An estimated 11 million farms in the EU produce agricultural products that are processed by around 300 000 companies. These processing enterprises in turn sell their products to 2.8 million food distributors and providers, which then make this food available to the EU’s 500 million consumers. For this food supply chain to run smoothly and products to reach consumers in good condition and on time, efficient inventory and transport management is needed.
Simulation model for better decision-making
With economically efficient supply chains as a goal, the EU-funded Diverfarming project has developed a mathematical model that simulates a national distribution network of frozen food products from diversified cropping systems. The research team’s purpose was to determine the impact of different inventory management policies and transport capacity systems on costs and customer service. The simulation model is described in a paper published in the ‘International Journal of Simulation Modelling’. Integrating transport resources and inventory management, the model facilitates decision-making when planning distribution capacities. It analyses the relevant supply chain’s performance in different scenarios in which certain parameters vary: the time it takes to make lorries available, the time it takes to obtain the lorries, the reorder point and the desired inventory state. “The results provide the best decision alternative in terms of costs and inventory levels by considering the transport capacity life cycle, the time to acquire additional transport capacity, the reorder point in days of stock and the target inventory,” the study states. The system dynamics simulation model could also be adapted to other food supply chains with different distribution centres and requiring inventory policy and transport capacity management.
Sustainable next-gen supply chains
The technological advances ushered in by the fourth industrial revolution, or Industry 4.0 could interfere with the sustainability of current industrial systems. Management practices are therefore needed for supply chain systems that exploit these advances, while also taking into account aspects of economic, social and environmental sustainability to counteract the negative impact of Industry 4.0. With this in mind, the Diverfarming research team has conducted a literature review of current research on supply chains 4.0 (supply chains that use Industry 4.0 technologies). Published in the journal ‘Sustainability’, it reviews 54 articles on supply chains and classifies them in terms of economic, social and environmental sustainability. The results show that more attention has been paid to economic and environmental aspects than to the social aspect in the relevant research on next-generation supply chains. The goal of the Diverfarming (Crop diversification and low-input farming across Europe: from practitioners engagement and ecosystems services to increased revenues and chain organisation) project is to increase diversification and biodiversity in Europe and promote the bioeconomy’s sustainable development. The project ends in April 2022. For more information, please see: Diverfarming project website
Diverfarming, supply chain, simulation model, inventory, transport