' with the objectives to create value and reduce waste through the voluntary integration and coordination of the objectives of three or more - ideally, all the -independent parties in the network”

W. Ploos van Amstel & A.R. van Goor


Aim of SCM:

●Balance between●High customer service (results;

revenue growth)● Elimination of waste (offers; cost

reductions)●Create competitive advantage (long

term)




Supply chain is a single integrated entity, a system. As a system it has shared objectives Each tier should understand its customers:

● Delivery● Quality and cost requirements● Customers markets● Processes, ● Constrains ● Organizational cultures

What is a supply chain?

2nd tiersupplier

1st tier (main)supplier

Retailer

Customer

Original EquipmentManufacturerthe supply chain Distributor



Supply Chain, Demand Chain, Value Chain

ConsumerSupplier

Wholesale Retail

Product, Information

Money, Information

Product quality driven chain or network

From Chains to Networks



Supply Chain Complexity

Complexity is related to● Numerical aspect (e.g. product coding)● Uncertainty aspect (e.g. forecasts)● Type of products perishables

Understanding of Complexity is based on ● Numbers of entities;● Their relations;● Nature of these relations.

Decision Making Unit

Fresh Logistics as part of SCM

“Fresh Logistics is that part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of fresh goods and related information from the point-of-origin to the point-of-consumption in order to meet customer requirements and satisfies the requirements imposed by other stakeholders such as the government, the society (NGO’s) and the retail community”

J.G.A.J. van der Vorst



Fresh Logistics as part of SCM

Fresh Logistics concerns all activities in the supply chain to match product supply from the farm with market demand for perishable products It aims at getting the right agro-product, at the right

place, at the right time, according to the right specifications (including quality and sustainability requirements) at the lowest cost Actors in these types of chains understand that

original good quality products might be subject to quality decay because of an inconsiderate action of another actor

J.G.A.J. van der Vorst & J.C.M.A. Snels

My situation?

How does my chain look like and what is the complexity?What are the activities related to Fresh Logistics?



This presentation

Introduction




General conclusion

Who is in charge in the value chain?

Perishables The one who interacts with the CUSTOMER!● WAL MART

● Proctor & Gamble

● Nike

The one who has the unique feature in the PRODUCT or SERVICE!● Intel

● Fedex

Supermarkets

Traders / Producers




End of chain Decision making unit (DMU)● Product specifications

● Logistic performance indicators

● Customer service

Supply Chain

DMU

In the world of ‘fresh’, DMU = Supermarket

My situation?

What is the Decision making unit in my chain?



Fresh rules: Consumer trends

Consumer perception

Fresh = tastier and healthier

Fresh rules: retailer

Best differentiator category for retailersEnabler of retailer profits

Shift from dry, frozen, canned to fresh and convenient



Retail policy

Minimum of preferred suppliers● Comply with rigid specs: safety, quality, ethics● Food certificates: GlobalGap, HACCP, BRC, Organic

Last minute ordering● short lead times, no out of stock

Optimized logistics● low replenishment frequency● year round, high quality produce

Closed supply chains● T&T, eliminating links, costs

Contribute to Retailers Added Value

● Convenience

● Health claims

● New products: size, colour, seedless, etc.

● Organic

● Sustainability: e.g. carbon footprint, Fair trade

● Shelf life elongation



My situation?

What is my added value in relation to the Decision making unit / consumer?

This presentation

Introduction




General conclusion



Global supply chains: Fruits

Global supply chains: Vegetables



Global supply chains: Flowers

The challenge

PerishablesSupply chains become longer

Better quality, better service against the same costs using new concepts and/or technologies

(Shown) less waste and environmental pressure within the whole supply chain



My situation?

Do I face the same challenge, even when my supply chain is ‘shorter’?

This presentation

Introduction




General conclusion



Postharvest quality and logistics

Qua

lity

FenotypeGenotype

Growingconditions Postharvest &

Logisitics

Quality decay model (generic)

Opslag en Transport Houdbaarheid

Acceptatiegrens

Coping with differences in quality

0

2

4

6

8

10

12

0 2 4 6 8 10 12 14 16

Time (days)

Qu

ali

ty s

co

re




Acceptatiegrens


0

2

4

6

8

10

12

0 2 4 6 8 10 12 14 16

Time (days)

Qu

ali

ty s

co

re

Acceptance level

Quality decay model (generic)

Chain conditions

Temperature

Distribution[days] 8°C 10°C 12°C 18°C

9 ++ ++ + ---

11 ++ + + ---

14 + + --- / + ---

17 + --- / + --- ---

19 --- / + --- / + --- ---




Acceptatiegrens


0

2

4

6

8

10

12

0 2 4 6 8 10 12 14 16

Time (days)

Qu

ali

ty s

co

re

Longer shelf life = innovation


Acceptatiegrens


0

2

4

6

8

10

12

0 2 4 6 8 10 12 14 16

Time (days)

Qu

ali

ty s

co

re

Acceptance level

11

Logistic choice: different modality / storage



Transport modality shift

Standard transport modality: air freight● Fast transport times ● High tariff; fuel surcharges● Flexible volumes

Alternative marine (Reefer) transport: ● Longer transport time ● Closed cool chain● Lower costs ● Large capacity● Large volume

per shipment● Sustainable

Marine transport is a sustainable method

Fuel consumption and CO2 emission*

Ctr. Vessel** Train (Electric)

Train (Diesel)

Truck Boeing 747

Energy(kWh/tkm)

0.023 0.043 0.067 0.18 2

CO2-emission(g/tkm)

10.5 44.1 17 50 552

0

10

20

30

40

50

60

Boeing Truck Train Ctr.Vessel

km per kWh/ ton cargo

*Data from Network for Transport and Environment

A large container vessel carries a fully loaded container 35 km using 1 litre

fuel



Example: Bell pepper supply chain

Schapleven en houdbaarheid in verschillende ketens

0

2

4

6

8

10

12

0 2 4 6Tijd ->

Ho

ub

aarh

eid

bij

8C

/95%

RV

->

boot keten

vliegtuig keten

schapleven schapleven

109

51

107

39

boot vliegtuig

% afname van houdbaarheid in keten per schakelen aantal dagen resterend schapleven

schap

modaliteit

vrachtwagen

teler

%%

%

%%

%

0,7 dag1 dag

Boat chain

Air chain

Boat AirShelf life Shelf life

Shelf

modality

Truck

Grower

% decline of shelf life in the chain and number of days of remaining shelf life

Shelf life and keep ability in different supply chains

days

hours

hours

hours

hourshours

hours

hours

Boat chain Air chainTime TimeRH RH

Boat chainChain part time temp. [C] Rh [%]

22 7018 10 875 8 95

18 75

Air chainChain part time temp. [C] Rh [%]

3 22 7012 10 873 25 656 18 753 25 65

18 75

Grower

TruckBoatShelf

3 GrowerTruck

AirplaneAircraft platform

Aircraft platform

Shelf

Keep the ‘cold chain’ closed!




Acceptatiegrens


0

2

4

6

8

10

12

0 2 4 6 8 10 12 14 16

Time (days)

Qu

ali

ty s

co

re

Acceptance level

11

Quality choice: better quality for the customer

Avocado: ready-to-eat or ripe-on-arrival


Acceptatiegrens


0

2

4

6

8

10

12

0 2 4 6 8 10 12 14 16

Time (days)

Qu

ali

ty s

co

re

Acceptance level



Manipulating ripeness

0

2

4

6

8

0 5 10 15 20

time (days)

eth

yle

ne

pro

du

cti

on

ON

OFF

-20

0

20

40

60

0 5 10 15 20

time (days)

Co

lor

OFF

ON

Avocado

Tomato

Banana

My situation?

What chain aspects influence my product quality?Am I able to influence these?



This presentation

Introduction




General conclusion

General conclusions

Quality starts with the intrinsic potential of a plant (genes)

The postharvest chain can only slow down quality loss, the chain is not a hospital

Understanding and knowing quality loss gives many possibilities● Low hanging fruit: start with chain monitoring



General conclusions

Not Chains but Networks Networks need Supply Chain Management

The consumer, represented by the retailer, is the decisive factor in modern demand driven supply chains● Retailer knows the consumer needs and demands

best

Quality control is essential: is a retailer condition

General conclusions

Quality of fresh produce needs total chain approach● Transparency needed between every link

Appropriate technology can then be selected to maintain quality● A single factor approach only leads to sub-optimal

results

Fast is not always better, slow can be the optimal solution



For more information:[email protected]

Thank you

Questions?

Supply Chain Management · Supply Chain Management Postharvest Technology of Horticultural Crops...

Documents

Transcript of Supply Chain Management · Supply Chain Management Postharvest Technology of Horticultural Crops...