ID Tags: A Fresh Perspective on Tracking Supermarket Produce

Does an electronic tag costing just 10 centimes of a euro ($0.14) hold the key to developing the more sustainable supply chains we will need in the future?

Radio Frequency Identification (RFID) tags have failed to achieve the widespread adoption that many were forecasting almost a decade ago. But a two-year pilot project in the Netherlands using RFID tags to track the flow of fresh vegetables from farm to supermarket has shown fascinating cost and environmental benefits.

Creating an efficient supply chain to stock supermarkets with fresh produce matters more than you might imagine. Fresh fruit and vegetables sourced from a variety of countries are a staple of our diets. Because they decay fast, we buy them every few days.

They arrive at big retailers by the tonne and are often displayed at the entrance to the store. So ensuring they are at the peak of freshness is critical to retailers, consumers and the environment alike: a wilted lettuce or brown bananas thrown away are a waste of human effort and money. In environmental terms, they represent carbon needlessly produced.

Getting the right amount of fruit and vegetables to the store, in perfect condition, with a minimum of carbon released during transport, is the ultimate low-carbon supply chain challenge, with lessons for distribution of other goods.

Tomorrow’s supply chains are likely to look increasingly different from those we use today. A report from the Global Commerce Initiative, a manufacturer-retailer alliance to promote better supply chains, warns that many changes are on the way.

The study, 2018 Future Value Chain, highlights consumer trends and pressure to reduce carbon footprints as two of the biggest drivers of change. In emerging countries, consumers are still discovering supermarket shopping. In developing countries, home delivery is on the rise, and everywhere, online shopping attracts new customers. That is changing distribution demands, at a time when retailers and manufacturers are seeking to cut their carbon footprints and their costs.

One way to solve this conundrum, the report concludes, is a shift to shared supply chains. Shared logistics could improve efficiency of transport, and reduce the number of half-empty trucks and vans congesting cities. But goods travelling in shared loads need to be instantly distinguishable and traceable. RFID tags can provide the information that would enable delivery driver, distributor and retailer to track the goods and ensure the right product reaches the right customer, and minimise the carbon footprint.

So what are the lessons from the use of RFID tags to track the humble lettuce? The Vers Schakel project was a collaboration between seven interested parties, embracing a supermarket, its suppliers, and technology specialists and the Wageningen University .

Its mission was to discover whether there were benefits from putting lettuces into RFID-tagged crates at the packing shed, and tracking them through the supply chain until the contents were sold and the crates returned. It sounds simple, but unlikely problems had to be overcome. Finding a glue to stop the tags falling off the crates proved difficult, and iron ions in some green vegetables made first-generation tags unreadable.

But Ard Jan Vethman, global RFID leader at Capgemini, one of the participants, says that knowledge of where each crate was all the time yielded clear benefits. In-store quality improved, because the system could send automatic text or e-mail alerts if a crate was left out of the fridge too long.

The quantity of vegetables thrown away was reduced, because staff could easily get them from the retailer’s fridge in date order, but also because everyone knew how much stock was in the supply chain, and where. Improved information “enabled the retailer to ensure nothing went out-of-date”, Mr Vethman says. The producer got a surprise bonus: fewer rush orders meant less overtime paid. Across the system, the investment pay-back proved to be 2.7 years.

The cost and environmental benefits were clear. But to reap them, information had to be shared. “One of the biggest challenges of RFID systems,” says Mr Vethman, “is that they require close co-operation and agreements between partners along the entire supply chain”. That, rather than the 10 centimes a tag, may prove the bigger barrier to greener products.

Source: Financial Times