Improved Inventory Accuracy and up to 60 % Reduced Food Waste!
Helping retailers revolutionise the management of fresh produce, Checkpoint Systems, a global leader in source-to-shopper solutions, has unveiled its new FarmsoftTM fresh food solution.
Using RFID technology, the solution allows stores to accurately monitor inventory levels and rotate stock efficiency as produce with near or exceeded expiry dates can be identified with ease.
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Despite increasing concerns surrounding food waste, more than 89 million tonnes of food are thrown away every year in Europe. The grocery retail sector contributes some 5 % to the total amount, often due to expired fresh produce, equating to more than 4.45 million tonnes.
Managing sell-by dates on perishable goods requires retailers to have a total view of their inventory at any given time. Here, inventory accuracy not only ensures brand owners can have a complete view of all merchandise and its location within the supply chain, but reduce lost sales and improve efficiency.
To date, retailers have relied on time-intensive, visual inspections to detect the sell-by dates on perishable products and manage replenishment needs, with less than half using an automated system to control inventory levels, but not expiry dates.
Here, retailers face an extremely difficult challenge. The management of sell-by dates is not only critical to the quality and sale of products in-store, but to retailers’ responsibility to protect consumers, ensuring that any out of date products are identified and removed promptly.
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The Farmsoft solution enables retailers to manage inventory and precisely plan when replenishments are required, as well as when stock needs to be marked down for sale. Checkpoint customers using the solution have already noted reduced food waste levels by as much as 60 %, while also minimising the time spent required to manually check merchandise by up to 78%. Improvements in inventory accuracy were also noted, achieving up to 99.99 % in the stock room and up to 99 % on the sales floor. By improving cycle count times, reducing waste and accurately managing expiry dates, retailers can enjoy an uplift in sales thanks to increased product availability.
From Delivery to Disposal
Thanks to the application of Checkpoint’s Farmsoft at source, retailers are able to receive RFID tagged products, that can be quickly verified, aiding a high inventory accuracy. To achieve this, Checkpoint’s high-performance RFID labels are automatically applied during the production process. This not only improves the accuracy of shipments distributed from the point of manufacture but ensures accurate, timely deliveries in store.
Whether its on shop floor or in stock rooms, Checkpoint’s Farmsoft scanning process enables store personnel to use an intuitive handheld device that quickly and accurately counts and locates specific items. It works in conjunction with Farmsoft reporting software to deliver real-time actionable data that includes insights on replenishment, expiration, markdown, waste reports, products to restock and order, as well as items that are about to expire or have expired.
Completing the cycle from delivery to disposal, Farmsoft waste process provides insights into the amount of fresh produce that has expired and automatically removes the product from inventory records.
Delivering a wide range of substantial benefits for retailers, Checkpoint’s Farmsoft fresh food solution means products can be more efficiently managed and displayed in-store. By reducing waste and managing stock more efficiently, retailers can also enjoy an increase in sales.
Miguel Garcia Manso, Business Unit Director Germany of Checkpoint Systems, commented: “The shelf life of fresh produce presents a unique challenge for grocery retailers. By improving inventory management and replenishment, retailers can not only see a marked improvement in stock rotation and sales but crucially reduce current levels of avoidable and costly food waste. Farmsoft delivers the highest level of accuracy and ensures retailers are putting forward the right price, at the right time on the right product.”
Santa Clara, CA, US: The slightest change in temperature affects the shelf life of produce and reduce its saleability. Efficient temperature monitoring and management throughout the supply chain is no longer a seen as an option, but a necessity, says Peter Mehring, chief executive, Intelleflex.
“The monetary value of fruit and vegetables lost during the cold chain is staggering. This is exacerbated with the added pressures that are put on produce logistics management by severe world food shortages,” he says.
“Produce companies need innovative new solutions to decrease wastage and effectively manage and track pallets of perishable goods and many are turning to RFID-based wireless (Radio Frequency Identification) condition monitoring tags.”
While many shippers of perishable goods may monitor the products at a trailer-level, this has proven to be inadequate as temperatures vary pallet-by-pallet, even inside a refrigerated trailer.
The time and temperature from harvest-to-cool are common variables that need to be monitored on an individual pallet basis because temperature, and time spent at that temperature, affects each pallet in a different way.
“Typical quality control means a visual inspection process. This is not adequate as “invisible” shelf life loss, which occurred earlier in the supply chain due to improper temperature controls, cannot be seen or identified,” Mehring says.
“To put it simply, a wasted produce isn’t always visible to the naked eye until just before it begins to spoil – well after it is too late to do anything about it.
“Traditionally, warehouses have operated on a “first in, first out” (FIFO) model of distribution. But, because relative shelf life varies by pallet, this method is not effective as often the last pallet in needs to go out first in order to be delivered fresh.
RFID pallet-level monitoring enables the shipping process to implement a “first expiry, first out” (FEFO) method based on the experienced temperature of the pallet which is the most accurate indication of the condition of the produce and the time remaining before it has spoiled. By implementing pallet-level temperature monitoring and FEFO inventory management, produce revenues can be improved by maximising the available shelf life based on the dynamic state of the produce, he says.
“What’s important for maximising the delivered value of the produce is knowing the relative current remaining shelf life from the field to the retailer. This actionable data is what drives effective real-time decision-making, prioritised routing, waste reduction and quality improvement.
“Simply put, products with a higher relative shelf life index can be shipped further distances while products with a lower relative shelf life index need to get to market as quickly as possible.
“At each point along the way, there’s potential for trouble. Produce could be left in a field, sit in the sun on a loading dock or be stored in a truck with broken or uneven refrigeration.
How RFID technology can help increase confidence in food safety
KEYWORDS coronavirus and food safety / food safety trends / GS1 / RFID tags / RFID technology / tracking solutions
Prior to the COVID-19 pandemic, conscious consumerism was on the rise in a big way, forcing a shift in the way food supply chains function. Consumers want supply chain transparency, robust product information, the assurance of food safety and swift action when a recall occurs.
Now, in the age of pantry-loading, fast-food delivery and outdoor dining, satisfying a deeper need for information will be the key to securing consumer confidence and trust in our new pandemic-influenced reality. Core to delivering on what consumers want is enabling improved food traceability.
The State of Hawaii Department of Agriculture and the Hawaii Farm Bureau have partnered to deploy a three-year pilot RFID initiative. The Hawaii Produce Traceability initiative uses UPM Raflatac RFID inlays to track and trace fresh produce throughout the State’s food supply chain. The innovative initiative, the first of its kind in the US, is designed to promote food safety by providing product visibility down to the farm or even field level. The RFID system provides detailed, real-time information which can be used to optimize the supply chain, enable recalls in less than an hour and improve Fresh produce packaging.
In the first phase Lowry Computer Products developed an RFID solution leveraging hardware from Motorola and Symbol Technologies, and Globe Ranger system software. The system pairs waterproof labels with UPM Raflatac ShortDipole UHF inlays with the Lowry Computer Products’ Fresh Harvest Solution to provide real-time supply chain data of when boxed produce is planted and harvested, what pesticides are used and when and where RFID-tagged boxes are scanned. The data is automatically uploaded into a database, where it can be used by program participants. It is also available for public review on the initiative web portal, www.hawaiifoodsafetycenter.org.
Growers were offered the opportunity to participate by either slap-and-ship tagging or usage of a hand-held RFID system. Boxed produce is read at the distribution center upon entry and exit of both the physical facility and cold storage. Tags are read again at the retailers' point of entry, removal from cold storage and at end of life. Both the distribution center and retailer use a fixed portal RFID reader.
Participants can use gathered data to optimize harvest productivity, strengthen food processing controls, increase cold chain visibility, reduce produce dwell time on shipping and receiving docks, accelerate transportation times between trading partners and improve inventory turns.
This enables them to optimize margins in the competitive food industry. In the event of a food recall growers can quickly identify if they are impacted, thus enhancing their brand and protecting revenues. Affected growers can localize the impact of relevant recalls to the field level, minimizing losses.
State officials are considering enhancements to the next two phases of the project, such as deploying RFID-enabled cellphones to enable more farms to participate, and implementing produce temperature tracking to reduce the threat of food spoilage. The initiative could be expanded to cover 5,000 State farms at full implementation.
“The Hawaii Produce Traceability initiative is an integral part of the State Food Safety Certification system,” says Dr. John Ryan, Administrator, Quality Assurance Division, State of Hawaii Department of Agriculture.
“This project provides the backbone for future and more preventive closed-loop sensor technologies which are capable of measuring and reporting biocontaminants and temperature variations via the RFID system as produce moves through the supply chain. The RFID system will provide managers with improved real-time control over potential food safety problems and help to prevent wide-spread human and economic impact."
UPM Raflatac tag performance is currently being tested on shipments between Armstrong Produce and the Kaneohe, Hawaii Marine Base commissary. This important addition to the pilot program is in compliance with the Department of Defense RFID directives. “The Hawaii Produce Traceability initiative is providing UPM Raflatac with the opportunity to showcase the versatility and durability of its ShortDipole tag, which provides exceptional yields and performance throughout its lifecycle,” says Jan Svoboda, Sales and Marketing Director, Americas, RFID, UPM Raflatac.
Many of Hawaii’s leading growers, distributors and retailers, including Sugarland Farms, Hamakua Heritage Farms, Kula Country Farms, Maui Pineapple, Twin Bridge Farms, Kahuku Brand, Armstrong Produce and Foodland Stores have chosen to participate in this voluntary program. The initiative tracked several types of fresh produce including e.g. asparagus, eggplants, pineapples and tomatoes.
Funding for the pilot program was provided by the U.S. Department of Agriculture, Economic Development Alliance of Hawaii, Federal State Marketing Improvement Program, and Hawaii Farm Bureau Federation. The pilot has been awarded with a Computerworld Laureate Gold Medal for using information technology to benefit society.
Recognizing the need to improve supply chain visibility and, ultimately, traceability, foodservice companies are beginning to explore the use of radio frequency identification (RFID) technology to trace products throughout the supply chain and gain operational efficiencies. RFID-enabled efficiencies can cut labor costs by as much as 50% in the food supply chain, according to Avery Dennison. With equipment and label costs falling further each year as adoption ramps up (labels cost around five cents each now compared with 25 cents in 2008), many companies believe the investment can deliver significant returns.
RFID in the supply chain is nothing new—it has been used in retail for more than a decade, particularly in the apparel industry, to improve inventory visibility and gain fulfillment efficiencies. Levi’s, Nike, Macy’s and Target are among the most vocal supporters of RFID and have used it to help make their supply chains more agile. They’ve cited RFID as a foundational technology necessary to support e-commerce.
Reducing out of stock, shrinkage and overstock through RFID in the fresh food supply chain: Evidence from an Italian retail pilot
Article type: Research Article
Authors: Bertolini, Massimo | Ferretti, Gino | Vignali, Giuseppe | Volpi, Andrea
Affiliations: Department of Industrial Engineering, University of Parma, Parma, Italy
Note:  Corresponding author: Massimo Bertolini, Eng., Ph.D., Assistant Professor-Mechanical Industrial Plants, Department of Industrial Engineering, University of Parma, Via G.P. Usberti 181/A, 43124 Parma, Italy. Tel.: +39 0521 905861; Fax: +39 0521 905705; E-mail: email@example.com
Abstract: The paper shows how to leverage RFID technology in fresh fast moving consumer goods (FMCG) industry, and, in particular, to optimally manage stock levels on shelves, shelves replenishment, and shrinkage prevention for fresh perishable products. We deployed a pilot project on a FMCG retail supply chain, encompassing a distribution centre and two stores of a major Italian retailer. About 60 products have been RFID tagged at case level. We real time tracked cases of products for 4 months, through the distribution chain all the way to the stores, where the RFID deployment made it possible to punctually monitor shelves stock levels, backroom stock levels and product shrinkage. We demonstrate that the out of stock (OOS) problem is just one piece of a broader picture, that is shelves stock optimization. The higher the stock level on the shelves, the lower the need for shelf replenishment, and thus the likelihood of an OOS. However, the capital holding costs and the risk for product shrinkage increase. The latter issue is particularly relevant for fresh perishable products. This pilot demonstrates that a retailer could reduce OOS, shrinkage and capital holding costs all together, by means of efficient RFID data management. Potential savings for fresh products account approx 1.7% of sale turnover. This study is the first pilot project which assesses the impact of RFID technology on the supply chain of fresh perishable products; a full roll-out of the project is being planned for the next future.
Learning from the successful implementations of RFID in retail, members of the Foodservice GS1 US Standards Initiative, a collaborative group of foodservice supply chain partners, are testing RFID to gain similar efficiencies and better serve their guests. RFID tags and readers add efficiency to the supply chain because they do not require the same line-of-sight scanning as barcodes. They can also enable the collection of information in real time and the ability to pinpoint where products are across the supply chain. Plus, in a world of prolonged social distancing due to COVID-19, there exists an opportunity to leverage RFID technology to create more contactless options to procure food.
RFID and Traceability
Looking toward the future of traceability, food companies are going to need to align on a common way to communicate product data to close any gaps in information in the supply chain. Global GS1 Standards play a key role in traceability as well as RFID implementations—having consistency in data exchange and product and location identification is critical to tracing products from farm to fork.
Good traceability starts at the source, where globally unique identifiers like Global Trade Item Numbers (GTINs) should be used on products in lieu of proprietary numbers that could create confusion across external systems. GTINs can be encoded into RFID tags along with additional product information, similar to how they are encoded into barcodes. In the food industry, case-level barcodes have traditionally served as the key point where information is connected to the flow of the product. Not only can RFID can help companies capture more data efficiently while products are in transit, it can streamline and validate the loading and receiving processes. Extended data such as batch number, lot number and expiration date are already becoming must-have information in the supply chain—RFID has the potential to take this further as tags can hold far more data than barcodes. This can enable full product provenance and enhance visibility through greater automation.
RFID and Inventory Visibility
When RFID tags are used, all supply chain partners that have RFID readers can enhance their real-time view of the product as it moves from stop to stop. Operators can then leverage RFID readers in their facilities to understand what they have available to sell. According to the Auburn University RFID Lab, RFID can raise inventory accuracy significantly, from 63% to 95%.
RFID is valuable for a foodservice operation simply because it reduces inventory uncertainty. For example, if an RFID reader is placed in a restaurant’s refrigerator, the operator will automatically know when there is a spike in a particular item being used, because the reader automates the transmission of inventory data. The operator sees in real time how much product is available to fulfill consumer demand. From a food safety perspective, RFID can play a role in helping operators intercept potentially harmful food before it reaches their guests because they have access to updated intelligence on what’s in stock and can take precautionary measures faster.
There are some inventory management differences between the way RFID is used in retail and how it may be used in foodservice. In foodservice, tags will be applied at the case level, instead of to individual items like in retail, simply due to the nature of how products are stored and transported. For example, there is no benefit to individually tagging a beef patty in the same way that there is in tagging a t-shirt in retail.
RFID and Our Contactless Future
RFID could be a key tool in our new normal, as it reduces the reliance on manual processes. For example, warehouse staff can more appropriately distance if RFID is used for cycle counts, and they can be freed up to perform other tasks. According to the Auburn University RFID Lab, cycle count times can be cut up to 96% when RFID is used. What usually takes three to four hours can be done in a few minutes without the need to manually scan line-of-sight barcodes.
As COVID-19 continues to affect the way we obtain food, the food industry has been forced to innovate faster and is becoming more digitally focused on the consumer-facing side as well. For many operators, this may be the only way to survive.
The efficiencies gained through using RFID can fuel evolving food distribution models. RFID can play a role in innovations from ensuring location-based accuracy for last-mile food delivery, to powering healthy vending machines while cafeterias in essential locations like hospitals remain closed.
Ultimately, while innovation was already a priority for many food companies prior to the pandemic, the complete shift in consumer behavior has become an undeniable catalyst for enhanced traceability, inventory management and contactless options. Look for RFID implementations to play a key role in the industry’s drive to enhance consumer confidence.
This article was originally posted on www.refrigeratedfrozenfood.com.