General flowchart When the cold storage warehouse receives goods from truck, the staff will unload, detect for damage, compare with the purchasing orders PO, and then sort the goods base
INTRODUCTION
System requirements
Cold storage warehouse is used to preserve and expand the period of usability of perishable products Several import-export companies such as Homefarm, V-food Vietnam, Fuji Fruit, and others are utilizing cold storage warehouses to safeguard their products until they are marketed Vietnam is a potential market to develop cold storage for both domestic and foreign investors
According to the World Cold Chain Summit in March 2018 in Ho Chi Minh City, Vietnam loses about 7 million tons of fruits and vegetables during storage and transportation yearly Fruits and vegetables account for 31% which is the largest share of wasted food products Of which 26% came from damage due to improper storage, much higher than the Southeast Asian with an average of 15% In addition, cold storage is also one of the most effective solutions for the logistics industry when products are being congested at border gates due to the situation of the Covid-19 epidemic Thus, Vietnam needs to invest in the infrastructure to store fruits and vegetables appropriately
To make the simulation become closer to reality, our group took the Luc Ngan lychee as the sample product The annual consumption of lychee is between 60 and
70 percent in the domestic market; meanwhile, Luc Ngan lychee accounts for 30-40% of the total fresh lychee consumed in the domestic market, especially in Ho Chi Minh City and Ha Noi Capital The market in the south has enormous potential, but it is limited in terms of preservation, so it can only consume 10-15% of the output Without a cold storage warehouse with appropriate conditions, the quality and quantity of lychee could be seriously reduced and then caused significant economic losses.(Source: The eassay on learning about lychee Luc Ngan - Bac Giang, written by Department of Science and Technology in Bac Giang Province)
Objective
The target of this cold storage warehouse:
In this project, we will utilize Flexsim and Arena to visualize the road of transporting process to Ho Chi Minh City and create a cold storage warehouse for fruits, respectively To make the simulation become closer to reality, our group took the Luc Ngan lychee from Bac Giang province as the sample product The performance has an input and releases an output
Thanks to simulation, we can adjust, decide, and manage this system as we desire to observe the results without affecting any real systems Animations are built in the simulation to illustrate the system operation livelier.
Scope and limitations
The cold storage warehouse for fruits would focus on the Ho Chi Minh City because of the crowded population and the high consumption ability
Although our group received an appropriate result as our expectation, there are some obstacles and limitations preventing us from building and analyzing the model
Time limitation is the most serious obstacle Due to the lack of specialized knowledge, our group spent most of the time searching for study materials and data Besides, at the first period, it was difficult for us to understand technical knowledge about simulation, which takes quite a lot of time Therefore, our group had struggled with scheduling the time to finish our model.
SYSTEM DESCRIPTION
Conceptual design
Our group built the process of carrying and storing commodities, which are the Luc Ngan lychees from Bac Giang particularly, to cold storage warehouse in Ho Chi Minh City where the lychees are consumed most domestically Firstly, Luc Ngan District (located in Bac Giang Province) is the place that needs to transport the lychee into Ho Chi Minh City Next, after being harvested and preliminary treated, the lychees are put into foam boxes, marinated with ice and packaged seriously.Then, these boxes of lychee are loaded to trucks and delivered to Ho Chi Minh City Then, trucks delivery them from 1 to 3 days to cold storage warehouses, which has the temperature ranging from 4 to 5 Celsius degrees Finally, based on orders that suppliers have already had, goods are shipped to the modern trade channel including supermarkets and minimarts in Ho Chi Minh City
The process of transporting and consuming Luc Ngan lychees is depicted in Figure 2.1 below This process is divided into 2 parts Part 1 is to transport lychee to cold storage warehouse for storage purposes Part 2 is the process of transporting goods for consumption at supermarkets in Ho Chi Minh City
Figure 2 1: Process for receiving and delivering of Luc Ngan Lychee products
When the cold storage warehouse receives goods from truck, the staff will unload, detect for damage, compare with the purchasing orders (PO), and then sort the goods based on the criteria for each type After that, the cold storage warehouse will provide forklifts for moving the goods into storage area After 1-2 weeks, the goods will be moved to the staging area from the storage area to prepare for orders Then the goods will be labelled and loaded to the truck to transport to the customers The figure 2.2 shows the steps of transporting and storing lychee in a general way in the cold storage warehouse
Figure 2 2: General flowchart of cold storage warehouse
From the general flowchart in Figure 2.2, the detailed flowchart of the process from truck arrives to truck leaves out of cold storage warehouse is shown in Figure 2.3
Figure 2 3: Detail flowchart of cold storage warehouse
INBOUND: When goods are transported by containers to cold storage warehouse, the container will be assigned to a suitable location in preparation for unloading The goods will be unloaded from the containers by the warehouse staff Goods will continue to be checked for damage and compared to purchasing orders after being unloaded from the containers At the stage of inspecting for the damage of goods, 2 cases will happen In case 1, when goods do not meet the acceptable standards of being damaged, the warehouse staff will contact suppliers to carry out the procedures following the contract In case 2, goods that satisfy the standards will be approved and moved to the sorting step In the sorting step, the goods will be divided according to their own criteria for each type and then decided the next step for each types In the case of Luc Ngan Lychee in our simulation assumption, with the type 1 goods, which have the VietGAP certificate, they will continue to be put into cold storage for storage purpose In the opposite, with the type 2 goods, which do not have the VietGAP certificate, the cold storage warehouse will contact suppliers and then collectors from suppliers will come and pick up type 2 goods After completing all the following steps, the type 1 goods will be transported into the storage area by forklifts The figure 2.4 will explain the inbound of Luc Ngan Lychee in cold storage warehouse visually
Figure 2 4: Inbound of Luc Ngan Lychee in cold storage warehouse
STORAGE: Goods are stored in cold storage at a suitable temperature and placed on shelves They will be stored for about 1 to 2 weeks in the storage area
OUTBOUND: In this process, goods will be transported out of cold storage to prepare for shipping to supermarkets and minimarts in Ho Chi Minh City Firstly, the order picking process will be conducted, the goods will be transported out of the cold storage area by forklifts and gathered at staging point Then the labeler will check the quality and quantity of goods and label on these goods to get ready for being taken out of the warehouse After that, the goods are loaded by the warehouse staff to the container and transported to the modern trade channels like supermarkets and minimarts The figure 2.5 will explain the outbound of Luc Ngan Lychee in cold storage warehouse visually
Figure 2 5: Outbound of Luc Ngan Lychee in cold storage warehouse
Physical model
To simulate, our model need the time data of processes such as Unloading, Detecting, Sorting, Labeling, Loading goods, Loading goods type 2 Data were collected through the observation method, which is measuring without trying to affect the process, from the 4 th to the 22 th of May in 2022
Products: Luc Ngan Lychee Boxes
Flow: When the truck enters the door of cold storage warehouse, the staff will do the Unloading, Detecting, Sorting the goods and then move them into the storage area After 1 to 2 weeks, the goods will be moved out and start
Labelling Finally, the staff will do the Loading goods and transport them to the customers In terms of the Loading type 2 process, after Sorting, there are
2 types of goods; however, the amount of goods type 2 is very small compared to the amount of type 1 Therefore, our simulation mostly focuses on the flow of goods type 1
Time period from Unloading to Storage is about 2 to 3 hours(information from advisor) and we assumed that the time period from Storage to Loading goods is the same
Thus, the data collection is the Appendix 1
Based on the data collected from reality, we received the assumption rates of
Percentage of accepting Percentage of rejecting
Using the formula below, we can calculate the average time(minutes) and the sample variance of each process
During data collection, because of the confidentiality of the data inside the cold storage, our team was advised that the data used during the simulation should be assumed and collected from experienced people and online sources in a reasonable and reputable manner After discussing seriously, our group agree to use the input data based on the material A simulation study on warehouse loading system the case of poultry feed production factory on the International Journal of Logistics Systems and Management of authors Emami, S B., Arabzad, S M., & Sajjadi, S M (2014)
Because our flow does not contain all the processes of the material, our group decided to select the data of the processes included in our flowchart only
Table 2 3: Data from the material
Order Name of process Distribution Expression Unit
1 Unloading process BETA BETA(2.08, 0.64) Minute
2 Checking process BETA BETA(0.87, 2.06) Minute
3 Loading process EXP EXP(15) Minute
Our group cannot find reliable data for other processes Therefore, to avoid the bottleneck, which is the point of congestion in a system, our group decided to assume the data of these processes as same as processes that we have already known to achieve the ideal system Our group also have discussed with our advisor to assume appropriate data
Table 2 4: Distribution of problem process
Table 2 5: Data type of create modules
Order Information Input position in model
1 Time between arrival Truck arrive 6 hours
2 Entities per arrival Truck arrive 250 goods
3 Max arrival of truck arriving
4 Time between arrival Collector of suppliers
5 Entities per arrival Collector of suppliers
6 Max arrival of collector Collector of suppliers
7 Time between arrival Vehicle Schedule
8 Entities per arrival Vehicle 1 truck
Order Name of process Distribution Expression Unit
6 Loading goods EXP EXP(15) Minute
7 Storaging in warehouse UNIF UNIF(7, 14) Day
9 Max arrival of trucks to transport goods
Truck arrive: Trucks transport goods to the cold storage warehouse and are parked at the designated location for unloading
Unloading vehicle: The staff will unload goods from the truck into the warehouse to prepare for checking
Checking for problems: The staff will check for the damage to the goods and compare them to the purchasing order If the damaged percentage of the goods is acceptable, the goods will be moved to the next step; otherwise, the warehouse staff will contact the suppliers to discuss the procedures to take care of the damaged goods
Sorting: The staff will classify the goods according to the standards
Put-away: Goods are transported by forklift to the shelves in cold storage
After completing the put away steps, the goods are stored for preservation purposes in the storage area
Storage: Goods are stored from 1 to 2 weeks
Order picking: Retrieving goods from racks when an order is requested
Staging: Goods are gathered at one point after being taken out of the storage are to wait for the next stage
Labeling: The staff will attach the label to goods
Loading vehicle: The staff will load the goods on the trucks that have already waited at the designated place
Truck leave: When the staff receive enough orders, the truck will deliver them to the supermarkets and minimarts that have ordered previously
Build the model simulation by arena application version 14
The system is simulated based on the detailed flowchart and used a similar functional model to represent each component However, these components do not help to simulate the most accurately but only simulate to a certain extent At the same time, the system is added with new modules that are suitable for the operation of the system
Truck arrive (Create module): The module notifies that the trucks come to cold storage warehouse It also describes the number of goods each arrival would be unloaded and the time between arrivals
Number unloaded goods (Record module): The module counts the number of goods entered the cold storage warehouse
Time in WH(Assign module): The module is used to assign a measured value of the time when the goods entered the cold storage warehouse
Unloading vehicle (Process module): The warehouse staff unloads goods from the trucks into the warehouse
Detecting problems (Process module): The detectors check for the damage and compare with the purchasing orders
Not detecting problems (Decide module): The goods will be selected if their damaged percentage is acceptable, and their information is the same as the purchasing order
Number passed detecting goods (Record module): Recording the quantity of goods successfully get over the detecting step
Number failed detecting goods (Record module): Recording the number of goods with the damaged percentage is too high
Contacting to suppliers (Dispose module): The cold storage warehouse will contact suppliers and eliminate the damaged goods out of the main good flow
Sorting (Process module): The detectors will sort the goods based on their criteria of each type
Sorting into 2 types (Decide module): Goods will be sorted into type 1, which is appropriate to storage to wait for transporting to the modern trade channel, and type
2, which is transported out of warehouse by collectors of suppliers
Number goods type 1 (Record module): Recording the number of good types 1
Type 1 (Assign module): Using the assign module to assign a measured value of the number of good types 1
Type 2 (Assign module): Using the assign module to assign a measured value of the number of good types 2
Transforming into 1 forklift (Batch module): Goods type 1 will be loaded on a forklift
Put-away (Station module): Destination of forklifts and loading goods type 1 on forklifts to move into the storage area
Request forklift for put-away (Request module): Requesting forklift to move goods type 1 to the storage area
Transport to put-away (Transport module): Transport goods by forklift to cold storage area
Signal for collector (Assign module): Sending signal to collector to pick up the goods type 2
Waiting for collector (Hold module): Holding the goods type 2 until collector comes
Collector came (Assign model): Collector comes for the purpose of collecting goods type 2
Loading type 2 (Process module): The warehouse staff will load goods type 2 on the truck for the collector to transport them
Number goods type 2 (Record module): Recounting the amount of goods type 2 Done type 2(Dispose module): Completing the flow of goods type 2
Vehicle (Create module): Creating trucks to deliver goods to customers
Waiting for type 1 (Hold Model): Waiting until enough order
Ready to transport type 1 (Assign model): Using the assign module to notify that there is a vehicle to transport goods type 1
Number vehicle (Record module): Counting the number of trucks arriving
Transporting to supermarket (Dispose model): Delivering goods type 1 to supermarkets and end the flow of goods type 1
Collector of suppliers (Create module): Using create module to create collector to come to the warehouse to collect goods type 2
Waiting for type 2 (Hold module): Waiting until there is enough number of good types 2
Ready to transport type 2 (Assign model): Using assign module to notify that collector come to deliver goods type 2
Transporting to collector (Dispose module): Collector picks up the goods type 2 and finishes this process
Storage (Station module): After being classified, the first-class goods will be stored in cold storage
Free forklift 1 (Free module): Indicating that the forklift is available for other processes
Time travel in warehouse (Record module): Counting the time from the unloading step to the goods finally stored in the storage area
Store 1 (Store module): Illustrating that the goods are stored inside the storage area Store in (Record module): Counting the number of goods entered the storage area
Storaging in warehouse (Process module): Goods will be stored in cold storage from 1 to 2 weeks
Unstore 2 (Unstore module): Illustrating the goods are end the storage time and ready to move out
Store out (Record module): Counting the number of goods out of the storage area
Request forklift for order picking (Request module): Requesting the forklift to move the goods out of storage area
Transport to staging (Transport module): Goods are moved to the staging position after being taken out of the storage area by the forklift
Staging (Station module): Destination of preparing for shipping the goods out of warehouse
Free forklift 2 (Free module): Indicating that the forklift is available for other processes
Separating forklift 1 (Separate module): Goods will be taken off the forklift Labeling (Process module): The labelers will attach the label on the goods
Transforming into 1 vehicle (Batch module): The condition of a package must have a constant number of goods, so batching the goods into a number of goods for a truck helps to ensure the above requirements
Signal to vehicle (Assign module): Sending a signal to empty trucks to ship the goods
Waiting for vehicle (Hold module): Waiting until enough orders
Number waiting for vehicle (Record module): Counting the number of goods waiting for delivery
Vehicle came (Assign module): Using assign module to notify that a truck is available
Loading goods (Process module): The warehouse staff will load the batch on the truck by forklift
Number deal done (Record module): Counting the number of batch moved out of the warehouse
Time out of warehouse (Record module): Counting the time from the moment the goods are moved out of storage area to the moment finishing a deal
Done order (Dispose model): Completing order
The animation layout is created using the Arena program
Operation description
Trial 1: 1 transporter(forklift) with velocity 75 feet per minute in the system
Figure 2 16: The model has 1 forklift with velocity 75 feet per minute
Figure 2 17: Waiting time with 1 forklift - speed 75 feet per minute
In figure 2.17, to request a forklift for put away and order picking, we must wait for 3.7277 minutes and 28.8948 minutes on average, respectively Also, the maximum waiting time periods are 26.9484 minutes and 184.79 minutes, respectively We could witness the remarkably high value of waiting time for a forklift Therefore, we tried to change the capacity of transporter in the system We decided to increase the number of transporters while maintaining the velocity as the first trial
Trial 2: 2 transporters(forklift), each has a velocity of 75 feet per minute in the system
Figure 2 18: The model has 2 forklifts, each has a velocity of 75 feet per minute
Figure 2 19: Waiting time with 2 forklifts - speed 75 feet per minute
After increasing the number of transporters to 2 transporters, we can see that the waiting time has been improved significantly The average waiting time to request forklift for put away and order picking have been decreased remarkably to 0.2899 minutes and 1.0086 minutes, respectively The maximum period of waiting time to request forklift for put away and order picking has declined by about 15 minutes (from 26.9484 min to 11.6950 min) for put away and experienced about 7 times decrease from the initial value (from 184.79 min to 26.3235 min)
However, we could see that the average periods of waiting time for unloading, loading goods, and loading type 2 are extremely high
Figure 2 20: The model has 3 warehouse staff positions, each of position has 1 staff
Figure 2 21: Waiting time with 1 staff in each position in three processes
The average waiting time for loading goods, loading type 2, and unloading vehicle are 19187.27 min, 115528.93 min, and 109.95 min respectively, which are far higher than we expected Simultaneously, the maximum values of waiting time for these processes are 22945.57 min, 22903.78 min, and 345.57 min respectively, which means that some processes might take about 8 – 13 days to accomplish It is impossible for perishable products to maintain their qualities in the normal condition for such a long period of time After considering carefully, we decided to change the capacity of resources in these processes while still maintaining the capacity of forklifts and their velocity in the system from the second trial Therefore, we tried to increase the capacity of the resource warehouse staff 1, warehouse staff 2, and warehouse staff 3
Trial 3: 2 staffs for each of positions, namely warehouse staff 1, warehouse staff 2 and warehouse staff 3
Figure 2 22: The model has 3 warehouse staff positions, each of position has 2 staffs
Figure 2 23: Waiting time with 2 staffs in each position in three processes
After changing the capacity of resources into 2 staff for each position, we can see that the average values of waiting time in these processes have decreased considerably (from 19187.27 min to 46.9630 min) in loading goods, (from 11528.93 to 77.8426 min) in loading type 2, and (from 109.95 min to 49.5016 min) in unloading vehicle Besides, the maximum values of waiting time have declined strikingly, namely from 22945.57 min to 306.54 min for loading goods, from 22903.78 min to 325.78 min for loading type 2, and from 345.47 min to 129.54 min for unloading vehicle Therefore, we could believe that the system was improved
Nevertheless, these results were received in 1 replication To increase the precision of the model and reduce variability in results, we tried to increase the number of replications with 10 replications
Figure 2 24: Run Setup with 10 replications
Figure 2 25: Waiting time after 10 replications
Comparing to the figure 2.25, we could see that the average values of waiting time have slightly changed the values We expected that the half width would be smaller or equal to 2 for all the processes We could see that the half width of the process loading goods is a bit too high compared to others Therefore, we applied the formula
Replacing these values n0 = 10, h0=5.52, h=2 into the formula and we have nv, which mean that we would run the model for 76 replications
Figure 2 26: Run Setup with 76 replications
Figure 2 27: Waiting time results after 76 replications
After running 76 replications, we gained the new values of half width, which are lower and equal to 2 for all the processes
After witnessing some changes in the result of each trials Basically, our product is fruits, which is perishable products and needs a strict period of time for transporting và processing Therefore, our purpose is to ensure that the waiting time at each process is acceptable, compared to our assumption By increasing the amount of resources like forklift and warehouse staffs, we can lower the time in the normal condition of fruit products, especially Luc Ngan lychee It means that we could ensure the quality of products and maximize the production of our cold storage warehouse Thus, we could analyze better and make the best operation for the system
To ensure that the model is close to the real system through reasonable assumptions regarding system structure and through reliable data, we need to check for the validation of the input-output transformations of the model cold storage warehouse and see whether it is possible or not
Based on the theory of Verification, Calibration, and Validation of Simulation Models, the model would take the inputs, which are the data collected from reality, and produce the outputs, which are collected from the tool Process Analyzer in Arena
According to the data analysis figure, we can gain the table of average waiting time of all the processes in cold storage warehouse For the purpose of validation, we will consider this to be the true mean value μ 0
Table 2 6: The average waiting time of processes
By using the Process Analyzer tool, we will gain the results of a number of statistically independent replications of the model The results of 40 independent replications are given in the table below
Table 2 7: The average waiting time of processes by process analyzer tool
We will consider the mean value of waiting time of the model response of each process as the outputs denoted by Y, and we also get the sample standard deviation
Table 2 8: The mean value and the sample standard deviation in simulation
Sample standard deviation in simulation
The validation test consists of comparing the system response, namely the average waiting time of processes, and the model response
Formally, a statistical test of the null hypothesis
With Y: result from the Arena model; μ0 : result from the reality
H0: expected value of Arena simulation is equal to the value from the reality
H1: expected value of Arena simulation is not equal to the value from the reality
If H0 is not rejected, then the model is valid If H0 is rejected, the current version of the model is rejected The appropriate statistical test is the t test
To choose a level of significance α and a sample size n, our group is advised to choose α = 10% = 0.1 and n@
Table 2 9: Table of values based on the test statistics
For the two-sided test, if |t 0 | > t α/2, n-1 reject H0 Otherwise, do not reject H0 According to the t table, we get the value t α/2, n-1 = 1.6839 Comparing |t 0 | to t α/2, n-1 , we see those processes including unloading vehicle, detecting problems, sorting, loading type 2, and loading goods have the lower values of t0, which means they are valid However, the value of |t 0 | of labelling process is a bit higher than t α/2, n-1 , which means maybe the labelers have to move between the goods to attach labels, so it takes more time to finish
Using the Process analyzer, we could see that the resource utilizations are between 0.6 and 0.8
Table 2 10: Table of resource utilizations by using the process analyzer
After discussing and searching for information, our group finally found that the values of resource utilizations between 0.7 and 0.8 are appropriate Comparing to the results from process analyzer, we can see that the results are quite acceptable Therefore, the resources of the cold storage warehouse are stable and effective.
SOLUTION DEVELOPMENT
Cases
According to Statista website, the Figure 3.1 illustrates the average monthly consumption of fruits per capita in Vietnam from 2010 to 2020 It witnessed an upward trend, with approximately 1.1 kilograms in 2020 although experienced a slight decrease in 4-year period (0.9 kilogram)
Simultaneously, in Figure 3.2 and Figure 3.3 conducted by Department of Growth - Ministry of Agriculture and Rural Development, data were collected through a comprehensive household research survey in four Vietnamese cities: Ho Chi Minh City, Hanoi, Lao Cai, and Son La The objective of this study was to
Figure 3 1: Average monthly consumption of fruits per capita in Vietnam from
2010 to 2020 (in kilograms) identify consumer preferences and purchasing trends for vegetables and fruits - two high-value products that are increasingly important to small-scale farmers in the Northwest region of Vietnam
Figure 3 3: The percentage of money spent annually on particular food(Department of Growth - Ministry of Agriculture and Rural Development)
Based on these upper figures, we can see that the demand for vegetables (including fruits) is exceptionally large Simultaneously, on average, each urban household spends about 8-9% of its monthly food expenditure on fruits and 12-13% on vegetables More than 90% of the money spent on vegetables and fruits is in
Figure 3 2: : The money spent on vegetables and fruits in traditional markets(Department of Growth - Ministry of Agriculture and Rural Development) traditional markets (such as formal and temporary markets) of which 47-52% goes to fruit and about 58-67% goes to vegetables at formal markets These figures illustrate the customers’ willingness to pay for fruits as well as vegetables To meet this large amount of demand, a continuous supply chain flow should be formed to respond in time and in need However, the humble number of warehouse suppliers does not mean that it will be stored in the right way, which affects most product quality Fresh products like fruit cannot be kept for too long at room temperature because the quality will go down Therefore, it would lead to an increase in the amount of loss and not be in consumers' hands on time.
As reported by the Environment Agency, the Figure 3.4 demonstrates the amount of shrinkage of some food
Figure 3 4: Shrinkage based on some food(Environment Agency)
As reported by the Environment Agency, the food chain in Vietnam escapes about 5.75 million tons per year, equivalent to 60% of the amount of solid waste in the country Concentrating on supply chain, from farm to retailer, there are hundreds of tons of food lost every year by unguaranteed post-harvest preservation and transportation Vegetables and fruits have a high level of loss (30%), while the average in Southeast Asia is 15% For meat items, the rate loss is 14% and for the group of seafood is 12% The level of food shrinkage is high so that half of the products cannot reach the hands of customers And more seriously, the lost products also cause a severely polluted environment.
3.1.1.3 Lack of cold storage warehouse
According to Stopple’s statistics, the Figure 3.5 shows the capacity of commercial cold storage suppliers in Vietnam, along with the fact that the major suppliers of commercial cold storage are mainly concentrated in the southern region due to the great demand These suppliers are classified into four main groups: group of domestic providers, group of foreign providers, group of warehouse firms and others
Figure 3 5: Capacity of commercial cold storage suppliers in Vietnam(Stopple’s statistics)
Before the outbreak of the disease two years ago, the whole country had only 48 large cold storage systems with a capacity of 600,000 shelves At that time, the filling capacity of this cold storage system was at 80%
The cold storage industry is currently a new industry in Vietnam with a history of development over the past 20 years According to StoxPlus statistics, the major suppliers of commercial cold storage are mainly concentrated in the southern region due to the great demand The group of domestic companies is only equipped with basic equipment and simple design, meanwhile, the group of foreign enterprises with a larger capacity (48%) leads the market by making effective use of a professional team and modern equipment
Before the COVID-19 epidemic, the annual growth rate in this segment was 11%-12% Despite the increasing demand, the supply of cold storage is still limited The reason is that the construction time of cold storage is often long, and the cost is extremely high, twice or three times higher than that of a conventional warehouse This has resulted in limited supply and a rapid increase in rents, from $52/ton in early
3.1.2.1 Congestion of trucks carrying agricultural products at the border gate
The sudden increase in demand for storage of agricultural products and food by import-export enterprises affected by the COVID-19 epidemic made the supply not enough demand In fact, during the peak period of the COVID-19 pandemic, about 50% of seafood export orders were canceled, leading to escalating inventories and cold storages having to operate at maximum capacity The COVID-19 epidemic hastened the impact of cold storage shortages
The peak days of COVID-19 pandemic also affected many imported and exported products, especially fruits and vegetables According to the Private Economic Development Research Department, the main inventory items (accounting for 80-90%) at the land border gates with China are agricultural and aquatic products The Department of Private Economic Development, citing data from the General Department of Customs, shows that with the current clearance time of up to 20-30 days, most of these agricultural and aquatic products will be damaged discarded, no longer able to consume The loss of goods, according to the Vietnam Fruit and Vegetable Association, is up to 3,000 - 4,000 billion VND.
The congestion of agricultural products at the border gates of Lang Son province for export to China has occurred continuously in recent years, especially during the COVID-19 epidemic.
Figure 3 6: Congestion of trucks at the border gate(Source: Nguoi Lao Dong)
3.1.2.2 The future for the cold storage industry
As an agricultural country, if it grasps its advantages and has appropriate policies, the cold storage market of Vietnam is considered to grow exponentially along with the development of the commodity market With a growth rate of 12% per year, by
2025, the cold storage real estate segment in Vietnam is forecast to reach a value of USD 295 million, according to Savills Vietnam Soon, realizing the great potential of the cold storage market, large corporations, enterprises, and even foreign investment funds have also stepped up to invest in the construction of cold storage and storage of goods for export in Vietnam.
Specifically, in July 2021, AJ Vietnam Cold Storage Company put into operation the highest cold storage in Vietnam located inside Long Hau Industrial Park, containing 31,000 pallets in Long Hau Industrial Park, Long An Many cold storages have been invested in HCMC recently In Linh Trung Export Processing Zone (Thu Duc City), ABA Cooltrans Group has opened one more cold distribution center with a scale of 10,000m2, with a total investment of 250 billion VND At Tan Tao Industrial Park (Binh Tan District, Ho Chi Minh City), the largest cold storage in Vietnam and Southeast Asia has been put into operation by Hung Vuong Joint Stock Company with an area of 4 hectares, with a total investment of 1,300 billion copper.The pandemic has changed consumer behavior and found the enormous potential for the cold storage market to serve the upcoming demand.
Solutions
There are two alarming problems that need to be handled: quality and demand Cold stores save a lot of money since they limit produce rotting to a minimal To minimize the lost amount of quality during operation, the optimal idea is to enhance cold storage technology for domestic suppliers Through these actions, the warehouses are operated more effectively and consume less energy as well as reduce food shrinkage as little as possible Based on the temperature control system, cold storage warehouses help to store food at low temperatures, which increases the storage time and ensures the quality of the food for supply soon.
Regarding demand, in the long term, in the strategy of attracting investment, localities with strengths in agriculture need to pay more attention to inviting leading enterprises to build cold storage systems, with solutions to support loans for agricultural processing enterprises only partially solve the situation Besides, the government should create ideal conditions for small and medium enterprises to hire large-scale cold storage systems which are constructed by itself.
SWOT
Firstly, goods are conserved more effectively with a well-optimized cold storage system Fresh fruit varieties should be stored at low temperatures to maintain freshness and extend the period of realistic usage As a result, it is necessary to find a solution to this problem A cold storage warehouse is a perfect arrangement with an innovative refrigeration unit to ensure fruit remains fresh when delivered to the recipient.
Secondly, the rate of poisoning fruit is reduced significantly with cold storage warehouses The danger of poisoning is decreased since keeping fruit in a cold environment may generate chemical changes such as changes in enzymic alterations or mold that can be passed from one kind of fruit to another
Thirdly, effective cold warehouses help businesses as well as customers cut back on spending by keeping spoilage of produce to a minimum amount The key problems for perishable goods are cost-effectiveness and product lifespan With a crew of employees, an efficient slotting strategy, and current advances in technology, cold warehouses ensure that post-harvest products are kept as fresh as possible.
Fourthly, retail stores can make use of cold storage warehouses to free up their space Managing wholesale items may be a daunting task, but it is even more difficult when dealing with perishable products that are temperature sensitive Perishable items are difficult to stock in retail businesses since they take up a lot of space Hence, storing all these products in the same warehouse helps to consolidate stocks and makes it easier to keep track of financial transactions.
Firstly, the freezing system accounts for a major portion of the cost of creating a cold storage system As a result, to construct a comprehensive cold storage warehouse, the investor/enterprise will need to invest a considerable sum of money. Secondly, mold and mildew growth are an issue in industrial refrigerators This problem might be caused by mismanaged temperatures or faulty freezer doors However, if carefully controlled, freezer walls will diminish microbiological harborage and particle growth.
Moreover, the warehousing system in Vietnam is now in poor condition Vietnam currently lacks warehouses which can store and preserving fresh items as well as high-value goods The efficient utilization of space is a significant success element in warehousing The efficient utilization of space is a significant success element in warehousing In warehouses with poor facility planning, inadequate storage capacity and inefficient utilization of limited storage are major challenges.
Firstly, a significant number of enterprises have invested hundreds of billions of Vietnam dong in large-scale cold warehouse systems since cold storage logistics has gained in popularity in recent years because of increased potential for perishable food Cold storage systems will become the predominant method of preserving commodities in the future.
Secondly, the need for cold storage has not yet been met in Vietnam, according to the Vietnam Association of Seafood Exporters and Producers (VASEP) Cold storage is not only a need for companies to buy all the shrimp and fish farmers produce, but it also plays a crucial role in assisting seafood processors in generating a sizable supply of commodities and fulfilling export obligations when the market demand picks up.
Thirdly, the need for cold storage warehouses has increased dramatically as a result of people throughout the world increasingly purchasing online, although cold storage facility investment is still relatively low With stay-at-home requirements, more customers shop online This required competitive prices and strict delivery schedules The variety of goods, not only dry goods delivery but also cold storage for food and temperature-sensitive items such as pharmaceuticals, vaccines, and cosmetics entered into this ecosystem drove the demand for expanding services. Finally, there is still a shortage of vaccine supply in many countries The COVID-19 vaccine distribution procedure, a first in the logistics industry, necessitates a very low temperature that is not often needed in cold storage Investors and service providers that can take advantage of the opportunity by purchasing logistics real estate and specialized cold storage would stand to benefit significantly from the requirement for additional facilities and capabilities to fulfill this demand
Temperature stability is a critical priority for protecting frozen foods Temperature changes as low as 0 degrees Fahrenheit can impair food quality and shelf life due to heat infiltration from people, equipment, and everyday operations, seasonal weather fluctuations, and aging equipment and buildings.
Power outages or equipment failures are another thing to consider when preserving frozen food Due to industry and consumer need for power, demand spikes, and rising global temperatures, the electrical infrastructure is continually being pushed to its limitations, which can result in periodic power outages Extreme weather events are also causing more regular power outages in cold storage and supermarket stores Furthermore, the costly and always-on refrigeration equipment was required.
Finally, there is the chance of losing money All enterprises that protect frozen food on their journey to our meals must overcome a number of dangers that reduce profitability The rising cost of power, which is the second greatest expense in cold storage, can be crippling When you add in variable pricing based on the time of day, season, and region, it is easy for an operator to lose money Refrigeration equipment and cold storage facilities require ongoing maintenance and modifications to guarantee that temperature requirements are met while reducing energy use These expenses eat into already slim profit margins, and with these investments, those expenses may be shifted elsewhere in the company.
CONCLUSION
Advantages
Cold Storage Warehouse is designed to save money and labor, as well as preserve such commodities (especially vegetables and fruits) in a fresh start without loss in quality Besides, temperature controls that can be monitored and modified remotely can be added to cold storage refrigeration systems In addition, all companies that require their products to be preserved and transported at low temperatures benefit from portable cold storage units And finally, it is essential to free up space at retail stores by keeping all the bulk food products before delivery as a one-stop solution
In the simulation of Cold storage warehouse for fruit products, we can experience the processes from receiving goods to delivering them to the customers Moreover, we can adjust, decide, and manage this system as we desire to observe the results without affecting any real systems Also, we could arrange the resources appropriately in order to maximize the production of the system; therefore, increase the profit.
Disadvantages
The overall of this project is alright but the order picking process and the put away process are not described clearly To be more specific, each forklift will contain a driver so its velocity is not constant In the model, we use the animate modules to describe these processes more visually instead of using the process model and applying the time data and human resources It means that the realism of the model will a little bit lower.
Applications
Firstly, our simulation may accomplish simulation application through real- world experience Simulation technique can show specific status, find out the bottleneck, and idle resource of the system which gives a detailed description about actual process and information of this logistics system We are creating logical structures to help the system run more effectively and reduce congestion Trying innovative approaches to increase cold storage warehouse performance while lowering wait time and costs More situations should be predicted We can model what would happen if certain conditions occurred using spreadsheets This allows us to make more accurate estimates We may take your existing data and adjust it in response to future changes, such as earning new business or losing a key client Managing data allows us to analyze how much we can spend or afford to lose in simulation under various simulated conditions
Secondly, based on the current state of research for cold-chain logistics distribution centers, this paper examines a cold-chain logistics distribution center for fruits, gathers the necessary data, and builds a simulation model to represent the cold- chain logistics distribution center's operational process The report concludes by outlining specific actions that may be taken to enhance the use of employees, equipment, and cold chain commodities, as well as raise their turnover rates We also investigated a cold storage system by creating a computational model We can analyze system performance using simulation, such as input time of sorting, batch picking process, etc Simultaneously, we can have a comprehensive knowledge of what a cold storage system looks like and compare it to reality to demonstrate how it works and verify that our understanding of the system is accurate Additionally, we can compute how much time is required to run the system successfully
Finally, by applying statistical analysis of the results, we may continue to create the new Arena model from the previous one From this model, readers will achieve knowledge of the inbound and outbound process and learn to demonstrate the flow of the system to collect desired data and information Furthermore, this study also shows how to create a simulation model, using the logic of warehouse management and mathematical application.
Recommendation
In this simulation project of cold storage warehouse for fruit products, in order to visualize the processes of order picking and put away, we cannot analyze these processes appropriately Therefore, our group suggest that more researches would be carried out to contribute to expand the cold storage warehouse market, which is extremely potential in Vietnam
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