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FEFO revolutionises refrigerated food logistics

Putting RFID temperature data loggers to work brings big profits.

It is estimated by industry experts that 30% of perishable food crops are lost in transit, costing billions of dollars in profits and putting additional pressure on already high food costs. With biofuels diverting crops formerly grown for food, such unnecessary losses are now driving the problem into the realm of national security.

According to Forbes magazine in 2007, global waste from perishable goods in the supply chain amounts to US$35 billion annually. Lost customer confidence, bad publicity and tarnished brands are other consequences of cold chain breaks that producers, wholesalers, and franchise owners can ill afford in today’s competitive marketplace.

According to a study conducted by Sensitech Inc., Beverly, MA, reported in May 2006 by PlanetRetail, of the observed occasions where a product exceeded temperature specifications, 30% occurred between the supplier and the distribution centre. Another 15% of violations took place between the distribution centre and the store. In situations where the product temperature fell below specification, 19% of incidents occurred between the supplier and distribution centre and 36% between distribution centre and the store.

First to expire first out

Monitoring cold storage shipments is critical for a company’s bottom line, according to a presentation at the Thaifex Conference entitled “Keeping The Food Supply Safe and Profits Fresh” in 2008. From a detailed study by the University of Florida’s Food Distribution and Retailing Lab of strawberry shipments in the US in 2007, a new concept in inventory management of refrigerated goods emerged — FEFO, which stands for ‘First to Expire First Out’, as opposed to traditional FIFO (First In First Out) inventory management. The FEFO concept is based on the following premises:

  • Temperature control must be monitored;
  • Temperature varies greatly inside a storage room or reefer container or truck;
  • Even a few degrees of temperature variation affects the remaining shelf life of produce, and temperature exposure has a cumulative effect;
  • By identifying temperature exposure of individual pallets or cases, inventory management can be prioritised on the basis of remaining shelf life rather than simple transit and storage times.

There are two factors to building an effective FEFO system — the exact temperature accumulations in small granularity within each area of the truck or storage facility and a so-called shelf-life modelling, which determines how different temperatures cumulatively affect the remaining life of the product.

Experts at the University of Florida used inexpensive radio frequency identification (RFID) temperature data loggers, available from Information Mediary Corporation, on at least one per pallet throughout and remained with the produce from the processing facility to delivery to the local distribution centre.

As a result, rather than shipping just any incoming pallet of produce to just any outgoing distribution centre, inventory could be prioritised based on the estimated remaining shelf life. Some product may be rejected completely if it were known that it would arrive spoiled, even if it looked fine prior to shipping.

RFID Data Loggers can capture thousands of readings and store the temperature history in memory. At six grams, they are waterproof, food-safe, and cost less than $1 per trip over their six-month useful life. Log-ic Loggers are approved for vaccine and food shipments by World Health Organization (WHO), United Nations Children’s Fund (UNICEF) and US Department of Agriculture (USDA). They require no cable or adaptor and need not be removed from the packaging to capture their data. The data can be read as often as desired en route.

In a real-life example of a trailer load of straw-berries, it was found that by using RFID Temperature Loggers to predict shelf life and prioritising distribution based on the FEFO model:

  • 2 pallets never left origin,
  • 2 pallets were rejected at arrival,
  • 5 pallets were sent immediately to stores,
  • 8 pallets were sent to nearby stores, and
  • 7 pallets received no special attention.

This turned a loss-making load into a profit of a total return of US$15,379, as compared to handling the load using the traditional FIFO method.

The cost of data loggers

According to Information Mediary Corporation, the cost of monitoring is under $1 per trip for its Log-ic Logger product. It can be used repeatedly over a six-month period. The return on investment on RFID Cold Chain Data Loggers works out to $600 for every $1 invested.

In summary, the benefits of using RFID Temperature Monitors were identified as:

  • Liability issue resolution;
  • Verification if products are within the temperature range and safe for consumers;
  • Waste reduction;
  • Usefullness if shipments arrive late;
  • Better, more consistent quality of product in the store;
  • Detection of weaknesses in the distribution network; and
  • Increase of sales and profits.

It is important to use high-quality data loggers, and the de facto international standard to which loggers should be certified is the European EN12830 Device Standard. Such loggers guarantee an accuracy of better than +/-0.5ºC, keep accurate time and respond quickly to temperature changes. When shipping food to the US, it is important to use a USDA-approved device.

The financial benefits proven in the University of Florida study have been so convincing that many retailers and distributors are now beginning to develop FEFO based inventory control. Further pressure comes from regulatory agencies that are increasingly concerned about food safety and costs. Mandated food safety tracking and tracing programs, including possible temperature monitoring requirements, are well under way in the US, Australia, China and Europe.

“It’s no longer a matter of being able to afford to deploy RFID Data Loggers to monitor perishable shipments, but rather it’s a matter of being foolhardy not to,” according to one industry insider in the audience at this year’s Thaifex Coldchain Seminar.

Are inexpensive loggers accurate?

A lot of devices definitely are not, especially if a device manufacturer has not obtained the stringent EN12830 certification. Log-ic is known to be the most accurate low-cost device on the market, having been certified by a prestigious French Laboratory Cemafroid to be within +/-0.2ºC. It is therefore fast becoming the device of choice for logistics operations.

Many data logger manufacturers make claims that each logger is ‘calibrated’. This may be true for all data loggers using so-called thermistors (chip-based sensors). This is because each thermistor is already laser-trimmed and measured to three-point accuracy at the semiconductor factory. However, the three-point device calibration performed by a measurement laboratory would cost at least $75 per logger. Thus, it is neither affordable nor required for each and every device.

Laboratory certification is done to verify the quality assurance process based on a few random samples about every six months. In fact, the word ‘calibrated’ is thrown about liberally by data logger suppliers to confuse buyers into thinking that each device really underwent laboratory standard calibration. In reality, a small production sample of the device is merely tested to be accurate within the claimed specification.

Device testing can be performed under two conditions: 100% of devices or a percentage of devices. If a percentage of devices is being tested, there must be a validated, documented procedure in place assuring that all devices within a production lot will perform as well as the randomly chosen test sample. Some companies may use a confidence interval of 95% (i.e. 95% of the lot will perform to the promised standard), whereas some will guarantee a confidence interval of 99% or better. Log-ic Loggers are 100% tested and certified for accuracy.

Information Mediary Corporation has succeeded in designing and building devices that would always meet their specified accuracy levels and never go out of calibration. In the case of the company’s Log-ic Logger device, it is not even possible to feed calibration data to the tag. During Quality Assurance (QA), each and every logger is turned on for 48 hours to check timing accuracy (it must be better than two minutes per month), and temperature (must be better than 0.5ºC). A proprietary, patent-pending measuring algorithm assures that less than 0.5% of all tags produced that fail to meet the specified accuracy during final QA are discarded.

Log-ic Loggers are guaranteed to hold their accuracy levels for the life of the device. Re-testing and re-certifying Log-ic Loggers is possible (usually required by Good Manufacturing Practices or GMP standards to be done every six months). However, this is not cost effective. Because of the low cost of the Log-ic Logger, it is cheaper and simpler to purchase new ones after six months.

Michael Petersen is the global managing director for Information Mediary Corporation.

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