LITERATURE REVIEW

Supply chain integration is often described as the seamless flow of products and information from supplier
on to customer. Food supply chains are among the often-quoted examples of reaching this ideal state.
For instance, [13] Hill and Scudder (2002) suggest that food supply chains are in the front line with
respect to supply chain practices, coordination of the chain, and the use of concepts like EDI, VMI, QR
and CPFR. There are numerous papers suggesting the introduction of quick response ([32] Whiteoak,
1999), CPFR ([9] Fliedner, 2003), category management ([14] Hutchins, 1997), and other tools and
concepts to improve the flow of goods and information in the food supply chain. It is evident that the
supply performance of food manufacturers has increased over the last years, largely driven by the
restructuring of the food sector (e.g. [7] Duffy et al., 2003; [12] Hendrickson et al., 2001). The initiatives of
powerful retailers have resulted in reduction in inventories in their distribution centers while maintaining
the same level of customer service. Exchange of information, use of category management, and crossdocking operations are among the most applied practices ([27] Van der Vorst and Beulens, 2002).
However, it seems that the reality for food manufacturers is less fortunate than the rhetoric of many
papers and popular books suggest. For example, [21] Morgan et al. (2007) state that practice of supplier
involvement in category management is low "despite the widespread prescription" (p. 513).
Supply chain integration is defined as the mutual coordination within or across organizational boundaries
([24] Stevens, 1989).
Over the last decade, different instruments and approaches to enhance supply chain integration have
been investigated, mainly looking at the impact of supply chain integration on performance. So far, the
influence of information systems (e.g. [31] Vickery et al., 2003), the influence of operational practices (e.g.
[10] Frohlich and Westbrook, 2001), and the effect of simplifying the materials flow (e.g. [3] Childerhouse
and Towill, 2002) have been investigated. Others stress the development and implementation of specific
tools, such as vendor managed inventory (VMI), collaborative planning, forecasting and replenishment
(CPFR), radio frequency identification (RFID), or bar-coding in a supply chain context. Most of the
published studies fail to address the business conditions or context of a supply chain of perishable
products like fruits and vegetables ([15] Ho et al., 2002). [22]
There are various factors which influence the supply chain of such products such as:

Efficiency in transportation and storage

Various researches and studies have revealed cheaper and efficient ways of shipping perishable products
from the farmer to the customer. Large Retail stores or Mega stores provide perishable products which
are pre-packed and observe a cash-and-carry system. A study was designed to duplicate the practices
exhibited by customers purchasing perishable food products from a cash-and-carry business.
Approximately 40 perishable food items were evaluated. Four types of containers were tested: a Mylar foil
bag, a commercial insulated bag, a generic insulated bag, and a commercial insulated blanket. Mixed
foods were placed in to these containers with or without frozen gel packs, transported in unrefrigerated
vehicles, and monitored for 4h for temperature changes. The purpose of this study was to address the
efficiency of insulated and non-insulated containers with and with out frozen gel packs for keeping
perishable and refrigerated foods with in the safe temperature zone in relationship to duration of transport.
The study was designed to duplicate a real-life situation that occurs at cash-and-carry food
establishments. We attempted to duplicate purchasing practices by selecting typical perishable food
items. The 2009 FDA Food Code (1) stated that food can be held up to 4C has long as the initial
temperature is 5C or less and the food is cooked and served within 4h from the time when it is removed
from temperature control. Similarly, food may be held up to 6C has long as the food had an initial
temperature of 5C or less and the final temperature does not exceed 21.1C (2).
- YANYAN LI, JOHN P. SCHRADE, HAIYAN SU, & JOHN J. SPECCHIO. 2014. Transportation of
Perishable and Refrigerated Foods in Mylar Foil Bags and Insulated Containers: A TimeTemperature Study. Journal of Food Protection, Vol. 77, No. 8, 2014, Pages 13171324.

1. U.S. Food and Drug Administration. 2009. Time as a public health control. Section 3501.19. FDA Food Code. U.S. Food and Drug Administration, College Park, MD.
2. Blackburn, C.W., and P.J. McClure (Ed.). 2002. Food borne pathogens, hazards, risk
analysis and control. Woodhead Publishing, Cambridge.
Another strategy to verify the freshness of exclusive perishable products (Like Alphonso Mango which has
a small shelf life of 20 days if stored in proper condition). A study revealed that a monitoring system can
be applied which would include a plurality of temperature sensors for attachment to a container used in
the transportation of a product (1). The container may be a disposable container, for example made of
cardboard or other recyclable materials. The plurality of temperature sensors can be configured for
wireless transmission of temperature information through at least one node. In addition to temperature
sensors, other sensors may be included as part of the sensor nodes arranged on the container. The
sensors attached to the container may be connected to each other via wired or wireless methods. In
some cases, the sensors may be configured as a mesh network on the container. In certain
implementations, the plurality of temperature sensors transmits the temperature information to a
processor located on or off of the container. The processor can execute instructions of a monitoring
program to construct a spatial model of the temperature of the container. The spatial model can provide a
temperature profile for contents within the container and can be used to generate alerts when
temperatures exceed a threshold.
1. Food & Drug Law Weekly. Jul 31, 2015. Page No. 194. Patents; Researchers Submit Patent
Application, "Monitoring System for Perishable or Temperature Sensitive Product Transportation
and Storage", for Approval.

Inventory & Pricing

Studies suggest that inventory plays a major role for the pricing of perishable products. As the inventory
level changes, prices fluctuate to meet the demand. According to the research thesis on Inventory (1),
various conclusions have been made after thorough research. The thesis enhances our understanding of
pricing and inventory decisions for perishable products and prescribes practical solutions to improve
profitability in manufacturing and merchandising operations involving such products. Spoilage cab be
reduced by using efficient models for inventory replenishment where models have been designed by
researchers to reduce inventory and wastage costs. Substitution (Upward and downward) plays a
significant factor, downward substitution policies are always beneficial with respect to average freshness
of products. Based on our computational study on replenishment policies with a variety of demand types,
patterns, distributions and substitution choices we conclude that NIS (New Items in System) policy out
performs TIS (Total Items in System) policy in most cases. A significant majority of the research on
inventory management or distribution of perishable goods disregards capacity constraints. While
increasing the complexity in the analysis, consideration of limited capacity will lead to more realistic
models. Consequently, more realistic models will enable design of heuristic policies that are possibly
more effective in practice.

Packaging and Contamination

For many food manufacturers the scenery has changed due to trends in markets and changes in
consumer's preferences. As a result, food manufacturers and specifically those that manufacture
consumer products have adapted their product portfolio and production strategy in order to survive. The
market for food products is more and more consumer-driven ([16] Kinsey, 2003), and can be
characterized by an increase in packaging sizes, products, recipes and product introductions ([20]
Meulenberg and Viaene, 1998); higher logistical performance due to restructuring in the supply chain of
retailers (e.g. Wall-Mart); and low margins in retailing and thus downwards pressure on prices for the
manufacturers ([6] Dobson et al., 2001). As a result, food manufacturers face a dilemma, as on the one
hand they have to produce in response to the market, but, on the other hand, they have to produce at the
lowest cost. In other words, flexibility and dependability are needed and on the other hand high utilization.

To complicate supply chain management initiatives further, we need to incorporate a number of food
specific production characteristics. . From previous studies ([28] Van Donk, 2000) we compile the
following enumeration:
- Plant characteristics: Expensive capacity, flow shop oriented design, long (sequence dependent) setups.
- Product characteristics: Variable supply, quality, and price of raw material due to unstable yield; raw
material, semi-manufactured products, and end products are perishable.
- Production process characteristics: Variable yield and processing time; homogeneous products; not
labor intensive except for the packaging phase; production rate determined by capacity; divergent product
structure especially in the packaging stage.
Two types of uncertainty are important for managing the supply chain in the food industry: uncertainty in
demand and uncertainty in manufacturing due to typical food characteristics. Moreover, the tuning of the
processing stage and the packaging stage adds to the complexity of supply chain management for food
manufacturers. Each of the two stages has different characteristics. The processing stage is often flexible
with respect to the type of product (e.g. the recipe processed in a tank), given the availability of raw
materials but inflexible with respect to volume as capacity is limited (e.g. size of a tank). The packaging
stage often is inflexible with respect to type of product as lines are dedicated for one (or a few) type(s) of
packaging (e.g. only liters or half-liters), but volume flexibility is often considerable because labor is
relatively flexible (e.g. adding an extra shift).
Limited shelf life of some (and certainly the main) raw material induces the need for cleaning after a
certain time period but also between different recipes. Contamination of different products is usually seen
as a large problem both from a quality and hygienic perspective. It prevails in all the stages of life cycle
from the production of raw materials, bacteria contact during transportation or improper storage facility to
packaging.

Customer Demand
Managers are continuously looking for the ways of increasing customer satisfaction, improving business
processes, decreasing costs of organization and gaining competitive advantage. One of the challenges
they are facing nowadays is the need to response rapidly to the various and changing demands of
customers. The major driver of survival and competition in this unpredictable environment is agility ([12]
Gunasekaran and Yusuf, 2002). In spite of appearance of technologies, short life span of products and
varying demands of customers, results of empirical studies show that those companies applying the
principles of agility, prosper in a competitive environment of continuous and unpredictable change by
reacting quickly and effectively to changing markets ([11] Gunasekaran, 1999).These aspects include
market, competition, customer requirements, social factors, etc. that have been subject to relentless and
overwhelming changes. Such changes have made ground for some new suggestions about the
emergence of a new business era beyond the traditional systems such as mass production or even lean
production. The prevailing strategy of economy of scales has been challenged by the new vision of
economy of scope. Mass production systems are being seriously questioned for their viability in
challenging the changing nature of the business environment. The new methods that have been used to
cure the problems in productivity of traditional systems, such as flexible manufacturing and lean
manufacturing and all techniques and tools associated to them, are found insufficient in the way they
have been managed and utilized ([36] Sharifi and Zhang, 1999).
Agile production could be defined as the ability to cope with unexpected changes, which in turn survive
organization from critical threats of business environment and to take advantage of changes as
opportunities ([36] Sharifi and Zhang, 1999). Literature shows that numerous investigations have been
conducted in areas, such as principles and concepts of agility, its introduction and implementation ([11]
Gunasekaran, 1999; [10] Goldman et al., 1995; [4] Crocitto and Youssef, 2003; [30] Ramasesh et al.,
2001; [37] Sherehiy et al., 2007).
Since 1999, an attempt has been made to integrate lean and agile production. [24] Naylor et al. (1999)
have studied the application of the two approaches and particularly their integration in supply chain. Also,
[19] Mason-Jones et al. (2000) conducted a research on this subject, emphasizing on the features of lean,

agile, and leagile (integration of leanness and agility) production and decoupling point in supply chain. In
2001, [43] Van der Vorst et al. (2001) conducted a research and obtained positive results from the
application of leagile production in food industries.
Leagility: [24] Nayloret al. (1999) defined leagility as the combination of the lean and agile paradigm within
a total supply chain strategy by positioning the decoupling point so as to best suit the need for responding
to a volatile demand downstream, yet providing level scheduling upstream from the decoupling point ([45]
Van Hoek et al. , 2001).
The lean and agile paradigms, though distinctly different, can be and have been combined within
successfully designed and operated total supply chains ([20] Mason-Jones and Towill, 1999). According to
[24] Naylor et al. (1999), [19] Mason-Jones et al. (2000) and [3] Bruce et al. (2004), leagile supply chain
has relatively both of the advantages of lean and agile supply chains. For instance, while product variety
and profit margin are low in lean and high in agile, they are moderate in leagile.
Considering the characteristics of leagile production, it is expected that the application of such system in
supply chain could lead to a better response to dynamic demands of customers, better utilization of the
principles of leagile production at downstream processes and smooth planning and utilization of lean
advantages at upstream processes.
A central notion in the strategy of leagility is the supply chain decoupling point. [19] Mason-Jones et al.
(2000) stated that processes upstream from this decoupling point should focus on leanness and
processes downstream from the decoupling point should focus on agility (Figure 1 [Figure omitted. See
Article Image.]). Further a leagile production model which includes three strategies of postponement,
mass customization, and modularization.
Statistical analysis and findings of the experiment in an automobile industry GMG imply that for almost all
of the three products, the amount of waste of time as the indicator of leanness (first criterion) and the
duration of product storage as the indicator of agility (second criterion) are reduced by the implementation
of the new model. The amount of impact was not equal for all of the three products.
It is important to note that the new approach might have challenge and limitation in application. Utilization
of the three suggested strategies might not be possible in all organizations towards leagile production and
as it was addressed in the case study, the model should be specialized. Obstacles in organizational
culture and disintegration of leagile production system and organization's wide strategy can be significant
challenges for adoption and application of the new methodology. Control phase is critical element in
assuring continuous and sustainable improvement.
A limitation of this research is that the proposed model was not implemented in a wide range of
operations and did not cover all of the products. Also, it is important to note that due to the lack of
literature on standard criteria for evaluating leagile production, the criterion of the duration of waste was
defined and used for leanness and the duration of final storage was defined and applied to assembly line
based on specific orders from customers, which in turn might be realized as another limitation.
Meanwhile, in comparing the process before and after improvement, there might exist other unknown
factors by which, results would be affected. In other words, only the impact of the known factors was
evaluated.
Considering the findings and research limitations, the following subjects are suggested for further studies:
1. Application of the proposed model in perishable products industries and its - customization with
respect to their particular characteristics.
2. Comparison of the proposed model and other models of agility and leanness.
3. Evaluation of the effects of the proposed model on other functional areas/performance criteria of
the organization under study.

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