Simple Steps to Reduce Perishable Shrink

by Andrew Hoeft | Jul 12, 2016 12:00:00 AM

For retailers, shrink caused by perishable items amount to a lot of money.

Items such as meat, dairy, fruit, vegetables and flowers expire prematurely when temperatures are handled incorrectly. The final quality of the product is determined at the distribution centers and during the transportation.

Consumers are looking at the appearance of products and will remember quality issues. To ensure that the consumers are purchasing products at their highest possible quality, here are simple steps that can be applied today to greatly impact the reduction of shrink while also positively increasing quality for your products.

Step 1-The FEFO Concept

Gary Nowacki, CEO of TraceGains, Longmont, CO, says, “There are technology solutions available to overcoming the high cost of perishable shrink and they must prioritize inventory and shipments based on FEFO: First Expired, First Out.”

The FEFO concept is based on the following core ideas:

  • Temperature control must be monitored
  • Temperature varies greatly inside a storage room, container or truck
  • Even slight temperature variation affects the remaining shelf life of produce and temperature exposure has a cumulative effect
  • Identifying the temperature exposure of individual pallets or cases of produce allows prioritization on the basis of remaining shelf life, instead of simple transit and storage times.

Step 2-Determine Temperatures

To determine how different temperatures cumulatively affect the remaining life of the product one must:

  • Measure the exact temperature accumulations in small granularity within each area of the truck or storage facility in conjunction with shelf-life modeling
  • Check that solutions automatically calculate expiration dates of perishables when received at the dock
  • Check the document trip-level temperature data at item, carton or pallet for a more successful conflict and dispute resolution.

Step 3- Focus on Process

Processes are organized, purposeful and structured so that they may consists of interrelated and interdependent pieces–products and service for example. These elements continually influence one another (directly or indirectly) to maintain their activity and the existence of the process, in order to achieve the goal of the supermarket.

All processes have inputs,  outputs and feedback mechanisms, that maintain an internal steady state–homeostasis. Despite a changing external environment, the internal state will display properties that are different than the whole but are not possessed by any of the individual elements, and have boundaries that are usually defined by the process observer–management.

Processes underlie every phenomenon and all are part of a larger system. Process stops functioning when a piece is removed or changed significantly. Together, they allow understanding and interpretation of the supermarket as a whole system of interlinked wholes, and organize our thoughts about the product, service, and people.

Step 4-Full-Chain Tractability Applications

It is going to take more than cold chain and storage solution to ensure the freshness of cold perishable food items. A temperature tractability application is needed for all temperature-sensitive products while also being able to determine the remaining shelf-life upon product arrival.

Two features to consider:

  • Reliable “credit card”-sized temperature tags that can easily attach to containers utilizing wireless RFID technology
  • Battery-powered tags

Nowacki also urges that “when collecting these data it is essential that companies can seamlessly integrate into proven full-chain tractability applications for alerting, analysis, and reporting—helping companies pinpoint profit opportunities.”

All things considered, these four simple steps to help reduce the percentage of shrink caused by perishable foods can greatly reduce the hit on profit. Utilizing FEFO, determining temperatures, putting processes in place, and implementing applications with tractability are just a few things that the food retail industry as begun to recognize as impactful practices that are reducing shrink.

The Product Expiration Blind Spot

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