fresh supply chain

Supply Chain: Fresh Food Ecommerce

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Analyze the infrastructure of fresh food e-commerce companies and suggest an improvement plan

Introduction

Fresh food has not been preserved and is still fresh. The supply of fresh food is increasingly becoming popular among consumers. Fresh food supply companies have their businesses from physical retails to online platforms. Most companies are willing to invest in providing fresh food via the internet due to the high purchasing frequency of fresh food products. Fresh Del Monte is one of the world’s largest suppliers of fresh food. To successfully provide fresh food through e-commerce, companies have to build a robust online infrastructure that can support the business. For the success of Fresh Food to be sustainable, the customers have to receive the best services, which explains why the infrastructure must be well-developed (Gu, 2017). This dissertation will analyze the infrastructure for fresh food supply and suggest how the infrastructure can be improved.

Objectives of the Paper

1. Discuss the key elements of e-commerce infrastructure

2. Identify the shortcomings of the existing infrastructure

3. Suggest the use of smart technologies to address the gaps that exist in the infrastructure

4. To assess the benefits that can be achieved through smart technologies to bolster the fresh supply technology.

2. E-Commerce Infrastructure

a. Critical Elements of Ecommerce infrastructure

One of the key elements of commerce structure is marketing. After developing an eCommerce platform, the developers must market it so that the people are aware of its existence. Failure to market the eCommerce platform leads to fewer consumers because some will not be aware of its existence. The second element of a robust eCommerce infrastructure is that it must be facilitated. One advantage of the eCommerce business is that it provides flexibility, unlike the brick and mortar structures. The customers who want to purchase fresh food on the eCommerce platform must be able to do that with ease to avert customer apathy. Therefore, the platform must be flexible enough to meet the needs of the customers.

The other important element that an online platform should provide is information technology at the core of the eCommerce business. E-commerce companies must be able to have their own IT infrastructure and serve their businesses. Lastly, the infrastructure should provide a great customer experience to encourage more purchases at the company. Therefore, the eCommerce infrastructure must provide the best marketing options, have the needed facilities, install the most relevant infrastructure technologies, and provide a great customer experience.

b. Agricultural Supply Chain Infrastructure in the US and Japan

The Supply Chain in the US

Production base

The present food supply chain in the US is affected by many factors, including policies and environmental change. The food system in the country has become complex, unlike before, as many actors come into play before the food eventually reaches the end-users (Council et al., 2015). Agriculture production in the US begins with the farmers, fishers, and ranchers who use capital to develop agricultural raw products. The food sold directly to consumers in the US is greatly reduced (Council et al., 2015). The farmers sell most agricultural food products to first-line handles or aggregate processors. The food products sold to the first line handles are then packaged and stored or transported to retailers and wholesalers to access the food directly. Most of the agricultural production processes are automated. Some of the automated agricultural processes include irrigation and harvesting systems (Casey and Smith, 2020).

Further, there has been an increase in the use of artificial fertilizers to increase agricultural production. Also, automation of agricultural output has been witnessed in the warehouses and distribution of agricultural produce and groceries (Casey and Smith, 2020). Some of the evidence that proves automation in this level of the supply chain is the use of Automated Guided Vehicles (AGVS) instead of traditional lifts (Casey and Smith, 2020). Therefore, some of the agricultural processes in the US have been automated, which has reduced the labor costs for some farmers.

Transportation of Agricultural Products in the US

The major forms of transport used to transport agricultural products from the farms to the processing industries include railways, waterways, and railroads. There are different types of semi-trucks that travel around different states and countries to collect agricultural produce. Examples include the Grain Hopper Trailers and the Refrigerated van.

Cold Chain Logistics in the US

A cold chain is a temperature-controlled supply chain. The cold chain market in the US has been on the increase, and it is projected that it will continue increasing with time. One of the factors contributing to the increasing use of the cold chain is the growing demand for healthy lifestyles due to the growing number of diabetes and high blood pressures 9Rsearch and Markets, 2020). Chilled and perishable foods cause many challenges, which has been the reason for the increase in demand for the cold chain supply. A cold chain is achieved during transportation. Semi-trucks such as the Refrigerated Van provide controlled temperatures for farm produce while transporting them to the markets (Research and Markets, 2020). Therefore, the cold chain in the US is widely used to ensure food remains uncontaminated during transport.

The Fresh Food Ecommerce Industry

In the US, most customers are becoming adapted to making online food purchases due to accessing the products. Most eCommerce food products are fruits, vegetables, and beverages (Begley et al., 2020). Most online vendors have ventured into the business upon realization of its large markets in the country. The online fresh food providers engage the farmers directly to evaluate their farming methods before making orders of the foods. Many groceries are developing more advanced eCommerce platforms that can encourage customers to make more fresh food products online. Among some of the advancements, the companies have undertaken to offer ready-to-eat and ready-to-heat meals, meal kits, and vending machines for fresh products (Begley et al., 2020). Health awareness is being promoted by eCommerce fresh food providers across the country. The number of groceries covering the country has rapidly increased.

The main challenge within the US fresh food e-commerce is the volatility of the supply chain. There is a growing need for increased traceability of fresh foods during shipment to end-users. The customers who make purchases at the fresh food e-commerce have regularly argued for improved traceability of their foods while being transported. Also, the volatility impacts have been felt due to the growing regulations on fresh food e-commerce supply chains. Transparency in the supply of fresh food has been an issue which the eCommerce supply chain infrastructure has failed to address. The ever-changing commodities of agricultural products place the eCommerce supply infrastructure at risk.

Agricultural Supply Chain in Japan

Production base

The agricultural supply chain in Japan is different compared to the American. While the consumers can track the origin of the food products in the US, the food system is opaque in Japan. Agricultural produce is transported to the retailers where the consumers can source for them. However, no information is usually provided about how the foods are grown. Farming in Japan is regulated by Japanese Agriculture (JA), which puts a strain on the agricultural products manufactured in Japan (Tokyo Hackerspace and Website, 2019). In Japan, farming automation is used to solve the country's challenges regarding farm production. In Japan, robots are used to control carry out farming activities (Automation, n.d). The robots perform all the activities except planting, which has to be done by human hands.

Further, unlike in the US, where food products are directly sold to consumers or first-line handlers and aggregate processors, farmers take their food products to the JA warehouses in Japan. Because of the vast connection to many wholesales, produce wholesalers pick the farmers' produce at the JA warehouses for sale. After the sale of the product, the farmers are then paid. If the products are not sold, the farmers incur losses. This form of food supply system has made agricultural products in Japan costly even though the farmer gets a fraction of the total pay. Therefore, the farmers are at the bottom of the supply chain in the Japanese agricultural supply chain.

Transportation of Agricultural Products in Japan

Agricultural products in Japan are transported using railroads and railways. Due to continued advancement in robotic technology in Japan, the transport of agricultural products has witnessed automation. That is because; the vast farming population has aged, making it difficult to participate in agricultural production fully.

Cold Chain Logistics in Japan

Like in the US, Japan uses cold chain logistics to ensure the food remains healthy until it reaches the end-users. To maintain food freshness, different technologies are used in Japan. The cold chain system is central to maintaining the freshness of the food and involves precooling and warehousing sectors insulation. Precooling happens after production and ensures that organic acids are prevented from reaching the foods.

Food Fresh Ecommerce in Japan

Online business in Japan has been on the rise, and fresh foods eCommerce companies have utilized the opportunity to source fresh food produce and products to supply to the consumers. In 20102, the online food retailers tremendously increased to 13.7 and made the industry one of the fastest-growing segments. Rakuten Ichiba is among the leading supplier of fresh food in Japan via the online platform.

How Leading Companies Operate Fresh Supply Chains

Leading companies in the US and Japan operate a distinct supply chain from other fresh food supply chains. While the online retail markets for the fresh food industries have not proved successful, Amazon Fresh, unlike other online groceries, fills the truck for shipping groceries with the high volume of agricultural produce (Seifert et al, 2020). Further, Amazon Fresh uses replenishment centers located away from urban centers, unlike its competitors located within the towns. In Japan, the leading fresh food online food eCommerce provider has been RakutenIchiba. The company has achieved an edge in the eCommerce industry over its competitors because of several strategies. One of the strategies the company has introduced a one delivery end-to-end logistic service. The vision, which was mapped in 2018, aims at reducing the operational costs incurred by the company while it tries to optimize the available opportunity provided by increased access to the internet. Also, the launch of one delivery strategy was to enhance the stability of the online store operations in Japan. Another strategy that the company has taken is opening up new logistic centers. The opening of the new logistic centers in Japanese cities has helped the country enhance its dominance in the country, leading to increased dominance of the company.

3. Applications of Smart Technologies in Fresh Food Ecommerce

Smart technology does self-monitoring, analysis, and reporting. Smart technologies have become germane in the current market climate, where businesses and consumers exchange information daily. Amazon Fresh has used smart technology to eliminatethe traditional checkout line (Shaban, 2020). By eliminating the checkout line, the customers can now purchase groceries by signing into their Amazon app and ordering their groceries (Shaban, 2020). The Dash Cart provided information about what is inside the retail and provides the customers with an exit through a dedicated lane to pay for their groceries (Shaban, 2020). The Amazon stores also provide customers with features that enable them to go through the list of groceries and order the foods they want (Shaban, 2020). On the other hand, Rakuten Ichiba, a leading Fresh Food supplier in Japan, has launched several technologies to increase the supply of online foods to the Japanese. The company has deployed the use of Drones to supply fresh foods to Japanese in remote areas.

Conclusion

In conclusion, the fresh food e-commerce supply chain is affected by the nature of a country's entire agricultural supply chain. To better understand the fresh food eCommerce supply, an analysis of the agricultural supply chain for the US and Japan has been carried out. For the fresh food e supply, many factors limit its success. Among the factors is the low-profit margin earned from the businesses despite many consumers favoring the online stores. To overcome the challenges, the SMART technology can be adopted by various organizations and companies. A case study that proves the usefulness of SMART technology can be found at Amazon Fresh. The company has been able to attract more customers through the Amazon store, which operates as a physical retail store.

References

Akiba Akiba is a co-founder of Tokyo Hackerspace, & Website. (2019, May 2). The Food Chain: Japanese Agriculture - From Farm to Supermarket. Hackerfarm. https://hackerfarm.jp/2019/04/the-food-chain-japanese-agriculture-from-farm-to-supermarket/ . Date Accessed: May 4, 2021

Automation: The Solution to Japan's Farming Woes? (n.d.). https://blog.rebellionresearch.com/blog/automation-the-solution-to-japan-s-farming-woes#:~:text=Japan's%20farming%20industry%20has%20been,for%20the%20past%20thirty%20years.&text=However%2C%20some%20firms%20are%20taking,to%20boost%20efficiency%20and%20output . Date Accessed: May 4, 2021

Begley, S., Marohn, E., Mikha, S., & Rettaliata, A. (2020, February 14).Digital disruption at the grocery store.McKinsey & Company. https://www.mckinsey.com/industries/retail/our-insights/digital-disruption-at-the-grocery-store# . Date Accessed: May 4, 2021

Casey, M., & Smith, E. (2020, December 1). Automation from farm to table: Technology's impact on the food industry. Brookings. https://www.brookings.edu/blog/up-front/2020/11/23/automation-from-farm-to-table-technologys-impact-on-the-food-industry/ . Date Accessed: May 4, 2021

Council, N. R., Nesheim, M. C., Oria, M., & Yih, P. T. (2015).A Framework for Assessing Effects of the Food System. National Academies Press.

Gu, Q. (2017). Strategy Development of Fresh food E-commerce in China.Proceedings of the 2017 International Conference on E-Society, E-Education, and E-Technology - ICSET 2017. https://doi.org/10.1145/3157737.3157742

Research and Markets. (2020, October 26). The United States Cold Chain Logistics Market 2020-2025 - Growing Organic Food Market & Increasing Multi-Temperature Trucking. GlobeNewswire News Room. https://www.globenewswire.com/news-release/2020/10/26/2114058/0/en/United-States-Cold-Chain-Logistics-Market-2020-2025-Growing-Organic-Food-Market-Increasing-Multi-Temperature-Trucking.html#:~:text=Competitive%20Landscape-,The%20cold%20chain%20logistics%20market%20of%20the%20United%20States%20is,trucks%20and%20freight%20optimisation%20software Date Accessed: May 4, 2021

Seifert, R. W., & Markoff, R. (2018, August 23). Amazon Fresh and the disruption of the supply chain: IMD article. IMD business school. https://www.imd.org/research-knowledge/articles/amazon-fresh-and-the-disruption-of-the-supply-chain/#:~:text=The%20company%20has%20a%20supply,centers%20just%20outside%20urban%20centers . Date Accessed: May 4, 2021

Shaban, H. (2020, August 27). Amazon launches a new grocery store with 'smart' shopping carts and Alexa guides. The Washington Post. https://www.washingtonpost.com/business/2020/08/27/amazon-fresh-store-los-angeles/ . Date Accessed: May 4, 2021

 

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�Need data/graph to prove the proportion of automation farming in US, in order to explain why US supply chain is more mature than China

�This content can be combined with the cold chain part to say; “the complete and convenient transportation network in the United States is an important reason for the development of cold chain logistics in the United States.” We need data to prove this statement

�Do not need to state the definition of cold chain logistics in US, we need to find out why and how strong the US cold chain logistics is…. such as because the US convenient transportation network; very early history of cold chain development and experience

�Cold chain logistics circulation rate in US? Need data prove, dissertation need evidence…

�Too general… no need too much definition here…

�Need data/graph to prove the proportion of automation farming in Japan, in order to explain why Japan supply chain is more mature than China

�this content can be combined with the cold chain part to say

�too general…no need definition…here we have to say how Japan cold chain logistics? Is it mature? Why mature? Is it creative? Where creative? Need data evidence

�here have the data that is good.

But what’s the meaning of 13.7? where is the sourcing evidence

�We should focus on the applications of smart tech in the step of production and logistics (cold chain), to meet the topic (e-commerce infrastructure).. so here the smart tech is not good enough to explain