However if the store plans for the strawberries to last three days and they really last six days, the replenishment cost will be about twice as much as it should be. Good estimates of remaining life are critical for optimizing trade-offs between waste and transportation throughout the supply chain. It is also important to optimize trade-offs regarding the cost of capturing additional data versus improvements in shelf-life estimates.
With smart integration there is the potential to minimize the cost of food safety compliance and to more than offset this cost with better inventory management, less waste in the chain and higher quality food products to the end customer.
Criteria To Be Resolved
The critical questions to resolve are: (1) What are the most cost efficient integration strategies, methodologies and technologies to satisfy these requirements? (2) What are the potential economic benefits that might be possible as a result of this additional integration? (3) What additional processes, data, analytics, technology, people and capital are required to generate these benefits?
Ratliff is executive director, Georgia Tech Supply Chain & Logistics Institute Integrated Food Chain (IFC) Center, Atlanta.