Originally printed in the January 2018 issue of Produce Business.
Modern Tech Will Track All the Way from Seeds to Stores
Software is advancing to the point where retailers will be able to use a smartphone to learn everything about produce from the time the seed is put in the ground until the crop is harvested and trucked to the shipper and on to the distribution center and then displayed for the consumers.
The revolution in produce software began with food safety and the need during a food scare to quickly identify the suspect fields, trucks, packinghouses and distribution centers.
“In the unfortunate event of a product recall, these solutions can quickly identify the supply-chain path taken by the recalled product or product component by identifying backward-chaining sources and forward-chaining recipients in order to prohibit a product from possible consumer sale,” says Randall K. Fields, chairman and chief executive of Park City Group, Park City, UT, which offers technical services and education for retailers, suppliers and brokers in the produce industry.
Food safety started this revolution, but next-generation technology will let retailers manage their inventory while it is still growing in the field.
“We’re seeing retailers pull down their stock from the distribution center, and then they can send out information about how much lettuce or tomatoes to harvest,” says Richard Jones, chief technical officer at Linkfresh, Cambridge, England.
Linkfresh has developed enterprise resource development software for the food industry that is used around the world.
“Software is changing the world and every industry in it,” says Tina Reminger, vice president and general manager at Silver Creek Software, Boise, ID. “It’s very exciting to be a part of the force bringing about that change. Produce in particular is exciting because there are so many improvements to be made.”
Silver Creek Software is a 35-year-old company specializing in customized financial management programs for growers, packers, shippers, wholesalers, brokers and distributors in the produce industry.
Inventory Control in Real Time
One tremendous change on the horizon will be a superior ability to stay on top of produce inventory, including highly perishable items that are not forgiving when mistakes in calculation are made.
“Silver Creek Software’s Visual Produce keeps track of your inventory on hand and has the ability to alert you based on this information,” says Reminger. “Silver Creek Software’s Visual Produce takes a lot of the headache out of manually managing your inventory. It keeps track of everything for you but also gives you full control when items are returned or spoiled.”
Some programs even automate the process of monitoring produce inventory and submitting orders when the amount on hand reaches a prescribed level.
“The functionality exists today within dProduce Man Software where the user indicates the minimum quantities of various items that are needed to be on hand,” says Charles Shafae, president of dProduceman Software, Half Moon Bay, CA. “When on-hand quantity falls below the indicated minimum, a purchase order is automatically created to be placed with the default supplier. The issue with produce items is the default supplier may not have that item because of seasonality, or the user can find a better price from a different broker/shipper.”
DProduceman offers client training and consulting, and custom-built accounting and management software programs.
With the increased use of smartphones and tablets at the farms, retailers can even add the inventory still in the ground to what is already at the store and distribution center.
“There is a growing number of technology vendors working to offer retailers and their suppliers solutions that accurately track and trace products from dirt to shelf,” says Park City Group’s Fields.
Advanced software is already available to help retailers predict how much of a particular produce item they will need at a specified time in the future.
“The latest tools that help optimize inventory positions are using forecasting and/or artificial intelligence,” says Fields. “These solutions have improved greatly at predicting consumer demand, so companies can order appropriately to ensure the right product is available in the produce section when wanted, while minimizing waste.”
Tracking and inventory management software will play an even more vital role as internet produce sales grow.
“There is a tremendous focus on providing customers a simple way to order, track and pay for produce,” says Reminger. “Silver Creek Software has and will continue to develop its e-commerce web platform and mobile applications. There has also been a focus on analytics and machine-learning to help users make business decisions. At the end of the day, Silver Creek Software is committed to using whatever technology is available to make everyone in the produce industry more profitable, safe and informed.”
There are even technologies that could let retailers track their produce all the way to the consumer’s front door as home delivery, perhaps by drone, becomes more prominent.
“There are several new and existing technologies that will affect the distribution of produce as well as other items in the near future,” says Shafae. “Among them is the RFID (Radio Frequency Identification tag) that has been in use, but will be utilized in a more disruptive influence. The use of drones, automated warehouse and driverless trucks are the next step in developing a method for a short delivery time.”
In a brave new produce world, the retail store could become something of an afterthought as drones deliver fruits and vegetables, and consumers and sellers alike will pull out their smartphones to get a closer look at the goods.
“We already know drones can deliver small packages,” says Shafae. “The difficulty is designing a system that makes commercial sense. Drone application could be used delivering small packages (what is called “shorts”) for foodservice or restaurant deliveries. It will be fast and economical. But before that happens, we need regulations in place for these unmanned aerial vehicles.”
Too Much Knowledge?
The technology exists for all parties — from the growers to the retailers and everyone in between — to share information on produce from the seed in the field to the shopping basket as it leaves the store.
The power of this information tool begins with a dynamic form of inventory management that was unthinkable 10 years ago.
“They know what’s coming,” says Udi Sosnik, owner of Orange Enterprises, Inc., a software solutions company in Fresno, CA. “We have a very sophisticated way growers, shippers and packers use to see in real time what’s coming from the fields in different locations. They have the knowledge in real time of what’s coming from the field, which they didn’t have before.”
“The farmer can use his tablet to record what pesticides are being used and the spray regime. Now you can get all this information from your distributor, but in the future you will be able to go back live and capture it.”
— Richard Jones, Linkfresh
In England, tracking software lets retailers know when imported produce is coming off the boats and where it is being transported after it leaves the docks.
“We’re an island and we get a lot of our produce coming off ships,” says Jones. “We’re seeing the use of this technology increase gradually. We’re seeing people track when the ships come in, and where the produce is sent after it is unloaded.”
Field-level inventory tracking is already helpful for letting growers know how much they are going to harvest above and beyond what is already under contract.
“Say you’re selling 10,000 trays of grapes to Costco, and you have 12,000 in the field,” says Sosnik. “You know in advance that you should sell 2,000 trays, or send them to the cooler.”
As customers demand to know more about how their food is grown, retailers theoretically could monitor the process in the field in real time.
“We’re following our supply out to the farmers’ fields,” says Linkfresh’s Jones. “Traditionally you could trace it to the back house; now you can capture information as the crop is picked. It’s about putting out all the details about the produce where it is in the ground. The farmer can use his tablet to record what pesticides are being used and the spray regime. Now you can get all this information from your distributor, but in the future you will be able to go back live and capture it.”
In order for inventory tracking and quality control to reach its full potential, everyone in the supply chain has to be on the same page when it comes to using the software that holds information in a format that can be universally accessed.
“There are several disconnects between the supplier and the store, not the least of which are in the areas of demand forecasting and item-level planning,” says Park City Group’s Fields. “We need to give credit to retailers that are at least trying to get closer to some of their customers, even if they’re not always successful. The worst thing a retailer can do is sit back, buy on the deal and expect the stores to sell everything.”
There is potential for sharing a wealth of information, but growers may not want to let retailers know everything.
“We have a lot of growers using the software,” says Sosnik. “We’ve been using it for many years, but the question is who you want to share the information with.”
There might be the case, for example, of grape growers who would rather not explain to uninformed retailers or consumers why they often applied sulfur to suppress powdery mildew in rainy years.
Even under more common circumstances, many shippers would rather be tight-lipped about how much produce they have on hand when bargaining over the price for a product that was not grown under contract.
“The shippers might be sharing some of the data on the phone,” says Sosnik. “Because of the pricing structure, they might not want to share all the information. The issue of data dissemination is up to the owner of the data.”
The largest retailers already have flexed their muscles to leave grower/shippers little choice but to share information relevant to food-safety recalls, like where and when a case was picked.
“The major retailers like Walmart can say if you want to do business with us, you’ve got to have this,” says Jones.
It remains to be seen, however, how much information will be shared in real time on how the crop was grown or on how much is in the field, which could be important for inventory management.
“Sharing the information depends on the distributor, “because some want more visibility and others don’t,” says James Ecker, owner of Computer Network Solutions, Rio Rico, AZ.
How Do I Start?
There are programs that let grower/shippers store a wealth of information and share it with parties farther down the line, with a minimal investment.
“The cloud seems to be the more economical way,” says Ecker. “You have Microsoft, Amazon and Go Daddy offering cloud-based programs. A lot of the programs let you share the information through a web portal. In the Enterprise Resource Planning systems, the distributors seem to be working with all the information in the cloud, which allows growers and retailers to access it through the cloud.”
Some systems even let smaller producers bring down the cost by sharing access to the software.
“We have some models that farmers can share to bring down the cost,” says Jones. “All you need is a web browser like Google Chrome and access to the internet, and you can get the information.”
Even programs that store the information in the cloud, however, require investment in a higher speed internet connection.
“The cloud-based programs require a faster internet and that can be expensive; it can be a little pricey in some areas,” says Ecker. “The cloud-based solutions also typically require higher bandwidth. The in-house programs take dedicated equipment and usually a third-party program to let you communicate. Some people ask, ‘how can I get the lowest cost?’ Others say it’s just the cost of doing business.”
For growers, shippers, and retailers, calculating how much you could save down the road is part of the process of deciding how much to invest in a system.
“Time and money are the main impediments to adoption of this technology,” says Silver Creek Software’s Reminger. “The technology is certainly there, but development can be expensive, as most businesses are very unique in the produce sales arena. Without guaranteed sales, it can be risky to fund a project, but it’s worth it if you want to be in the 21st Century and operate a business.”
For any of the parties, from grower to consumer, an important part of what you are buying in a software package is supported in learning how to use it.
“The technology itself can be a barrier, mostly because some of the solutions are too hard to use and others simply don’t provide the decision support business users need, but both issues point the finger back to the real culprit – the organization,” says Park City Group’s Fields.
“Marketing and merchandising groups have been in a turf war for years. While many chief executives have tried to temper this battle — some even combining the two departments — it still is an issue. Any new technology needs to help these two groups collaborate so companies can get the benefits from go-forward strategies,” adds Fields.