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Centre for Operational Excellence (COPE)

Faculty of Economics and Business
Centre for Operational Excellence (COPE)ProjectsDistribution of fresh food

Distribution of fresh food

Their fresh produce assortment is one of the most important aspects which supermarket chains can distinguish themselves with. The quality of this increasingly significant product category is mainly associated with the speed with which the products end up on the fresh produce shelves. COPE's research focuses on possibilities to improve both the sustainability and the processing times in fresh produce logistics.

Research helps make the distribution of fresh food both more rapid and more efficient.

Most large supermarket chains, including Albert Heijn, have one or more national distribution centres (DCs) for fresh food products at their disposal, including dairy products, meat, fish, vegetables and fruit. Every day, these fresh distribution centres supply the right amount of items to the regional distribution centres (RDCs), where they are combined with the groceries there and transported to the shops. This is a transhipment process called crossdocking, which requires short lead times. The sooner the fresh food products are on the shelves, the higher the quality consumers can enjoy and the lower the possibility of losses due to waste and rot.

COPE research has shown that the crossdock process can be executed more efficiently and rapidly. By clustering the fresh food products per individual shop in the national fresh distribution centres, sorting them there and loading them in the right order based on the outgoing journeys from the RDC, the average time during which a roll container has to be kept in the RDCs can be shortened by twenty minutes. Besides that, this research showed even more possibilities to improve fresh produce logistics and make them more sustainable, including by way of involving the suppliers of the fresh food products in the optimisation process. This is sufficient reason for conducting more extensive and thorough research.

Internal versus external logistics

The research project Sustainable Logistics in Fresh Food (SLIFF) has been set up for the purpose of making fresh produce logistics more sustainable by making better use of the available logistic capacity while lead times continue to decrease. In addition to the University of Groningen, Erasmus University Rotterdam is taking part in this research, which started early 2015 and has a four-year duration. The Dutch Organisation for Scientific Research NWO is financing it for a significant part in the framework of its research programme Sustainable Logistics.

This research project focuses on two challenges:

1. Distribution network optimisation versus internal logistics optimisation.
This is a continuation of the earlier research study which focused on the question what impact the way in which the national fresh distribution centres delivered products had on efficiency and lead times in the regional centres. Research topics include the best possible sequence of lorry-loading in the national fresh distribution centres and allocating lorries to the RDC docks. Besides that, research will be conducted into how crossdock and order-pick processes within the RDCs can be harmonised for the purpose of clustering both flows.

2. Stock optimisation versus transport optimisation.
This challenge concerns the national fresh distribution centres, which are supplied by the suppliers of fresh food products. The basic proposition is vendor managed inventory, which means that the suppliers themselves are responsible for a sufficient stock level in the fresh distribution centres. By clustering their shipments, suppliers will be able to increase their delivery frequency and keep stock levels in the fresh distribution centres low. In addition to sharing transport capacity, these suppliers could make a next step by sharing storage capacity, which will improve the use of fresh distribution centres and the efficiency of their processes.

Substudy: increasing cross-docking speed by twenty minutes

On 18 September 2014, Paul Buijs obtained his doctorate with a thesis on sustainable distribution logistics, in particular, on the possibilities to improve crossdock processes by attuning planning decisions made by various actors in the distribution chain. Part of the research study focused on the distribution of fresh food products by the large Dutch supermarket chain, Albert Heijn. 'A concrete outcome of the study was that crossdock process efficiency is related to the dock planning made by Albert Heijn's RDCs. For instance, the question which docks should be allocated to lorries with fresh food products has an immediate effect on the distance in the RDCs which forklift drivers will have to cover transporting these products', Mr Buijs stated.

The loading sequence of the fresh food products also impacts efficiency in the RDCs. It would make a huge difference if the national fresh distribution centres put the products which the RDCs need first nearest to the door of the loading platform, so they can be unloaded first. 'Part of the outcomes of the study has been incorporated in the agreements made by Albert Heijn with Norbert Dentressangle, the logistics service provider who operates the new Shared Fresh Center in Nieuwegein. The aim is to cluster the food products in this Shared Fresh Center in advance in future and to load them in the order that is attuned to the planned departure times in the RDCs. This will bring about considerable improvements at chain level, among other things because the average time during which each container is kept in the RDCs could drop by twenty minutes', said Mr Buijs, who will continue to be involved in the research project into fresh produce logistics as a postdoctoral researcher.

Alignment of complex decision-making

This project requires research into three areas. Firstly, elaborate attention will be paid to designing organisational structures. Not only retailers and fresh food suppliers will be included in this study, logistics service providers who operate the national fresh distribution centres as well as the logistics service providers who take care of the logistics of the fresh food suppliers will also play a role. What organisational structures are required to align the complex decision-making processes of these actors? In what way can costs and benefits be distributed among the various actors?

Another major part of the project is related to operations research: what exactly should the optimisation models look like? What algorithms are required to calculate the effects of optimum decisions? How can these algorithms be converted into tools suitable for use?

The third part is about how the various IT systems will have to fit well with each other. After all, the various actors will have to bring their decision-making into line with each other and, thus, share information. How is this to be organised?

The research team comprises two PhD students and one postdoctoral researcher. Research partner Albert Heijn will provide the required cases. In addition to gaining greater insight into fresh produce logistics and developing mathematical models for the purpose of optimising them, this research aims to find concrete solutions for Albert Heijn, including for the new Shared Fresh Center in Nieuwegein.

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