Fresh Logistics: New Opportunities with an integral approach
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1 Fresh Logistics: New Opportunities with an integral approach Toine Timmermans Wageningen UR Quality in Chains page 1 Agenda The agriculture supply chain Dominant Trends in agriculture Trends in agriculture logistics Fresh logistics: An impulse for Supply Chain redesign Case descriptions Conclusions page 2
2 Extending fresh borders Modality shift: From airplane to reefer container page 3 The Agriculture Supply Chain Primary Production Trade / Storage Processing Retailing / distribution page 4
3 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 page 5 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 Op planning gebaseerde activiteiten KOOP KOOP KOOP Assembleren op order KOOP Maken voor centrale voorraad Maken voor lokale voorraad KOOP Maken op order Inkoop en maken op order Klantgerichte activiteiten page 6
4 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 RDC s Flexible production schemes Predominantly road transport page 7 Product Quality Fresh Logistics: Trade-off analysis Costs Service page 8
5 Trends in Agriculture Logistics Technological innovation page 9 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,.. page 10
6 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) page 11 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 page 12
7 Fresh Logistics: An impulse for Supply Chain redesign Testing page 13 Fresh Logistics: An impulse for Supply Chain redesign Pilot scale testing page 14
8 Fresh Logistics: An impulse for Supply Chain redesign page 15 Case: From air cargo to deep sea shipping Replace air by sea transport: Product: initial quality, cv s Climate conditions Packaging Logistics: lead time organisation Integral solution page 16
9 Case: From air cargo to deep sea shipping page 17 Case: Optimal fresh cut pineapple chain Ghana Rotterdam Scenario 1 Sea harbour Ghana Boat transport chain Rotterdam Local production Barendrecht (portioning and order picking) Importer (storage) page 18
10 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) page 19 Case: Optimal fresh cut pineapple chain Ghana Rotterdam Scenario 3 Processing (bulk) Airport Ghana Air transport chain Amsterdam Local Production Barendrecht (portioning and order picking) page 20
11 Case: Regional Consolidation movie page 21 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 page 22
12 Agropark development: From traditional production towards chain production Raw Materials Processing page 23 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. page 24
13 Agro Park: Examples WAZ-Holland Park, Changzhou, China Central residents and service district Green environment industrial district Eco-Agro sightseeing district (Agropark) Ecological recreation district 鬲湖 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. page 25 WAZ-Holland Park (China) Central processing of remainders and by products Composting facility Pot plants Mushrooms Vegetables in multi-story greenhouse Deer Chicken Bonsai 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 page 26
14 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 page 27 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 page 28
15 Thanks for your attention Agrotechnology & Food Sciences Group Wageningen University & Research centre page 29
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