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E-Supply Chain Technologies & Applications EBC 6230 Winter Session 2014

Title : -Application of Electronic Enablers for Supply Chain Management of Dairy Products
Submitted to: Dr. Mohamed Baymout

Prepared by:
Alhassan Abdullahi Ohiomah (7128495) Shihab Ahmed (7505149) Loay Ahmed Alkibsi (6697666) Kwasi Appiah (7516413) Pouria Ghaternabi (7050754)

Industry overview Upstream Supply Chain Downstream Supply Chain Supply Chain Challenges Traceability Case Study

Dairy Industry Overview

2.1 %







Milk Supply Chain Functions

Upstream Supply Chain Downstream Supply Chain

Milk Collection Sources

Small Cooperative Direct Farm Dairy Boards

Co-operatives Direct from Farm Dairy Boards

Upstream Supply Chain

Down Stream Supply Chain

Materials Flow


Information Flow

Dairy Products Processing Plant



Labeling Manufacturing


Distribution Center

Corrugated Paper / Plastic Company

Dairy Industry Challenges

Diverse Food categories
Milk & other goods Beverage to powder Solid to viscous Packaging: canned, bagged, boxed

Price Deflation
Low-margin business Customers demanding lower prices

Need to deal with the complexity and decreasing prices

Power shift in industry

Power shifting from manufactures to Retailers (Wal-mart, etc) Everyday low prices strategy

Dairy Industry Challenges

Seasonal fluctuations Changing quality of raw materials.
Farmers can produce as much or as high a quality during certain seasons of the summer

Consumer demands changes based on seasons.

More ice cream in summer, less in winter.

Need to control and efficiently manage variances in the quality and quantity of raw milk collected

Lack of access to real-time data about the milk can lead to inefficient raw material utilization and inaccurate demand planning and forecasting further down the supply chain

Dairy Industry Challenges

Changing consumer taste and requirements (Mass customization)
Diverse population with differing tastes. Changing lifestyle (more health conscience) Expect High Quality, availability, and value.

Need to produce and deliver increasingly diverse product lines with differing labeling & packaging requirements

Food safety and security legislations

Contamination Bio-terrorism Traceability laws Need to increase the integrity and accountability of the supply chain.

Traceability in the Dairy Industry

Widely deployed technology is electronic traceability systems such as ERP systems. Bar-Codes, RFID tags and Computer produced labels are pervasive in the dairy foods industry.

Why Traceability is Important

Improves efficiencies and effectiveness in the supply chain process. Easy search and quick access in all systems involved in the supply chain. Monitoring of product movement and information relating to product quality. For product recall and withdrawal.

RFID enabling supply chain of milk from farm to store

IN THE FARM For identification of cows Enables automated calf feeding. It facilitates the use of automatic drafting gates in some farms. Utilized to monitor the entrance and departure of a cow from the milking parlor and to record a cows milk production. IN PRODUCTION PLANT Product Identification. Product Information and Contents. The manufacturer is able to track the product through wireless radio communication.


RFID enabling supply chain of milk from farm to store

IN THE FARM For identification of cows Enables automated calf feeding. It facilitates the use of automatic drafting gates in some farms. Used to monitor a cows entrance and departure from the milking parlor Used to record a cows milk production

IN PRODUCTION PLANT Product Identification. Product Information and Contents. The manufacturer is able to track the product through wireless radio communication.

Case Study:


A Finnish Producer of Dairy consumers products Owned by 18 Finnish milk co-operatives

Number 1 and market leader in Finland and exporter to over 60 countries.

Some of Valios products are Valio Zero Lactose milk powder, spreads, cheese etc.


Shipment Process at Valio

Milk is chilled, pasteurized, containerized and placed on trolleys to fill orders.(Automated robotics) Workers remove cart from conveyor line to staging areas. Carts are loaded onto trucks.

Challenges in supply chain @Valio

Shipment on to wrong trucks Shipment at wrong times Poor visibility of supply chain

Tag wheel with built-in Passive UHF tags


RFID Reader Antennas


Tag wheel and antennae in use


Benefits of RFID Technology implementation at Valio

End to end visibility Reduction of Errors in wrong shipments Software issues instant alerts via warning lights, text and email in the event of wrong loading or incorrect time. Reduction in the amount of manual labor.


Dairy Industry is has a very complex product line that is compounded by the products very short life span. Retailers & Customers are forcing downward pricing pressures on industry. Demand of dairy products is increasing world wide, necessitating innovation in the supply chain. Industry is using latest technologies to manage the supply chain and efficiently monitor products.



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