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Farm Harvests RFID’s Benefits
After deploying an RFID receiving system, Paramount Farms cut its operating costs, improved its relationship with growers and avoided having to invest in expanding its facilities.
Mar 01, 2004—An RFID implementation can be a daunting challenge for many companies, but for Paramount Farms—one of the world’s largest suppliers of pistachios—the technology hasn’t been a tough nut to crack.
Paramount, which processes about 60 percent of the U.S. pistachio crop and exports its products to more than 20 countries, is relying on an RFID system to help automate and increase the efficiency of a key part of its business: processing the incoming shipments of pistachios from grower partners. The privately held Los Angeles-based company has enjoyed growing worldwide demand for its products for several years, and it expects the rapid growth in demand to continue for at least the next six years. This has forced Paramount to develop a more efficient method of receiving, evaluating and paying for the nuts provided by its numerous suppliers.
Paramount grows about half the pistachios it sells, with the remaining 50 percent coming from a network of some 400 partners, according to Andy Anzaldo, Paramount’s director of grower relations. All told, the company processes about 230 million pounds of nuts a year at its two facilities in Lost Hills, Calif.
The company’s products are sold through major distributors to mass retailers such as Wal-Mart, Sam’s Club and Costco, as well as to large supermarket chains such as Safeway and Albertsons.
Growing demand for its products and a narrow period of time for processing—because of perishability issues, nuts need to be shaken from trees, shipped, received and packaged over a six-week period in an average harvest season—meant Paramount had to develop a more efficient way to process deliveries from its suppliers.
One of the major components of its new automated processing capabilities is a new grower receiving system (GRS), a Web-based system using Microsoft’s .Net technology and Microsoft SQL 2000 database that replaced an older system that required time-consuming manual data entry and was prone to errors and data duplication. GRS not only enables the gathering of more accurate data but allows Paramount to consolidate information about receiving, evaluating and measuring products in one system, Anzaldo says.
The system was developed and implemented by MagTech Systems, an Indianapolis-based provider of process-improvement engineering and technology for the food and agribusiness industries, in conjunction with Paramount’s IT staff and other departments. MagTech’s GRS was installed in 2002, in time for the fall harvest. The system stores data on functional processes such as product weigh-in, precleaning, sampling, grading, and payments to grower partners.
Paramount says the process of receiving nuts from other growers is an especially critical part of its supply chain, in terms of maintaining good relationships with suppliers and keeping an accurate account of products received from the grower partners.
The scope of Paramount’s pistachio receiving operations during harvest time is large; the company receives some 425 loads of nuts per day, each amounting to about 50,000 pounds, for a total of 21 million pounds per day. The products are received, recorded, weighed, precleaned, sampled and processed.
In order for Paramount’s grower partners to be paid fairly, Anzaldo says, the company must make an accurate accounting of the nuts that are deemed acceptable for consumption. This is where RFID technology comes into play.
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