Turning Information Into Insight

Inventory management, a challenge in any industry, is intensified by perishability. Supply chain managers need to know the condition and quantity of inventories at each node within the supply chain. This information drives decisions regarding when to replenish inventory, which lots to rotate first, and when to take product price markdowns. For example, accurate knowledge of produce condition will allow managers to deploy a first-expired, first-out inventory strategy versus the traditional first-in, first-out policy that does not consider remaining shelf life.

Fortunately, produce companies are gaining sophistication in this area. “New shelf-life formulas and data processing speed has enabled many companies to engage in predictive shelf-life analysis based on time, temperature, and other variety exclusive attributes,” explains Michael McCartney, managing principal at QLM Consulting in East Lansing, MI.

Transportation also requires timely information as the dynamic nature of capacity availability, carrier pricing, and delivery scheduling create supply chain risk for produce companies. A lack of equipment can leave product to rot in fields or age in the warehouse while waiting for temperature- controlled trucks and drivers. Supply chain managers need to share their requirements with brokers and carriers—in advance when possible—to secure needed capacity at a reasonable delivery cost.

Langley connects transportation to customer service, stating, “the availability of useful information helps the organization manage capacity to meet delivery schedules, so stockouts are avoided.”

As product flows across the supply chain, information must be captured to achieve in-transit visibility and support traceability. The good news is updates can be captured by affordable tracking devices that provide real-time GPS (global positioning system) location, temperature readings, humidity levels, and atmospheric pressure. No longer are supply chain managers in the dark waiting for driver check-in calls or forced to ‘guesstimate’ if loads will be delivered as scheduled.

Peters notes that produce industry managers view traceability as a costly compliance issue rather than an operational improvement driver. Ultimately, he believes retailers will force produce companies to provide “a full accounting of all the data associated with each case of produce, so you’re able to determine how many days of product freshness remain.” This information will drive better actions to protect product integrity and reduce shrink.

SUMMARY
Information is the fuel that sparks decision making and activity in a fresh produce supply chain. Accurate, actionable information helps organizations collaboratively plan for fresh produce production and sale. Timely knowledge supports the distribution of produce at maximum freshness. Collectively, the facilitating role of information helps growers, shippers, and retailers pursue the goal of matching supply with demand to satisfy consumers at minimal waste.

As we have discussed, information is not raw data that is arbitrarily transmitted to trading partners. Instead, it is well-crafted and well-organized knowledge that has been gleaned through effective data mining and analysis of the vast storehouse of supply chain records. This insightful information, combined with the logistics, facilities, and inventory capabilities discussed across the back-to-basic elements series, is essential for optimizing the fresh produce supply chain.