An overview of share shrink/waste occurs in the food cold chain and how retail grocers can proactively manage inventory and quality to improve customer satisfaction and profitability.
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The true cause of $17 billion cold chain shrink slide share
1. The True Cause of $17 Billion Cold
Chain Shrink
Updated 11.10.11 of the $17 Billion Cold Chain Shrink
The True Cause
2. Introduction
The new Retail Grocer landscape:
• Retail grocers are facing a tough,
new environment.
• Retailers are looking at new ways
to optimize cold chain operations
due to:
- New regulations
- Fickle customers
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The True Cause of the $17 Billion Cold | Updated 11.10.11
3. The $35B Blind Spot
Wasted produce
• One third of shipped produce is
wasted annually.
• $35 billion in perishable shrink.
• Stores lose 20% of available
perishable profit to shrink.
• Reducing perishable shrinkage by
20% will increase total store profit by
33%.
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4. The $35B Blind Spot
Where does shrink begin?
• At the store?
• In the truck?
• At the distribution center?
• Earlier?
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5. The $35B Blind Spot
Shrink at the store:
• Many grocers think waste due
to spoilage occurs after it is
received at the store.
• Assumes uniform aging and
shipment does not change from
field to store.
• If quality was compromised,
grocers would have rejected
shipment.
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6. Digging Deeper: Shrink Starts in the Field
Shrink starts in the field
• ~50% due to bad post harvest practices
$17 billion cold chain waste per year!
Post Harvest
Total Shrink Practices
Other
0 10 20 30 40
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Intelleflex PowerPoint Template GuidelinesChain Shrink
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7. Truck-level Monitoring
Truck-level monitoring:
• Typically uses one or two
temperature monitors per truck.
• Does not monitor condition of all
pallets – pallet level variation is
significant and impacts quality.
• Visual inspection is not adequate –
it is a lagging indicator and
identifies problems after they have
occurred.
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Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
8. Truck-level Monitoring
Consider this example: a truck with 8 pallets…
Status unknown
0 Days left
2 Days left
4 Days left
6 Days left
Truck arrives at DC; condition of
individual pallets is unknown
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
9. Truck-level Monitoring
Status unknown
? ? ? ? 0 Days left
2 Days left
4 Days left
? ? ? 6 Days left
One pallet is sampled. Status of
other pallets remains unknown.
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
10. Truck-level Monitoring
Status unknown
0 Days left
2 Days left
4 Days left
6 Days left
Assumption: Entire shipment has 6
full days of shelf life left
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
11. Truck-level Monitoring
Status unknown
0 Days left
2 Days left
4 Days left
6 Days left
Reality: Only 25% of the shipment
has 6 days left.
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
12. Implications
Sampling only one pallet results in a:
• 50% chance of rejecting entire shipment (100% waste)
• 25% chance of assuming the entire shipment has 2
days of shelf life
• 25% chance of assuming the entire shipment has 6
days of shelf life
All cases lead to waste or unsatisfied
customers due to poor product quality!
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Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
13. Intelleflex Solution
Intelleflex Solution
• Achieves pallet-level monitoring
• Powerful ROI at under a dollar per pallet per use
• Tags can be read without unpacking trailers or pallets
• Reduces waste at the store by managing temperature from field to fork
using FEFO
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
14. Pallet-level Monitoring
Pallet-level monitoring
ensures:
• Quality and safety
• Profitability
• Traceability
End Result:
• Happy customers
• Reduced out of stocks
• Reduced overstocks
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
15. Interested in Learning More?
To learn more about cost-effective pallet-level tracking and
addressing traceability requirements, download the full whitepaper at
www.intelleflex.com/cut-retail-waste
or email
info@intelleflex.com
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11
Editor's Notes
Each pallet has its own temperature history due to handling, harvest conditions, delays, weather, etcShrink only becomes visible at the store because visual inspection is a lagging indicatorDoesn’t fit
To illustrate further, in this example, you a have a 50% chance of rejecting the entire shipment, a 25% chance of assuming the entire shipment has 2 days of shelf life, and a 25% chance of assuming the entire shipment has 6 days of shelf life left. Yet, in all cases, sampling only one pallet results in waste or unsatisfied customers.
To illustrate further, in this example, you a have a 50% chance of rejecting the entire shipment, a 25% chance of assuming the entire shipment has 2 days of shelf life, and a 25% chance of assuming the entire shipment has 6 days of shelf life left. Yet, in all cases, sampling only one pallet results in waste or unsatisfied customers.
To illustrate further, in this example, you a have a 50% chance of rejecting the entire shipment, a 25% chance of assuming the entire shipment has 2 days of shelf life, and a 25% chance of assuming the entire shipment has 6 days of shelf life left. Yet, in all cases, sampling only one pallet results in waste or unsatisfied customers.
To illustrate further, in this example, you a have a 50% chance of rejecting the entire shipment, a 25% chance of assuming the entire shipment has 2 days of shelf life, and a 25% chance of assuming the entire shipment has 6 days of shelf life left. Yet, in all cases, sampling only one pallet results in waste or unsatisfied customers.
To illustrate further, in this example, you a have a 50% chance of rejecting the entire shipment, a 25% chance of assuming the entire shipment has 2 days of shelf life, and a 25% chance of assuming the entire shipment has 6 days of shelf life left. Yet, in all cases, sampling only one pallet results in waste or unsatisfied customers.