Title : Application of Electronic Enablers for Supply Chain Management of Dairy Products Submitted to: Dr. Mohamed Baymout Prepared by: Alhassan Abdullahi Ohiomah (7128495) Shihab Ahmed (7505149) Loay Ahmed Alkibsi (6697666) Kwasi Appiah (7516413) Pouria Ghaternabi (7050754)

1. E-Supply Chain Technologies & Applications
EBC 6230 – Winter Session 2014
Title :
Application of Electronic Enablers
for Supply Chain Management
of Dairy Products
Submitted to:
Dr. Mohamed Baymout
Prepared by:
Alhassan Abdullahi Ohiomah (7128495)
Shihab Ahmed (7505149)
Loay Ahmed Alkibsi (6697666)
Kwasi Appiah (7516413)
Pouria Ghaternabi (7050754)

2. Agenda
Industry overview
 Upstream Supply Chain
 Downstream Supply Chain
 Supply Chain Challenges
 Traceability
 Case Study


3. Dairy Industry Overview
2.1 %
0.2%
85%
11.1%
1.4%

4. Consumption

5. Production

6. Milk Supply Chain Functions


Upstream Supply Chain
Downstream Supply Chain
Milk Collection Sources
Small Cooperative
Direct Farm
Dairy Boards
 Co-operatives
 Direct from Farm
 Dairy Boards

7. Upstream Supply Chain

8. Down Stream Supply Chain
Materials Flow
Consumers
Information Flow
Transportation
Retailers
Distribution
Center
Dairy Products
Processing
Plant
Labeling
Manufacturing
Packaging
Corrugated
Paper / Plastic
Company

9. Dairy Industry Challenges
Diverse Food categories
• Milk & other goods
• Beverage to powder
• Solid to viscous
• Packaging: canned, bagged, boxed
Price Deflation
• Low-margin business
• Customers demanding lower prices
Power shift in industry
• Power shifting from manufactures to
Retailers (Wal-mart, etc)
• Everyday low prices strategy
Need to deal with the
complexity and decreasing
prices

10. Dairy Industry Challenges
Seasonal fluctuations
Changing quality of raw
materials.
• Farmers can produce as much or
as high a quality during certain
seasons of the summer
Consumer demands
changes based on
seasons.
• More ice cream in summer, less
in winter.
Need to control and efficiently
manage variances in the quality
and quantity of raw milk
collected
Lack of access to real-time data about
the milk can lead to inefficient raw
material utilization and inaccurate
demand planning and forecasting further
down the supply chain

11. Dairy Industry Challenges
Changing consumer taste and
requirements (Mass customization)
• Diverse population with differing tastes.
• Changing lifestyle (more health
conscience)
• Expect High Quality, availability, and
value.
Need to produce and deliver
increasingly diverse product lines
with differing labeling &
packaging requirements
Food safety and security
legislations
• Contamination
• Bio-terrorism
• Traceability laws
Need to increase the integrity and
accountability of the supply chain.

12. Traceability in the Dairy Industry
Widely deployed technology is electronic traceability systems such as ERP systems.
Bar-Codes, RFID tags and Computer produced labels are pervasive in the dairy foods
industry.

13. Why Traceability is Important
Improves efficiencies and effectiveness in the supply
chain process.
Easy search and quick access in all systems involved
in the supply chain.
Monitoring of product movement and information
relating to product quality.
For product recall and withdrawal.

14. RFID enabling supply chain of milk
from farm to store
IN THE FARM
 For identification of cows
 Enables automated calf feeding.
 It facilitates the use of automatic drafting
gates in some farms.
 Utilized to monitor the entrance and
departure of a cow from the milking parlor
and to record a cow’s milk production.
IN PRODUCTION PLANT
 Product Identification.
 Product Information and Contents.
 The manufacturer is able to track the
product
through
wireless
radio
communication.
RFID
TAG
TRADITIO
NAL TAG

15. RFID enabling supply chain of milk
from farm to store
IN THE FARM
 For identification of cows
 Enables automated calf feeding.
 It facilitates the use of automatic drafting gates in
some farms.
 Used to monitor a cow’s entrance and departure
from the milking parlor
 Used to record a cow’s milk production
IN PRODUCTION PLANT
 Product Identification.
 Product Information and Contents.
 The manufacturer is able to track the product
through wireless radio communication.

16. Case Study:

17. Valio

A Finnish Producer of Dairy consumers
products

Owned by 18 Finnish milk co-operatives

Number 1 and market leader in Finland and
exporter to over 60 countries.

Some of Valio’s products are Valio Zero
Lactose™ milk powder, spreads, cheese etc.
http://www.valio.com

18. Shipment Process at Valio

Milk is chilled, pasteurized, containerized
and placed on trolleys to fill
orders.(Automated robotics)

Workers remove cart from conveyor line
to staging areas.

Carts are loaded onto trucks.

19. Challenges in supply chain
@Valio

Shipment on to wrong trucks

Shipment at wrong times

Poor visibility of supply chain

20. ‘‘Tag wheel’’ with built-in Passive
UHF tags
http://www.rfidjournal.com/articles/view?11179/

21. RFID Reader Antennas
http://www.rfidjournal.com/articles/view?11179/

22. Tag wheel and antennae in
use
http://www.rfidjournal.com/articles/view?11179/

23. Benefits of RFID Technology
implementation at Valio

End to end visibility

Reduction of Errors in wrong shipments

Software issues instant alerts via
warning lights, text and email in the
event of wrong loading or incorrect
time.

Reduction in the amount of manual
labor.

24. Conclusion




Dairy Industry is has a very complex product line
that is compounded by the products very short life
span.
Retailers & Customers are forcing downward pricing
pressures on industry.
Demand of dairy products is increasing world wide,
necessitating innovation in the supply chain.
Industry is using latest technologies to manage the
supply chain and efficiently monitor products.
http://www.youtube.com/watch?v=tVNq_K6fyi8

25. References(1)








Canadian Dairy Information Center. (2013, 10 10). Canadian Dairy Trade
Balance. Retrieved from Canadian Dairy Information Centre:
http://bit.ly/1c481HO
Economic Research Service. (2005). United States Department of Agriculture.
Retrieved from http://www.ers.usda.gov/Data/InternationalFoodDemand
Faye, B., & Loiseau, G. (2002). Sources of Contamination in Dairy Supply
Chains and Approaches to Quality Control. Food Safety Management in
Developing Countries. Montpellier.
Gerosa, S., & Skoet, J. (2012, 02). Milk availability: trends in production and
demand and medium term outlook. Retrieved from www.fao.org/economic/esa
IFCN Dairy Research Center. (2011, 05). IFCN World Dairy Map 2011. Retrieved
from http://www.ifcndairy.org/: http://bit.ly/1broN3p
List of dairy products. (2014). Retrieved from Wikipedia, the free encyclopedia:
http://bit.ly/1e3oD1U
(2005). Profitable growth and value creation in the dairy industry, A view from
Deloitte and SAP. Deloitte Touche Tohmatsu.
Spiegel, M. v., Fels-Klerx, H. v., & Marvin, H. (2012). Effects of climate change
on food safety hazards in the dairy production chain. Food Research
International, 201-208. Retrieved from www.elsevier.com/locate/foodres

26. References(2)




Business, C. (n.d.). Profitable growth and value creation in the
dairy industry A view from Deloitte and SAP Table of Contents.
Kelepouris, T., Pramatari, K., & Doukidis, G. (2007). RFIDenabled traceability in the food supply chain. Industrial
Management & Data Systems, 107(2), 183–200.
doi:10.1108/02635570710723804
Trevarthen, A., & Michael, K. (2008). The RFID-Enabled Dairy
Farm: Towards Total Farm Management. 2008 7th International
Conference on Mobile Business, 241–250.
doi:10.1109/ICMB.2008.39
Prater, E., Frazier, G. V., & Reyes, P. M. (2005). Future impacts
of RFID on e-supply chains in grocery retailing. Supply Chain
Management: An International Journal, 10(2), 134–142.
doi:10.1108/13598540510589205

27. THANK YOU