Advanced Planning in Fresh Food Industries

Foreword


During the last three decades trade, industry and also academia became heavily
involved in the development primarily intended towards more effective planning
and control of logistical operations in supply chains. Lately, these approaches began
to be directed towards fresh food supply chains. Competitive fresh food supply
chains require that the aspects costs, quality, food safety and technology be
taken into account simultaneously in a multidisciplinary way. In recent years the
issue of food safety got large emphasis in government, industry and society (consumers).
The introduction of the General Food Law by the EU from January 2005
on even put more emphasis on the issue of food safety.
It turns out that Advanced Planning and Scheduling Systems (APS) can play an
important and integrative role in supporting decision making activities in fresh
food supply chains by considering shelf life as an instrument to generate more
added value and food safety. Basically the work of Matthias L黷ke Entrup is concentrated
on two research questions:
􀁸 Which requirements must APS systems cover in order to efficiently
and effectively support production planning in fresh food industries?
􀁸 How can shelf life be integrated into production planning? How can
production planning contribute to optimizing shelf life output?
In his study the author shows how these questions should be answered adequately.
His results and conclusions are of paramount importance for integrating
the issue of shelf life into production planning.
The study provides a wealth of insights and results which are significant both
from a practical as well as from an academic point of view. The research starts
with an overview of current APS systems and highlights the need of a new generation
of planning software which aims at supporting decision making in supply
chain management. Although APS gain increasing acceptance in industry, a number
of issues remain, in particular at the detailed planning and scheduling level,
which are not satisfactorily covered by the decision models to be found in the
standard APS software packages. This is truly the case for the fresh food industries.
Undoubtedly, the most important planning issue regarding fresh food lies in
the consideration of shelf-life. So far, vendors of APS systems have taken many
efforts to consider shelf-life issues in their planning systems, however, without
covering all of the characteristics being important in Fresh Food Supply Chains
(FFSCs) and fresh food production systems. One of the main contributions of the
study by Matthias L黷ke Entrup is a comprehensive analysis of the planning requirements
of fresh food industries on one hand and the decision support offered
VI Foreword
by typical APS systems on the other. Software packages from leading players in
the market are assessed looking at the scope of shelf life integration and its capabilities
to generate plans that optimize shelf life output.
Based on the shortcomings of current APS systems, new quantitative planning
models are developed and resolved. These models consider shelf life planning
problems in specific fresh food industries (yogurt production, sausage production
and poultry processing). The models are based on the general block planning principle
and are adapted to the needs of the specific fresh food planning applications.
Considerable care has been taken to obtain compact model formulations which
can be solved very efficiently by use of standard optimization software. Numerical
experiments demonstrate the applicability of the planning models in realistic industrial
settings.
As a result, the author makes clear that suppliers of APS software are currently
unable to offer APS systems in which the integration of shelf life into production
planning has been dealt with adequately. Specifically, product freshness has been
modeled by the author as part of the optimization and not as a constraint within
the planning function. This is indeed a new and creative contribution of Matthias
L黷ke Entrup to solving complex planning problems of considerable practical
relevance. The applications (case studies) have been selected carefully by the author
in such a way that many other application fields in fresh food industries could
benefit from his results.
Prof. Dr. Paul van Beek
Prof. Dr. Hans-Otto G黱ther

Table of Contents


Foreword.................................................................................. V
Acknowledgement ............................................................................................. VII
Abbreviations.........................................................................................XIII
1 Introduction .......................................................................................... 1
1.1 Introduction to the Field of Research .......................................................... 1
1.2 Research Objectives ..................................................................... 2
1.3 Dissertation Outline........................................................................ 3
1.4 Conclusion....................................................................................... 4
2 Advanced Planning and Scheduling Systems................................................... 5
2.1 Evolutionary Path of APS Systems ............................................................. 5
2.1.1 MRP I and MRP II ............................................................................... 5
2.1.2 Assessment of the MRP Planning Concepts ........................................ 8
2.1.3 Emergence of APS Systems................................................................. 9
2.2 Structure of APS Systems.................................................................. 12
2.2.1 Overview................................................................................... 12
2.2.2 Strategic Network Design .................................................................. 14
2.2.3 Demand Planning............................................................................... 15
2.2.4 Supply Network Planning .................................................................. 17
2.2.5 Production Planning........................................................................... 18
2.2.6 Production Scheduling ....................................................................... 19
2.2.7 Distribution Planning ......................................................................... 20
2.2.8 Transport Planning ............................................................................. 21
2.2.9 Available-to-Promise ......................................................................... 21
2.3 APS Systems Market Overview ................................................................ 23
2.3.1 Available Market Studies................................................................... 23
2.3.2 Market Size and Segments ................................................................. 24
2.3.3 Major Providers.................................................................................. 25
2.3.4 Expectations for the Future ................................................................ 27
2.4 Implementation of APS Systems ............................................................... 27
2.4.1 Implementation Process Overview..................................................... 27
2.4.2 Project Definition ............................................................................... 28
2.4.3 Vendor Selection................................................................................ 30
2.4.4 Implementation ......................................................................... 31
X Table of Contents
2.4.5 Implementation Risks ........................................................................ 32
2.5 Assessment of APS Implementations........................................................ 33
2.5.1 Benefits ................................................................................ 33
2.5.2 Development Needs ........................................................................... 34
2.6 Conclusion.............................................................................. 35
3 Fresh Food Industries ........................................................................ 37
3.1 Introduction .................................................................................. 37
3.2 Definition and Segments ................................................................... 37
3.3 Characteristics of Fresh Food Supply Chains............................................ 38
3.3.1 Structures of Fresh Food Supply Chains............................................ 38
3.3.2 Economic Characteristics and Developments .................................... 41
3.3.3 Technological Characteristics and Developments............................. 47
3.3.4 Social/Legal Characteristics and Developments ................................ 50
3.3.5 Environmental Characteristics and Developments............................. 53
3.3.6 Summary................................................................................ 57
3.4 Characteristics of Fresh Food Production Systems ................................... 58
3.4.1 Overview................................................................................... 58
3.4.2 Formulation.............................................................................. 59
3.4.3 Processing .................................................................................. 60
3.4.4 Packaging.................................................................................. 61
3.4.5 Storage and Delivery.......................................................................... 62
3.4.6 Summary...................................................................................... 63
3.5 Case Study 1: Yogurt Production .............................................................. 64
3.5.1 Market Segments and Case Study Overview ..................................... 64
3.5.2 Raw Milk Collection.......................................................................... 67
3.5.3 Raw Milk Preparation ........................................................................ 69
3.5.4 Fermentation ................................................................................. 70
3.5.5 Flavoring and Packaging.................................................................... 71
3.5.6 Storage and Delivery.......................................................................... 72
3.6 Case Study 2: Sausage Production ............................................................ 72
3.6.1 Market Segments and Case Study Overview ..................................... 72
3.6.2 Input of Ingredients............................................................................ 75
3.6.3 Grinding and Mixing.......................................................................... 76
3.6.4 Chopping and Emulsifying ................................................................ 76
3.6.5 Stuffing and Tying ............................................................................. 76
3.6.6 Scalding ........................................................................................ 77
3.6.7 Maturing and Intermediate Storage.................................................... 78
3.6.8 Slicing and Packaging........................................................................ 78
3.6.9 Storage and Delivery.......................................................................... 79
3.7 Case Study 3: Poultry Processing.............................................................. 80
3.7.1 Market Segments and Case Study Overview ..................................... 80
3.7.2 Transport of Animals ......................................................................... 82
3.7.3 Stunning and Bleeding ....................................................................... 83
3.7.4 Scalding and Eviscerating.................................................................. 84
3.7.5 Chilling .............................................................................................. 84
Table of Contents XI
3.7.6 Rough Cutting ..................................................................... 85
3.7.7 Fine Cutting................................................................................... 86
3.7.8 Packaging..................................................................................... 86
3.7.9 Storage and Delivery.......................................................................... 87
3.8 Conclusion................................................................................ 87
4 The Fresh Food Industry抯 Profile Regarding APS Systems........................ 89
4.1 Methodological Remarks................................................................. 89
4.2 General Requirements ..................................................................... 90
4.3 Requirements for Strategic Network Design ............................................. 93
4.4 Requirements for Demand Planning.......................................................... 95
4.5 Requirements for Supply Network Planning ........................................... 100
4.6 Requirements for Purchasing & Materials Requirements Planning ........ 101
4.7 Requirements for Production Planning and Production Scheduling........ 103
4.8 Requirements for Distribution Planning.................................................. 109
4.9 Requirements for Transport Planning...................................................... 111
4.10 Requirements for Demand Fulfilment and Available-to-Promise ......... 114
4.11 Conclusion............................................................................ 116
5 Shelf Life in Fresh Food Industries .............................................................. 117
5.1 Shelf Life of Food Products..................................................................... 117
5.1.1 Definition and Limiting Factors....................................................... 117
5.1.2 Determination of Shelf Life ............................................................. 119
5.1.3 Technological Shelf Life Extensions ............................................... 120
5.2 Shelf Life Characteristics of Case Study Products .................................. 121
5.2.1 Case Study 1: Shelf Life of Yogurt.................................................. 121
5.2.2 Case Study 2: Shelf Life of Sausages............................................... 122
5.2.3 Case Study 3: Shelf Life of Fresh Poultry........................................ 123
5.3 Shelf Life in Fresh Food Supply Chain Management.............................. 125
5.3.1 Literature Review............................................................................. 125
5.3.2 Role of Shelf Life in Fresh Food Supply Chains ............................. 127
5.4 Conclusion................................................................ 128
6 Shelf Life Integration in APS-Systems ......................................................... 131
6.1 Introduction ........................................................................... 131
6.2 SAP APO................................................................................................. 131
6.2.1 System Overview ............................................................................. 131
6.2.2 Shelf Life Integration ....................................................................... 134
6.3 PeopleSoft EnterpriseOne........................................................................ 137
6.3.1 System Overview ............................................................................. 137
6.3.2 Shelf Life Integration ....................................................................... 139
6.4 CSB-System ............................................................................... 140
6.4.1 System Overview ............................................................................. 140
6.4.2 Shelf Life Integration ....................................................................... 143
6.5 Summary and Conclusion........................................................................ 143
XII Table of Contents
7 Shelf Life Integration in Yogurt Production ............................................... 147
7.1 Problem Demarcation and Modeling Approach ...................................... 147
7.2 Model Formulations .................................................................. 152
7.2.1 Model 1: Model with Day Bounds................................................... 152
7.2.2 Model 2: Model with Set-up Conservation ...................................... 159
7.2.3 Model 3: Position Based Model....................................................... 163
7.3 Computational Results............................................................... 171
7.3.1 Simultaneous Optimization of All Lines.......................................... 171
7.3.2 Line Decomposition Approach ........................................................ 173
7.3.3 Model Combination and 揚ick-the-Best?Approach........................ 174
7.4 Conclusion............................................................................ 177
8 Shelf Life Integration in Sausage Production.............................................. 179
8.1 Problem Demarcation and Modeling Approach ...................................... 179
8.2 Model Formulation......................................................................... 183
8.3 Computational Results................................................................... 191
8.4 Conclusion.................................................................. 195
9 Shelf Life Integration in Poultry Processing................................................ 197
9.1 Problem Demarcation and Modeling Approach ...................................... 197
9.2 Model Formulation...................................................................... 200
9.3 Computational Results................................................................. 206
9.4 Conclusion.................................................................... 209
10 Conclusions and Recommendations ........................................................... 211
10.1 Summary of Results .................................................................... 211
10.2 Discussion ....................................................................... 213
10.3 Recommendations for Further Research ............................................... 215
References..................................................................................... 217