Stakeholders across the perishables supply chain should adopt a digital approach to risk management to reduce waste and create value by extending shelf life. Eric Mauroux, Cool Chain Association (CCA) board member and founder and CEO of FreshBizDev shared this and other views with delegates at the Fruit Logistica conference in April.
The industry has been slow to adopt new technologies, and a lack of standardized reporting across the supply chain means that the value proposition in perishables logistics can vary enormously across trade lanes.
By sharing data and adopting common Key Performance Indicators (KPI’s), stakeholders from across the cool chain will be able to better understand which temperature excursions need action and plan for smarter logistics solutions, which will reduce waste.
Common KPIs will reduce waste
“The cost of claim is not the only criteria to evaluate the cost of inefficiencies,” said Mauroux.
“Value destruction related to reduced shelf-life and waste should also be included when assessing the total logistical cost of a shipment. Having a digital approach to risk, which considers the total cost, is an opportunity to better understand the inefficiencies of the supply chain so that we can develop new solutions and build realistic business cases to invest in smarter logistics for the fresh produce trade.”
He said stakeholders should consider moving from a strict contractual framework towards new collaborative ways of working, including data-sharing and shared objectives to improve cool chain performance.
“The virtual world is a perfect playground to try out various solutions based on realistic scenarios,” Mauroux said. “We can collectively create value by improving the shelf life of perishables.”
The CCA has strongly backed a KPI metric for perishables called the Degree-Hour, which takes both temperature and time into consideration to give an absolute figure against which consignments on a given journey can be measured.
Using the metric, temperature excursions are acceptable within a defined bandwidth provided overall Degree-Hours are maintained at a certain score for the shipment across its end-to-end journey.
Mauroux sponsors the CCA’s risk management committee, which includes shipper, airline, and forwarder members, led by Stefan Braun, managing director of SmartCAE.
The group is the first committee under the CCA’s technical committee project, which aims to assist, analyze, study, and manage critical control points affecting product quality along the cool chain, as well as developing standards, and initiating projects.