The food industry loses billions of dollars in perishable items each year. Here are four situations where IoT devices can help businesses become more efficient.
One year ago, European-based publisher and marketer I-Scoop, called 2017 "the year the Internet of Things will die." "Good old principles of true usefulness are all too often put aside for applications and 'smart' devices that you don't need or want," said a post on the company's site.
To be sure, these are strong words—but as I've covered before, there's some truth in them.
However, if there's a dark side to IoT results, there are also plenty of bright spots where purposeful IoT shines and companies are benefiting. One story worth telling is about progress being made in the food industry, which, according to one 2015 report, loses $160 billion a year in waste.
"We're still seeing 30-40% food waste levels post harvest, and half of this waste is occurring before food even gets to consumers," said Peter Mehring, CEO of Zest Labs, which provides food supply chain technology solutions. In fact, the waste is so bad, that Mehring said the standard practice for food retailers is to automatically figure in a drop of 15 points of their 38 point profit margins for produce due to food waste and spoilage.
Placing sensors at food source points of origin, distribution points, and on trucks, trains, and planes was first wave of IoT, big data, and analytics deployment to stop the waste. This definitely helped with food track and trace and it also favorably impacted waste—but industry practitioners didn't feel it was enough—so they challenged their IoT and analytics to do more.
SEE: Enterprise IoT calculator: TCO and ROI (Tech Pro Research)
The result has been a new breed of purposeful IoT and analytics that is starting to attack elements contributing to food waste that were never even thought of before.
1. Food processing
"Digital cameras in the plant can monitor the de-boning process of a turkey and give immediate feedback to a food operator to help improve performance," said Karl Deily, president of food care at Sealed Air, which provides packaging solutions for food and other industries. With immediate feedback, the operator does a better job the next time around, and waste is reduced.
A load of strawberries from a producer can arrive at the processing plant, but that doesn't mean that all of the strawberries, even if they are picked on the same day, are at the same level of freshness.
"At the processing plant we can measure the rate of respiration in the berry," said Deily, who explained that strawberries picked doing early morning cool hours were likely to stay fresh longer—and respirate at lower rates—than strawberries that were picked at the same farm, but in the hotter, late afternoon.
In the processing plant, IoT sensors can monitor fruit respiration rates and freshness so that packaging can be customized at the point of packaging to match the respiration rate of the fruit, thus extending the shelf life and reducing waste.
3. The warehouse yard
In the area of food transport, an end-to-end supply chain is still a work in progress. Warehouses and distribution centers are well-equipped with IoT sensors and analytics, and processing plants are getting better, but there are still holes—like warehouse yards, where a truck with a load of lettuce can sit for three weeks because it was overlooked. This is a risk because many of the warehouse management systems that managers rely on do not extend to the yard, which must be manually tracked, and can be missed. To address the issue, warehouse management software providers are now extending coverage to the yard and are tracking yard assets with IoT. Eliminating this system visibility gap should reduce spoilage risk.
SEE: Special report: Cybersecurity in an IoT and mobile world (free PDF) (ZDNet/TechRepublic special feature)
4. The retailer
This brings us back to the retailer. How can retailers improve profit margins and reduce spoilage?
"Right now, a retailer gets a load of lettuce and the expiration date tells the retailer that the item has 10 days of shelf life," said Mehring. "In reality, the average shelf life of the lettuce is only 6.5 days."
Retailers have little direct control over the supply chain visibility gaps that their suppliers and transporters have, nor are they privy to plant respiration statistics and the mitigating steps that are or are not taken
However, they do have analytics systems that can track items like shelf life and attach these results to specific suppliers, transporters and regions of supply so they have improved visibility of who is providing them with the freshest produce with the lowest rate of spoilage.
"We worked with one retailer that was able to improve its supplier expiration date compliance rate by 85 percent. The retailer was able to make more informed decisions on where to source produce from," said Mehring. This was purposeful use of analytics and IoT that directly improved profit margins and reduced waste that the retailer previously had believed were impossible to achieve.
What do all of these applications have in common?
Each attacks a specific area of food spoilage that was never thought solvable, and it does so with IoT and analytics.
The business cases are proven. Now the spotlight is focused on more widespread adoption.
- IBM partnership aims to create smart shipping port with IoT sensors, AI, big data (TechRepublic)
- Report: Industrial companies are moving toward connected tech, but cybersecurity is being forgotten (TechRepublic)
- 10 companies that are spearheading digital transformation in their industry (TechRepublic)
- The five industries leading the IoT revolution (ZDNet)
- What is the IoT? Everything you need to know about the Internet of Things right now (ZDNet)
- Internet of Things projects: Why your business needs to build a digital double (ZDNet)