Effective sourcing strategies for perishable product supply chains

Abstract

Purpose -The purpose of this paper is to assess whether an existing sourcing strategy can effectively supply products of appropriate quality with acceptable levels of product waste if applied to an international perishable product supply chain. The authors also analyse whether the effectiveness of this sourcing strategy can be improved by including costs for expected shelf life losses while generating order policies. Design/methodology/approach -The performance of sourcing strategies is examined in a prototype international strawberry supply chain. Appropriate order policies were determined using parameters both with and without costs for expected shelf life losses. Shelf life losses during transport and storage were predicted using microbiological growth models. The performance of the resulting policies was assessed using a hybrid discrete event chain simulation model that includes continuous quality decay. Findings -The study's findings reveal that the order policies obtained with standard cost parameters result in poor product quality and large amounts of product waste. Also, including costs for expected shelf life losses in sourcing strategies significantly reduces product waste and improves product quality, although transportation costs rise.Practical implications -The study shows that in perishable product supply chain design a trade-off should be made between transportation costs, shortage costs, inventory costs, product waste, and expected shelf life losses. Originality/value -By presenting a generically applicable methodology for perishable product supply chain design, the authors contribute to research and practice efforts to reduce food waste. Furthermore, product quality information is included in supply chain network design, a research area that is still in its infancy.

Decision-making in cold chain logistics using data analytics: a literature review

“…Maintaining the balanced supply of raw milk to processing plant will be a challenge for private dairy firms (Kumar et al, 2012). What if analysis have been used by Rijpkema et al, (2014) to understand the trade-off between transportation costs, shortage costs, inventory costs, product waste, and expected shelf life losses and to determine the sourcing strategy for perishable food products. Interestingly we didn't find any study that uses real time data or subjective/qualitative data to optimize or prioritize procurement decision.…”

Value-Chain Wide Food Waste Management: A Systematic Literature Review

“…[45] proposed that efficient information sharing among value chain partners and adaption of material flows, which have a positive effect on reducing food waste in the food value chain. [46] found that food waste can be reduced through taking shelf-life losses into consideration, if the result of standard cost parameters in poor product quality and large amounts of product waste were determined. Meanwhile, other researchers on food logistics have investigated the different areas of logistics that can help to reduce the food waste, for example, [47] conducted a simulation through using the information on the quality of products that provided by intelligent packaging, the results indicated that quality-controlled logistics can substantially reduce food waste.…”

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