Interaction models in the fresh fruit and vegetable supply

chain using new technologies for sustainability and quality

preservation

R. Reiche, M. Fritz and G. Schiefer

University of Bonn, Department of Food and Resource Economics, Chair for Business Management,
Organization and Information ManagementMeckenheimer Allee 174, 53115 Bonn, Germany; robert.
reiche@uni-bonn.de; fritz@uni-bonn.de; schiefer@uni-bonn.de

Abstract

Actors in the fresh fruit and vegetable supply chain have to deal with particularities, like sustainability,
global sourcing, quality preservation and therefore the optimization of efficiency in their logistic
strategies. The consumer demand for fresh fruits and vegetables all over the year is a special
challenge of this chain, which strongly impacts all of the particularities. Hence, the adoption of
new technologies for improving information logistic can have important benefits to meet these
conditions. One important benefit is the collection and provision of information, which can have
an impact on the strategies process efficiency of enterprises. In this paper, different scenarios using
new technologies, like Radio Frequency Identification (RFID) and wireless sensor networks, for
optimizing the logistics strategies in the fresh fruit supply chain are discussed.

Keywords: information logistics, RFID, wireless sensor networks, food chain

Introduction

Actors in the german fresh fruit and vegetable supply chain have to deal with complexities, like
sustainability, global sourcing and therefore the optimization of efficiency in their logistic strategies
and production processes. Optimization of intra-enterprise logistic processes is a key to meet
these complexities in an efficient and sustainable way (Fleischmann, 2008, Herter, 2000). The
consumers’ expectations for fresh, qualitative and various fruits and vegetables all over the year
are particularities, which are unique in the food supply chain. The procurement in the fresh fruit
and vegetable supply chain is globalised due to the worldwide production in different cultivation
areas and the consumers’ demand on a versatile product portfolio. Quality preservation and the
reduction of food losses during transports is one special challenge, which actors in the chain have to
meet. The exchange of product-related information between all actors can therefore have important
benefits for improving production processes. The evaluation of interactions between production
processes, information processes and technology is necessary for understanding the improvement
potential. In this paper, two scenarios using new technological concepts and their possible impact
on processes along the chain are discussed.

Literature background

The fresh fruit and vegetable supply chain is characterised by many national and international
small and medium-sized enterprises at the production stage. The middle stage is represented by
trade-oriented medium sized enterprises like cooperative production and marketing societies,
wholesalers and importers. The upper end of the chain is represented by large-scale retail groups,

EFITA conference ’09 667

but also includes gastronomy as well as speciality and small food retail stores. Because of a low
degree of self-sufficiency on fruits (ZMP, 2006a) and vegetables (ZMP, 2006b), and therefore high
import rates, long transport ways between foreign producers and the german retailers are necessary
to fulfil the consumers’ demand. Quality maintenance during long transports is one special challenge
according to economical and biological meanings. Fruit and vegetables are mostly perishable, and if
care is not taken in their harvesting, handling and transport, they will soon decay and become unfit
for consumers’ expectations (Grolleaud, 1989). If quality preservation techniques are failing, the
product can remain nonmarketable and in worst case result in food losses due to contaminations,
damage or the biological degeneration process. Reduction of this wastage is, in the meaning of
sustainability, a challenge which increases the economical efficiency.
The challenging particularities in the food sector require new initiatives and approaches of
information management (Schiefer, 2006). According to Fritz (2003), an interfirm information
flow and exchange is an essential need due to the sector’s particularities. Hence, the food chains
are according to Bouma (2001), characterised through traditional relationships with a measure of
mistrust and a series of information deficiencies along the chain, which makes information exchange
between enterprises in this sector a difficult task. For meeting the challenges of food safety and
product quality preservation, currently a lack of comprehensive real-time or near to real-time
product-related information reduce the chances for rapid response mechanisms (Deasy, 2002).
Two examples of collection and provision of necessary product-related information, the product
observation during transport and the products’ residue status, are depicted in Figure 1. Both
information are needed at different stages of the chain for efficient logistic and risk management.
According to Folinas (2006) and Schiefer (2006), track and tracing is the base for linking products
meanings. Fruit and vegetables are mostly perishable, and if care is not taken in their
with product-related information. The track and tracing information flow can be divided into ‘full
harvesting, handling and transport, they will soon decay and become unfit for consumers’
traceability information
expectations (Grolleaudprovision
1989). Iffrom the production
quality preservationtotechniques
the consumer’, and ‘One
are failing, the step up-one
product can step
down’ information flow (Folinas, 2006). The provision of full traceability
remain nonmarketable and in worst case result in food losses due to contaminations, damage information includes
the or
provision of all product-related
the biological information
degeneration process. with the
Reduction of product along the
this wastage chain
is, in the tomeaning
the consumer.
of
Thissustainability, a challenge
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for organic the economical
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However, nottoallthe sector’s
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of full traceability. The ‘one relationships
step up-one stepwithdown’
a
measure of mistrust and a series of information deficiencies along the chain, which makes
information flow is referring to the EC Regulation 178/2002 (EC 2002). This information flow
information exchange between enterprises in this sector a difficult task. For meeting the
model is, according
challenges of foodtosafety
Folinas
and(2006),
productthe mostpreservation,
quality often used model in food
currently a lackchains. In this case, the
of comprehensive
actors have a restricted access to product related information from previous
real-time or near to real-time product-related information reduce the chances for rapid and following stages.
response mechanisms (Deasy 2002).

Figure 1: Detail on the fresh fruit and vegetable supply chain

Figure 1. Detail on the fresh fruit and vegetable supply chain.
Two examples of collection and provision of necessary product-related information, the
product observation during transport and the products’ residue status, are depicted in figure 1.
Both information are needed at different stages of the chain for efficient logistic and risk
668
management. EFITA conference ’09
According to Folinas (2006) and Schiefer (2006), track and tracing is the base for linking
products with product-related information. The track and tracing information flow can be
Pesticide residues are legally restricted by the EC Regulations 1881/2006 (EC 2006) and 396/2005
(EC 2005). Plant protection is necessary for protecting the produce against biological contamination,
but even if they are used appropriate and according to specifications, residues can remain on the
harvested produce. These residues can become a risk for traders and the consumers’ health if they
exceed the regulative limits. Therefore the residue status has to be monitored in the production
stage and is an important requirement of quality management systems in this sector. The quality
management systems are implemented for products from the national producers, but lacks with
imported products and products which are traded between enterprises with different certification
(QS, 2009). Agricultural cooperative societies use pre-harvest product analysis as a control
mechanism for their members as well as retailers use post-harvest product analysis for monitoring
their suppliers. The chain-wide provision of pesticide status reports is a necessity and a challenge
for traceability activities of all actors.
According to Jedermann et al. (2006) ten percent of all product losses in the fresh fruit and vegetable
chain arise from product quality deterioration caused by deficiencies at transport processes. Quality
preservation during transport has to be adjusted to the product specifications, like humidity,
temperature and the biological degeneration process. Therefore a timely, reliable and efficient
logistic is needed to fulfil these requirements. Today, several concepts for transport supervision
exist. The information exchange between the logistic service providers, which are mostly third
party enterprises and the chain actors, is necessary for efficient logistics and distribution processes.

Framework for an interaction model

Modelling of interrelations between production and information processes as well as supportive

technology is an exceedingly difficult task. The usage of static and dynamic models, in order to
describe these correlations, provides a toolset for analysis, documentation and improvement of
interactions between information and production processes (Lehmann et al., 2009). According to
Webster (2009) interaction is defined as a ‘[..] mutual or reciprocal action or influence [..]’. The
interactions and interrelations within this information management context are based on basic cause
and effect relations and different feedbacks on one single event.
The logistic concept describes a cross-section function of the management of an enterprise. The
field of activities of the logistics consists of the co-ordination of the material or product flow and the
flow of information, necessary to that (Platz, 2005). Process-oriented information logistics aim at
supporting the productive business activity of an enterprise in the functional context through supply
of information and decision preparation effectively and efficiently. Additionally, the concept of
process-oriented information logistic describes the functionalities for data analysis and information
provision, which are aiming for support of process-inherent decision with information (Bucher,
2008). In this paper, the focus is on the supportive technology, which allows the connection between
information, products and processes within an enterprise as well as between enterprises. For analysis
of these interrelations a framework is provided and depicted in Figure 2.
Based on the complexities in the fresh fruit and vegetable sector, requirements for product-related
information, production processes and the supportive technology can be defined. Product-related
information includes all information related to the product, its characteristics, origin, handling and
status as well as economic properties. The availability of product-related information is necessary
for process-inherent decisions, which impact all business process. Supportive Technology in this
context includes all available technology for acquisition, storage, processing and provision of
product-related information according to the process-oriented information logistic concept. The
supportive technology has to fulfil the process requirements and be able to provide the information

EFITA conference ’09 669

 decision with information (Bucher 2008). In this paper, the focus is on the supportive
technology, which allows the connection between information, products and processes within
an enterprise as well as between enterprises. For analysis of these interrelations a framework
is provided and depicted in figure 2.

Figure2.
Figure 2: Framework
Framework for decision-oriented interactions interactions
for decision-oriented between processes, information
between and technology
processes, (adapted and
information
from Lehmann et. al 2009 and modified)
technology (adapted from Lehmann et al., 2009 and modified).
Based on the complexities in the fresh fruit and vegetable sector, requirements for product-
related information, production processes and the supportive technology can be defined.
timely and efficiently. This framework is focussing on the interaction between technology, process
and information as well as on the consequences which occur by the availability of product-related
information. But not every technology is suitable or feasible for every production process due to
time criticality and feasibility as well as economic efficiency.
The following scenarios include particular problems in the fresh fruit and vegetable supply chains
as well as application scenarios for supportive technology and processes where product-related
information is needed.

Scenario 1: RFID Tags as enabler for full traceability

Radio Frequency Identification (RFID) is designated as a key technology for the Food Supply
Chain (Rizzotto, 2002). The development of this technology, the standardisation process and its
approval are in progress. However, the area-wide implementation of the RFID-Technology is still
at the beginning. A survey among small and medium-sized businesses on the potential of RFID-
Technology showed that approximately 70 percent of the respondents pointed out that high potentials
in container and cargo management, logistics, traceability of goods and cargo exist (FTK, 2006).
The inter-corporate application of RFID-technology includes network effects, if the same RFID-
Technology is used all over the network (Strassner, 2005). Currently, only a few inter-enterprise
logistics applications are developed and driven by large-scale retail groups like Wal-Mart, Metro
AG or Tesco.
Especially in the fresh fruit and vegetable sector, service providers for packaging can have an
important impact on the identification technologies, which are used. The biggest service providers
for reusable plastic crates (RPC), EuroPoolSystem and Ifco System, provide crates for fresh produce
in different sizes and with different identification technology on every crate. RFID plays in the
providers’ research and development facilities an important role, which is documented by different
press releases and publications (see examples from EuroPoolSystem, 2007; RFID Journal, 2007).
The estimated usage of RPC for fresh fruit and vegetables is around 35 percent (LZ-NET 2009).
Due to the economical and logistical benefits of reusable plastic crates, nearly all large-scale retail
companies have contracted one of these service providers and require the usage of RPCs by their
suppliers. This results in a raising rate of RPC usage for packaging fresh fruits and vegetables,
which makes the identification on crate base using the same identification technology along the
chain possible. For making reliable decisions on the marketability of fruits and vegetables, the
information on the pesticide status is required. Due to the missing information exchange between
the agricultural cooperative society and the distribution centre on the pesticide status a proactive
reaction on possible contaminations is nearly impossible for decision makers in the following stages.

670 EFITA conference ’09

The scenario, which is depicted in Figure 3, focuses on the problem of information exchange on
the products’ pesticide status between actors. Production co-operations initiate pre-harvest sample-
based analyses by independent or certified laboratories. The laboratory result stays in the enterprise,
which ordered the analysis. The relation between box identification (BoxID), product and its origin
can be recorded at the agricultural cooperative society. Laboratory’s results can be aggregated and
added to this bundled product-related information. Retailers procure products from this particular
society and the products are delivered in RPC-crates. The distribution centre registers the incoming
products and BoxIDs and sends a request based on the BoxID to the agricultural cooperative society.
The response includes the BoxID and the required information on the pesticide status in the way of
an positive or negative signal. This exchange can be realised by web-services or software agents.
This enables the possibility of rapid reaction mechanisms in cases where products can be a risk to
human health due to residues.

Scenario 2: Transport supervision using Wireless Sensor Networks for Shelf Life
prediction

The distribution of fresh fruits and vegetables is a complex task. The transport conditions have to
meet the product requirements for quality preservation. The monitoring of transport parameters, i.e.
temperature, for perishable food products is legally required by national regulations (BGBl, 2007)
and different logistic service providers implemented several different procedures according to that
requirement. The commonly used temperature check at the delivery points in the chain just represent
the temperature of products at this point in time, but do not represent the transport conditions during
the whole transport way. Possible damages from deficient environmental conditions are discovered
in the goods inward and control process at the receiving actor.
Jedermann et al. (2006) introduced an autonomous sensor network which combines RFID, sensor
networks and software agents as well as transmission technology for transport supervision and the
evaluation of product quality according to environmental conditions. This approach is depicted in
Figure 4 as sensor network. The sensor network enables a software agent to calculate the remaining
shelf life of the product, which bases on a biological degeneration model. The information on the
quality status of products can support decision makers for optimizing their distribution processes
along the chain. During transport a near to real-time data transmission on truck identification,

Figure 3: Scenario overview on pesticide status using RFID for product identification
Figure 3. Scenario overview on pesticide status using RFID for product identification.
The scenario, which is depicted in Figure 3, focuses on the problem of information exchange
on the products’ pesticide status between actors. Production co-operations initiate pre-harvest
sample-based
EFITA conferenceanalyses
’09 by independent or certified laboratories. The laboratory result stays
671in
the enterprise, which ordered the analysis. The relation between box identification (BoxID),
product and its origin can be recorded at the agricultural cooperative society. Laboratory’s
results can be aggregated and added to this bundled product-related information. Retailers
 Figure 4: Scenario overview Transport supervision
Figure 4. Scenario overview Transport supervision.
Jedermann et al. (2006) introduced an autonomous sensor network which combines RFID,
sensor networks and software agents as well as transmission technology for transport
supervision and the evaluation of product quality according to environmental conditions. This
product status, truck position and other parameters from the truck to a logistic service provider
approach is depicted in Figure 4 as sensor network. The sensor network enables a software
enable rapidtodecisions
agent calculateif problems
the remaining shelf life ofet al.,
occur (Jedermann the 2006).
product, These parameters
which bases on can abebiological
shared
withdegeneration
the goods sending and the receiving party for making the transport process
model. The information on the quality status of products can support decisionas transparent as
possible. A possible improvement of the business processes in the retailers’ distribution
makers for optimizing their distribution processes along the chain. During transport a near to centre can
be the implementation
real-time of a ‘First-Expired-First-Out’
data transmission logistic
on truck identification, model status,
product in ordertruck
to reduce food and
position losses.
other
Another benefit of transport supervision is gaining knowledge on the transports
parameters from the truck to a logistic service provider enable rapid decisions if problems position. Due to the
timeoccur (Jedermann
criticality et. al 2006).
in the distribution Thesefruits
of fresh parameters can be shared
and vegetables, withdelivery
the timely the goods sending
is an and the
mandatory
receivingforparty
requirement for making
an optimal the transport
further distribution process
along as transparent
the chain. The provision as of
possible.
informationA possible
on a
improvement
cancellation of the
of ordered business
supplies offersprocesses in the
the possibility for retailers’
re-arranging distribution centre
supplies and can be
to reduce out-the
implementation
of-stock situations inofthea “First-Expired-First-Out”
retail stores (Kambil, 2002). logistic model in order to reduce food losses.
Another benefit of transport supervision is gaining knowledge on the transports position. Due
to the time criticality in the distribution of fresh fruits and vegetables, the timely delivery is an
Discussion
mandatory requirement for an optimal further distribution along the chain. The provision of
information
According on a cancellation
to the german LebensmittelofPraxisordered supplies
Journal offersproblems
the biggest the possibility for inre-arranging
of retailers the food
supplies
sector and years
in the past to reduce
and out-of-stock
the predictionsituations
for 2009 inarethe retailtostores
related (Kambil 2002).
cost pressure, price competition,
freshness, product quality and the implementation of new technologies (LP, 2009). The evaluation
Discussion
of case studies on the implementation of RFID Technology show, that the technology is often
According to the german Lebensmittel Praxis Journal the biggest problems of retailers in the
usedfood
for intra-enterprise
sector in the past processes and the
years and to replace commonly
prediction for 2009 usedareidentification
related to cost technology
pressure, forprice
automation. Only few case studies are available where RFID Technology
competition, freshness, product quality and the implementation of new technologies is used in a chain wide(LP
application
2009). The context.
evaluation of case studies on the implementation of RFID Technology show, that
The the
provided examples
technology of new
is often concepts
used show that the application
for intra-enterprise processes and of RFID and wireless
to replace commonly sensorused
networks can have a possible benefit for decision processes. The mistrust
identification technology for automation. Only few case studies are available where RFIDand the lack of information
Technology
exchange (Bouma, is used
2001)inmake
a chain wide application
implementations context. task for actors in the chain. Even if
a difficult
necessary
The provided examples of new concepts show that theand
information is exchanged, the form of aggregation provision of
application of information is an
RFID and wireless
important
sensor networks can have a possible benefit for decision processes. The mistrust and thethe
success factor for feasibility and rapid response mechanisms in crisis. This refers to lack
timeofcriticality
informationin theexchange
distribution of fresh
(Bouma products.
2001) The timeframe where
make implementations these products
a difficult stay with
task for actors in the
one chain.
actor isEvenveryifshort and theinformation
necessary provision of is timely critical
exchanged, theinformation, like the information
form of aggregation and provision on of
information
the quality status isof an important
a product, for success factor
intervention onfor feasibility
occurring risksand rapid
offers response mechanisms
optimization potential for in
crisis. This
distribution refersattothe
processes thesame
timetime.
criticality in the distribution of fresh products. The timeframe

672 EFITA conference ’09

The investments in RFID and other related technology have to create a certain extra value for the
enterprises to legitimate them. The benefits of RFID technology for different parts of the supply
chain are analysed in many papers in the last years (i.e. Kambil, 2002). The innovations and technical
applications are mostly driven by retail companies.

Conclusion

In this paper, we discussed two scenarios and their benefits for process-inherent decisions in the
fresh fruit and vegetable sector. Technology itself is able to alleviate product-related uncertainties,
if the product-related information is shared among the actors in the supply chain. The traditional
characteristic of a high degree of mistrust between the stages has to be lowered through trust
building arrangements and co-determination of actors with sharing of their collected information.
The enterprises in this sector are forced to change their information strategies due to regulative
requirements as well as for process optimisation and innovation in the context of value and supply
chain management. There are some challenging particularities in the horticulture sector, which
have to be met to get chain wide projects using technology innovations started. The two presented
scenarios are theoretical case studies and their implementation in the sector is just at the beginning
and evaluation of effectiveness has to proof if they can be the base for permanent changes in
logistic processes.

Acknowledgements

The paper has benefitted from discussions in the CuteLoop Project (www.cuteloop.eu).

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