Aug 03, 2005Roughly 10 percent of all perishable goods (fresh produce and other food products) goes to waste before consumers purchase it. As such, retailers have a particular challenge: How do you keep perishables in stock and on the shelves without having them spoil? Researchers at Agrotechnology & Food Innovations (A&F), an applied research institute at Wageningen University in the Netherlands, are using radio frequency identification technology to find the answer.
"We need the data to improve the supply chain for perishables," says Frans-Peter Scheer, project manager in supply chain management at A&F. "RFID will play an important role in providing fast and accurate information."
Scheer has been developing a concept he calls Quality-Oriented Tracking and Tracing (QTT). It combines the ability to track goods through the supply chain with the recording of temperature, humidity and other data about the environmental condition of the products. In this way, the QTT system helps ensure that goods are not lost to spoilage, either in transit or after they arrive on the retailer’s shelf.
"Tracking and tracing is a very important first step," says Scheer, who will be discussing his research at RFID Journal LIVE! Europe in October. "We have to know the condition of food, not just for food safety and to avoid spoilage, but also for [the] taste and age of the product."
A&F has been working with a Dutch retailer, a food processor, a logistics provider and a company that provides reusable crates to address this issue. Together, they are striving to create a pilot in which RFID tags will be attached to crates and distributed from the food processor’s facilities to track fresh mixed vegetables as they move through the supply chain. The RFID data will reveal how long the vegetables took to move from one point to another in the chain.
At the same time, data on environmental conditions, such as temperature, and humidity, will be collected by data loggers designed to measure and record such conditions. Time and temperature, together, are important indicators of how much shelf-life remains for a given product. This is critical information, because mixed vegetables (such as lettuce, carrots, onions and cabbages) and ready-to-cook products spoil in just seven days. It often takes one to two days to get them to the retail store, leaving a remaining shelf-life of just five days.
For the pilot, which will go live in a few weeks, the companies plan to use passive UHF RFID tags based on the second-generation Electronic Product Code protocol for track and trace. The tags will be read at several points at the processor site, at the distributor and in retail stores. Data loggers will record the temperatures to which the products are exposed. This information will then be sent to a database, along with the RFID data collected on each shipment. The parties involved can access the information in the database and analyze it for QTT purposes.
One goal of the project is to use the RFID data to develop algorithms that determine when to replenish perishables and how much product to put on the shelves. Scheer says that by tracking products through the supply chain of other retailers, A&F should be able to create algorithms that determine the right replenishment schedule for specific products. These, the company explains, will vary from one retailer to another.
Spoilage is an aspect that must always be taken into consideration for perishable products. The challenge, says Scheer, is to find the optimum balance between spoilage and out-of-stock. "At first, the replenishment algorithm will provide advice—it will suggest what to do," he says. "When it is proven that it works, then companies that sell perishable goods can use it to create a fully automated replenishment system. That's what we see happening."
The benefits of the QTT approach to supply chain management include improved food safety, because fewer goods go bad and products can be recalled more efficiently; reduced costs due to less spoilage, lower inventories of products and crates and greater efficiency in logistics; and improved customer service since food providers can deliver custom levels of quality for specific retail customers.
"We foresee different logistical concepts for perishables," Scheer says. "Where[as] FIFO [first in, first out] is the main concept today, we foresee companies moving to FEFO—first near expiration, first out."
FEFO would mean that perishable products would flow through the supply chains based on their shelf-life and not just on the time they’ve been in the supply chain. For instance, products with long lead-times that have been exposed to high temperatures during distribution would be sent to the retail shelves before those with short lead-times but distributed under more favorable conditions.
Some companies using bar codes and temperature-recording data loggers do a form of QTT today, but scanning bar codes is labor-intensive. Scheer sees these companies transitioning to passive RFID and data loggers over time and then, finally, to passive RFID. This would allow them to perform track and trace and active RFID sensors for monitoring temperature, humidity and other environmental factors in real time. Eventually, companies will move from tagging returnable transport items such as pallets and crates, to consumer packaging.
"You can do QTT today without RFID, but it's all about enhanced visibility in the supply chain and faster sharing of data," Scheer states. "That's where RFID becomes important. But companies will need to do a cost-benefit analysis for each product in each market to determine when it makes sense to implement RFID-based QTT. They need to chart, so that today's vision becomes tomorrow’s solution."
