Grocery stores operate on paper-thin profit margins, and cannot afford to overstock inventories or to let food go to waste. Grocers and food suppliers also want to avoid food contamination issues that can negatively impact their reputations and discourage consumers from doing business with them.

For stakeholders in both of these groups, big data is making a difference by helping them manage food chain supply challenges. Here’s what’s happening.

SEE: How big data is changing farming (PDF download)

Benefits of IoT, barcodes, and traceability

Barcode and sensor-based Internet of Things (IoT) data is being applied to food chains from their points of origin (e.g., in the orchard where apples are picked) to their follow-up destinations in processing plants, storage warehouses, distribution points, and in the grocery stores. The end-to-end tracking and traceability that sensors and barcodes provide enable store chains, food brands, and goods supply networks to quickly identify points of origin and distribution if it’s discovered that food is contaminated. This facilitates rapid mitigation of a situation.

In 2011, President Obama signed into law strict food monitoring and traceability measures that included traceability data such as the box or case of fruit, its point of origin, the name of the product, the name of the transportation provider, etc. The information is captured and recorded in a central database. “This information is vital for meeting the new requirement of tracing the product ‘one forward and one back,’ in each point of the supply chain,” said Don Ratliff, co-executive director of Georgia Tech’s Supply Chain & Logistics Institute, in an interview with Material Handling & Logic.

SEE: The power of IoT and big data (Tech Pro Research)

Optimized logistics

Trucks carrying produce and other foods to market are now equipped with sensors so that logistics providers can see where these vehicles are located on their routes at any point in time. This IoT-facilitated data visibility allows transport providers and those who employ them to make on-the-spot decisions, such as re-routing a truck to Washington. D.C. from Atlanta because of a food shortage for a particular item that the truck is carrying in the D.C. area.

Greater inventory visibility

The ability to get foods into stores for sale quickly and then to monitor sales is extremely important when you manage tight profit margins, and you want to avoid prolonged times on food sitting on the shelf. Grocers now use inventory barcodes and sensor-collected data to determine how quickly food inventory is consumed so that stocking levels can be set to meet but not exceed demand.

Extra insurance that food stays safe

Refrigerated goods and other foodstuffs that require being maintained at certain temperature and humidity levels are now packed inside of sealed containers that are equipped with IoT sensors and monitoring. The sensor on the inside of a container can send out alerts to a central network if there is a detected malfunction in the temperature or humidity controls, or if the sensor detects that a container seal has been broken. This enables personnel in the food supply chain to immediate mitigate the situation, thereby reducing the threats of food contamination and spoilage.

SEE: Big data’s vital role in solving urgent food safety problems

What other industries can learn from these use cases

These food chain big data successes have exponentially improved performance for grocery stores and those who produce and ship food for them. There are three valuable things that other industries can learn from these use cases.

1: Stick with very specific, tightly defined projects

When it was determined that sensors placed in containers could detect food container environmentals and seal breakage and then transmit alerts to a central network, that was what food and transport companies focused on–they didn’t try to make the business case too big.

2: Look for results in revenues or cost savings

Sensors in food containers alerted staff to flawed environmentals so they could quickly remedy the situation, saving food from spoilage or contamination. Results like this easily translate into saved dollars and improved profit margins.

3: Work on one IoT technology at a time

The goal in tracking trucks on routes was to ensure that the most optimal time and safety routes were taken and also to more readily reroute trucks with produce and other perishable goods to the markets that most needed them.

For this purpose, companies in food and logistics instrumented sensors, IoT, and networks to track the whereabouts of trucks. This single application of IoT resulted in many benefits, including better inventory management and customer fulfillment. They kept it simple by implementing only one IoT technology concept.