Fresh Logistics: New Opportunities with an integral approach

Toine Timmermans
Wageningen UR Quality in Chains
toine.timmermans@wur.nl

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Agenda
The agriculture supply chain Dominant Trends in agriculture Trends in agriculture logistics Fresh logistics: An impulse for Supply Chain redesign Case descriptions Conclusions

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Extending fresh borders

Modality shift: From airplane to reefer container

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The Agriculture Supply Chain

Primary Production

Trade / Storage

Processing

Retailing / distribution

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Dominant Trends in Agriculture Supply Chains

Dominant power of big retailing companies Supply Chain Consolidation Outsourcing Increased focus on traceability Wider sourcing of supplies: more and more globally
Lower prices (low cost countries) Diversification of the product range beyond what can be produced locally Year round product availability Advances in IT have increased the visibility of long supply chain and therefore easier to manage
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Trends in Agriculture Logistics

Global supply networks
Spatial concentration of production: economies of scale. Inventory centralization Longer distance movements: trunk/line haul and local delivery operation. Client order decoupling point: To get closer to market

Inkoop

Onderdelen fabricage

Assemblage

Distributie

Verkoop

KOOP
en viteit e acti eerd ebas g

KOOP Maken voor centrale voorraad KOOP Assembleren op order

Maken voor lokale voorraad

g lannin Op p

KOOP Maken op order KOOP Inkoop en maken op order

a erichte Klantg iten ctivite

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Trends in Agriculture Logistics

Efficiency
Demand push: forecast Floating stock Modularity Value added services Variety of transport modes

Responsiveness
Demand pull from POS data Quick Response / ECR Break bulk / pre-pick and cross dock via RDCs Flexible production schemes Predominantly road transport
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Product Quality

Fresh Logistics: Trade-off analysis

Costs

Service

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Trends in Agriculture Logistics

Technological innovation

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Trends in Agriculture Logistics

Intermodality / modal shift
Wider sourcing of supplies: sea/air road transport Supply chain costs: intense competition commodities Increased transaction - volume due to consolidation Limitations road transport: congestion, pricing, regulation, ..

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Fresh Logistics: An impulse for Supply Chain redesign

Initial Quality

Conditions

Shelf life

Logistics Opportunities Supply Chain Configuration and Added Value concepts (e.g. ready to eat products)
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Fresh Logistics: An impulse for Supply Chain redesign

Simulation and scenario analysis: Aladin
Agents: Food factory or grower: biological variation
Transportation unit: type of transport + settings? Storing / distribution unit: climate control settings? Food product: specific product + quality decay model Demand controller

Impact of different supply chain configurations / use of different transport modes on: shelf life, service, cost: Potential Solutions
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Fresh Logistics: An impulse for Supply Chain redesign Testing

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Fresh Logistics: An impulse for Supply Chain redesign Pilot scale testing

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Fresh Logistics: An impulse for Supply Chain redesign

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Case: From air cargo to deep sea shipping

Replace air by sea transport: Product: initial quality, cvs Climate conditions Packaging Logistics:
lead time organisation

Integral solution

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Case: From air cargo to deep sea shipping

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Case: Optimal fresh cut pineapple chain Ghana Rotterdam

Scenario 1 Boat transport chain
Sea harbour Ghana Rotterdam

Local production Barendrecht (portioning and order picking) Importer (storage)

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Case: Optimal fresh cut pineapple chain Ghana Rotterdam

Scenario 2
Processing & portioning

Local processing Air transport chain

Airport Ghana Amsterdam

Local Production Barendrecht (storage & order picking)

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Case: Optimal fresh cut pineapple chain Ghana Rotterdam

Scenario 3
Airport Ghana Processing (bulk)

Air transport chain

Amsterdam

Local Production Barendrecht (portioning and order picking)

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Case: Regional Consolidation

movie

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Agro parks: A systems innovation in the concept of urban agrofood production and processing Spatial clustering of different agro-production chains Spatial combination of agro-processing and non-agro functions (building, industrial estate or region) Scale increase in production further enables industrial processing Application of principles of industrial ecology, i.e. mutual use of waste and by-products Reduction of transport and veterinary risks CRUX: clustering provides context for sustainable innovations
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Agropark development: From traditional production towards chain production

Raw Materials

Processing

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Basic principle: Systems redesign while focussing on issues that matter in sustainable development. Planet: From focus on production chain towards focus on flows of energy and matter. People: From focus on the technical system towards focus on organisation and knowledge management. Profit: Focus on integral production network for improved chain relations, cost reduction and quality management.

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Agro Park: Examples WAZ-Holland Park, Changzhou, China

Green environment industrial district Central residents and service district

Eco-Agro sightseeing district (Agropark) Ecological recreation district

Gehu Lake

Park is part of suburban development plan for Changzhou City: Replacement existing agricultural holdings elsewhere in the polder. Recreation and sightseeing function for local residents. Theme in the park Holland landscape and agriculture.
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WAZ-Holland Park (China)

Central processing of remainders and by products Vegetables in multi-story greenhouse

Composting facility

Pot plants Mushrooms Deer Bonsai

Chicken Turtles Dairy

Spatial clustering of Chinese and Dutch Holdings. Intensive exchange of remainders and byproducts in central processing unit. Combination with market place and sightseeing park Planned start: 2007
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Combination of agropark, market place and sightseeing park in WAZ-Holland Park

Market place:
Education Showcase Hotels & restaurants Sales

Sightseeing Park
Recreation Education Demonstration Restaurants

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Conclusions
Agrifood chains & networks are getting more dynamic, insecure and complex Robust logistic redesign needs a multidisciplinary and integral approach Modeling, visualization & simulation tools can connect different disciplines Type of cases: from pragmatic, business driven to visionary and ambitious

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Thanks for your attention

Agrotechnology & Food Sciences Group

Wageningen University & Research centre

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