A holistic approach for the design and management of an agri fresh produce supply chain: a literature review

Ho Thanh Phong et al | 137 A holistic approach for the design and management of an agri-fresh produce supply chain: A literature review HO THANH PHONG International University, Vietnam National University HCMC – htphong@hcmiu.edu.vn CHANDANA HEWEGE Swinburne University of Technology – chewege@swin.edu.au PHAN THUY KIEU International University, Vietnam National University HCMC – phanthuykieu2006@gmail.com Abstract The paper is a systematic review of the existing literature on the operational research models applied by previous researchers in the context of an agri-fresh produce supply chain The paper aims to generate a deeper understanding of the trends and mathematical modelling methods used in previous research by employing a structured taxonomy of literature classification A chain of intermediaries tends to play a critical role in delivering agri-fresh commodities from farmers to consumers These intermediaries perform various functions including the collection, preservation and delivery of agri-fresh produce, creating linkages among all stakeholders of the supply chain Essentially, the study summarizes most of the technical, organizational and functional solutions that have been used to design optimal fresh produce supply chain management approaches Findings of the paper generated by applying a systematic literature review protocol have significant practical implications and stress the crucial of holistic approaches for the design and management of Agri-fresh produce supply chains with a view to overcoming current challenges in production, distribution and inventory management Keywords: supply chain; operational research; design; agri-fresh produce; modelling; performance measurement 138 | ICJED2017 Introduction A supply chain encompasses all activities associated with the flow and transformation of goods from the raw material stage to end users, as well as the associated information flows As part of operations, the supply chain management (SCM) also plays an important role in maintaining the flow of materials from processing units to the production of finished goods, and then to end consumers (Chopra and Meinnd, 2001; 2007) While producing perishable goods is vital to satisfying the growing global demand for food, the supply chain management of agrifresh produce is equally crucial to delivering goods to the market at the right time and with minimum loss of food quantities and qualities, i.e perishability may occur in one or more stages across the chain (Amorim et al., 2013; Boselie et al., 2003; Nahmias, 1982) from the extremely short processing to transportation times (Gigler et al., 2002; Van Der Vorst et al., 1998) Other characteristics, such as seasonality of Agriculture production (Salin, 1998; Tsubone et al., 1983), long supply lead times (Aramyan et al., 2006; Lowe and Preckel, 2004) and uncertainty in harvest time due to unpredictable weather conditions (Dorfman and Havenner, 1991; Salin, 1998), also make the Agrisupply chain management even more complex As a result, the operational research of Agri-fresh produce supply chain (APSC) has attracted considerable interest of researchers as a mechanism to generate management efficiency through the use of modern decision technology tools It is evident that the major trends related to the principles of operational research models have spread across the scientific literature Over the last 20 years, many lead authors across the world have dramatically concentrated on designing and managing agri-fresh produce supply chains (Greenberg, 1995; Carter, 2011; Pokharel and Mutha, 2009; Seuring and Muller, 2008; Srivastava, 2007) However, it is found that there is a significant level of inconsistency and confusion in segmenting fruits, flowers, and vegetables Thus, there is an acute need for the categorization of the produce to enhance the scalability of the developed models As such, this paper will adopt the definition of Shukla and Jharkharia (2013) on agri-fresh produce (Figure 1) Ho Thanh Phong et al | 139 Figure 1: Product differentiation (Shukla and Jharkharia, 2013) In fact, this paper reviews the key literature on the operational research models that are applied in the fresh produce supply chains and thereby aims to generate deeper understanding of the trends through the structured taxonomy of literature classification Concurrently, the authors synthesize the progression of the previously published papers related to the design and management of agri-fresh produce supply chains with a view to providing directions for further studies The remainder of this paper is structured as follows The next section presents the review methodology we employed in this study This is followed by a detailed description of fresh produce supply chain background In section 4, we synthesize supply chain models that have been developed for agri-fresh produce Then, we discuss the findings towards designing and managing the fresh produce supply chain in Vietnam in section Finally, section concludes this review paper Review methodology “A literature review is a systematic, explicit, and reproducible design for identifying, evaluating, and interpreting the existing body of recorded documents” (Fink, 1998) Thus, the objective of the literature review is to: (1) summarize existing research by determining patterns and issues and (2) identify the conceptual content of the field (Meredith, 1993) 140 | ICJED2017 To synthesize the existing body of knowledge pertinent to the design and management of the supply chain of fruits and vegetables, the authors review various published research articles using a combined approach of deductive and inductive reasoning First of all, the authors focus on some key words by using Google Scholar, including “design and management of agri-fresh produce supply chain”, “Operational models applied for fruit and vegetable supply chain”, “harvesting”, “scheduling”, “Mathematical programming models”, “Multi-objective programming”, “supply chain linear programming models”, “supply chain design”, and so on The search for these key words results in many relevant articles and then the articles are screened by applying criteria of Thomson Reuters, SCOPUS, Elsevier, Wiley or Emerald and in Web of Science to avoid reference biases and select journals that are closely related to the key words Finally, the authors check each paper We follow three common rules: (1) papers written in English language; (2) papers consisting of decision variables modelling the production planning or logistic of fruit and vegetable supply chains, intended for fresh consumption and for production; (3) and even papers of other agrifresh produce are selected after satisfying the rules & Our review results in selecting papers based on their abstracts and highlights, covering 20 review articles and 62 papers in particular Agri-fresh produce supply chains background Lowe and Prackel (2004) reviewed the literature on applications of decision technology tools for a selected set of agribusiness problems in crop planning calling for more research into solving these problems When engaging in a pioneering review of planning models relating to the production and distribution of the agri-food supply chains, Ahumada and Villalobos (2009) pointed out: (1) agri-fresh produce supply chain are more complex and harder to manage than other supply chains, (2) relating to preserving freshness and product quality, it requires more limited delivery deadlines, more controlled storage conditions, better quality of end-products and minimum losses due to deterioration (Dabbene et al., 2008; Verdouw et al., 2010) Audsley and Sandars (2009) revise Operations Research models in agriculture but they limit the review to British developments However, these authors only synthesized holistic systems modelling of the agricultural sector in the past and gave some arguments to explain observed shortcomings Ho Thanh Phong et al | 141 What is more, Akkerman et al (2010) reviewed the quantitative operations management approaches to food distribution management, mainly focusing on three aspects: food quality, food safety, and sustainability Proposing a taxonomy framework based on the following elements: supply chain structure, decision level, modelling approach, purpose, shared information, limitations, novelty and application, Mula et al (2010) review mathematical programming models for supply chain production and transport planning More recently, Zhang and Wilhelm (2011) provided growers and distribution managers’ insights into the variety of decision support possible and benchmarks for improvements in the specialty crops industry, including vegetables, fruits, grapes and wine, ornamentals, tree nuts, berries and dried fruits Meanwhile, Lehmann et al (2012) presented three cases covering agriculture, logistics and food awareness to overview on technology, information content, information organization, and communication and assure the successful utilization of the potential of the future Internet Next, Shukla and Jharkharia (2013) conducted a detailed literature review covering all the operational issues related to the fresh produce supply chain management (fruits, flowers and vegetables) They also paid attention to the consumer satisfaction and revenue maximization with post‐harvest waste reduction as a secondary objective With the product‐problem‐methodology mapping may serve as a framework for the managers addressing issues in FSCM Furthermore, Tsolakis et al (2014) considered Agri-food Supply Chain management as a rapidly evolving research field and offered an integrated hierarchical decision-making framework Concurrently, the critical issues for the design and planning of Agri-food Supply Chain management are defined and discussed to identify gaps and overlaps in the Agri-food Supply Chain literature In addition, Kusumastuti et al (2016) reviewed harvesting and processing in agricultural supply chains based on the findings from a systematic review of 76 papers Soto-Silva et al (2016) reviewed Operations Research (OR) methods in fresh fruit supply chains and come up with future perspective of OR developments in this field of application Moreover, Borodin et al (2016) provided a state of the art OR use in agriculture under uncertainty while Paam et al (2016) looked in to optimization of agri-fresh food supply chains, with a focus on loss minimization in the fruits and vegetables supply chains Lastly, in terms of food waste, Raak et al (2017) pointed out causes of processing and product-related food waste, especially new insights from expert 142 | ICJED2017 interviews, whereas Balaji and Arshinder (2016) identified 16 causes of food wastage in the Indian fruits and vegetables supply chain In regards to supply chain network design, Beamon (1998) reviewed the literature in the area of multi-stage supply chain design and analysis with a view to developing a research agenda that may serve as a basis for future supply chain research Shen (2007) reviewed recent developments in the area of integrated supply chain design, in which the decision maker needs to take into consideration inventory costs and distribution costs when the number and locations of the facilities are determined Farahani et al (2014) covered the field of supply chain network design (SCND), particularly in competitive environments, throughout 200 references which categorized different SCND problems and the potential gaps as the future research areas Besides, it proposes a general framework for modelling the competitive SCND problems Eskandarpour et al (2015) reviewed 87 papers to address at least two dimensions of sustainable development and give a special focus on Life-Cycle Assessment (LCA) based models The articles included in Table (Appendix) are obtained from the journals listed in Table One group of three journals represents 45% of all, including European Journal of Operational Research, International Journal of Production Economics, and Omega which account for 20%, 15%, 10% respectively Eleven journals consist of the rest representing highly statistical-focused papers Ho Thanh Phong et al | 143 Review of Fresh produce supply chain models 4.1 The structured taxonomy This paper follows the proposed classification of the literature used in Ahumada and Villalobos (2009); Mula et al (2010); Soto-Silva et al (2016) Figure 2: Proposed taxonomy criteria 4.2 Decision levels This review is based on the published paper of Ahumada and Villalobos (2009b) related to three levels of the decision strategy directly: (1) The strategic level deals with decisions regarding product design, what to make internally and what to outsource, supplier selection, and strategic partnering as well as well as decisions on the number, location, and capacity of warehouses and manufacturing plants and the flows of material through the logistics network; (2) The tactical level includes decisions of harvest planning, scheduling of crops, selection of labour, capacity, etc; (3) The operational level refers to production scheduling activities on an hour-to-hour basis, lead time quotations, storage, routing, and truck loading (Simchi et al., 2008) In fact, 144 | ICJED2017 this classification is always unclear when dealing with mixture of activities between strategic and tactical decisions or between tactical and operational levels (Shukla and Jharkharia, 2013; Farahani et al., 2014) Table (Appendix) depicts decision levels of 62 reviewed papers Out of these, Twenty-six articles relates to strategic issues, thirty-eight deals with tactical levels and twenty at the operational decisions Whereas fourty papers have some reference to one specific decision level, twenty-four papers simultaneously consider aspects related to two issues in the form of strategic-tactical or tactical-operational stages However, there are several papers amongst of 26 papers at the strategy level, which mention designing and managing supply chains while most of them consider the optimal models on business aspects To illustrate our synthesis, we adopt Broekmeulen (1998) approach toward formulating a tactical decision model for managing the operations of a distribution center Four key decisions specify the amount of storage space needed in each zone within a storage facility, the storage conditions in each zone, the assignment of each product to a zone for storage, and the storage policy 4.3 Modeling approach Modeling approach is driven by the nature of the inputs and the objective of the study A variety of mathematical approaches are used to model and solve decision problems related to the reviewed fruit and vegetable supply chain Ho Thanh Phong et al | 145 Besides, an array of decision support models is also mentioned in this paper with the goal of providing perspectives to models like LCA, sampling method, Stackelberg game, Fuzzy Logic, reference model, Triple Helix Model, and so forth Table (Appendix) shows that a wide variety of methodologies are applied To illustrate this further, these methodologies include the linear programing-based modelling approach (14 papers), multi-objective linear programming (6 papers), nonlinear programming (2 papers), simulation models (2 papers), dynamic programming (3 papers), and HEU and HYB (4 papers) The reviewed articles in the current study also present the inclusion of two different methods, achieved by MILP and HEU (5 papers), SM and DP, ILP and stochastic programming, NIP and HEU, HEU and SM, LCA and s-LCA, information discovery and a well-structured contract allocation methodology, innovative strategies and an Expert System (ES) using Fuzzy Logic, an algebraic modelling language and an optimization software of mathematical programming, the optimal solution of the pricing and lot-sizing problem Likewise, the main approaches appear to be Fuzzy multi-objective programming model, Life Cycle Assessment Analysis, Sampling method, Stackelberg game, a novel multi-objective hybrid approach called MHPV, Optimal policies; Cross-docking centre, the Triple Helix Model, Target Minimization of Total Absolute Deviation (MOTAD) model, a planning methodology, a two-stage stochastic program, Logistics service performance, a reference model To be more precise, Soto-Silva et al (2017) are the first authors to use Optimization models and a bi-objective method in their paper 4.4 Published papers The distribution of 62 revised papers has been depicted in the table below 146 | ICJED2017 The Figure describes the distribution of journals having 62 selected papers It is noted that five journals account for 56.45% of the total publications, including International Journal of Production Economics (20.97%), European Journal of Operational Research (9.68%), Computers and Electronics in Agriculture (8.06%), Agricultural Systems (8.06%), Journal of Food Engineering (4.84%), and Journal of the Operational Research Society (4.84%) 4.4.1 Novelty seeking The novelty associated with each of the reviewed papers is presented briefly in Table below 172 | ICJED2017 Author Country Case study/ Real case/ None Crops Cholette (2007) US Real case Wine Ferrer et al (2007) Chile Real case Grape Ortmann et al (2006) South Africa Real case Fruit Caixeta-Filho (2006) Brazil Real case Orange Blanco et al (2005) Argentina Real case Apple - Pear Leven and Segerstedt (2004) US Real case Frozen Berries Vitoriano et al (2003) Spain Real case Grape Hester and Cacho (2003) Australia Real case Apple Gigler et al (2002) Netherlands Case study Banana Caixeta-Filho et al (2002) Brazil Real case Lily flower Munhoz and Morabito (2001) Brazil Real case Orange-juice Broekmeulen (1998) Netherlands Case study Fruits Maia et al (1997) Brazil Real case Banana Starbird (1988) US Real case Apples Willis and Hanlon (1976) US Real case Fruit Ho Thanh Phong et al | 173 Table Performance Indicators adapted from Aramyan et al., 2006 Performance measurement Efficiency (E) Cost - Production cost - Distribution cost - Transaction cost Profit Return on investment Inventory - Warehousing - Capital - Storage - Insurance Flexibility (F) Customer satisfaction - Pre-transaction - Transaction - Post-transaction Volume flexibility Delivery flexibility Number of - Backorders - Lost sales - Late orders Responsiveness (R) Fill rate Product lateness Customer response time Lead-time Shipping errors Food quality (Q) Product quality - Sensory properties and shelf life - Product safety and health - Product reliability and convenience Process quality - Production system - Environmental aspects - Marketing Table 10 Measured performance of the reviewed papers Author Performance Measurements used Soto-Silva et al (2017) An average reduction of 8% in total cost is achieved Banasik et al (2017) The cost of improving environmental sustainability in mushroom chain is estimated Closed loops in a mushroom production can yield great sustainability gains Garofalo et al (2017) Composting of waste and compost as fertilizer improve the environmental performance of the supply-chain Mohammed and Wang (2017) Minimize the total cost Keizer et al (2017) Changing product quality decay rates affects the level of postponement Catalá et al (2016) Cold storage infrastructure plays a key role in the performance of the system Tecco et al (2016) The innovation strategy produces environmental and socioeconomic trade-off Lamsal et al (2016) The movement of the crop from farms to processing plants 174 | ICJED2017 Author Performance Measurements used satisfying two conditions: (1) there are multiple, independent producers (farmers), and (2) no significant on-farm storage exists Mirmajlesi and Shafaei (2016) Effectiveness of model: the profit is maximized Suryaningrat et al (2015) The details of flow of material, financial and information are identified in this research and added value of selected products of cassava Etemadnia et al (2015) There is always a trade-off between transportation costs and fixed costs of building hub capacity Mason and Villalobos (2015) The issue of coordinating production of perishable specialty crops under decentralized control and incomplete information Farmers can be coordinated despite information asymmetry and competitive behaviour Zhang et al (2015) A revenue sharing and cooperative investment contract coordinates the supply chain Govindan et al (2014) Reduces costs caused by carbon footprint and greenhouse gas emissions throughout the network Cai and Zhou (2014) The optimal start times and processing sequence Lambert et al (2014) An increase in production yield and fruit quality in the orchard Munhoz and Morabito (2014) The blending process of different types of juices to match product specifications, for example, using orange acidity to calculate the ratio specification Agustina et al (2014) Food distribution efficiency, and in supporting food distributors in providing better delivery service for time-sensitive items at lowest logistics costs Qin et al (2014) The deterioration rate of quality and physical quantity is taken to be time proportional Soysal et al (2014) Change in fuel efficiency of trucks results in shifts of the Pareto frontier with increase in logistics cost and emissions Velychko (2014) The minimization of costs of cooperative services and maximization of profits for members of the cooperation has been processed Manzini and Accorsi (2013) Control of quality (1), safety (2), sustainability (3) and logistics efficiency (4) of food products and processes along the whole FSC “from farm to fork” Ho Thanh Phong et al | 175 Author Performance Measurements used Tsao (2013) Maximize the total profit to address the integrated facility location, inventory allocation, and freshness-keeping effort problems Ampatzidis et al (2013) System performance under different numbers of bin carriers (or pickers) and loading stations is evaluated towards reducing costs and maintaining product quality Teimoury et al ( 2013) Key conclusions are reached on how to conduct the multiobjective analysis with the aim of import quota policy making and to be price mean, price variation and mark-up Duan and Liao (2013) It develops centralized and decentralized models for a SC of highly perishable Catalá et al (2013) The model could be used either by governmental agencies to advise private sectors and to develop strategic economic policies or by companies to optimize the business profit Perdana and Kusnandar (2012) Multi-stakeholders interaction opens the opportunity for FFV farmers to get involved in supply chains of export markets Institutional innovation has a role as a risk reducer that provides supporting services to farmers in order to meet export market demand Haddad and Shahwan (2012) Crops behaviour under risk condition in Jordan Valley differs according to the risk associated with production process, both for season and amount of water available for irrigation where the impact of water reduction is obvious in winter (spring) farming season Amorim et al (2012) The economic benefits derived from using an integrated approach are much dependent on the freshness level of products delivered Yu et al (2012) The deteriorating rate of the product may increase the total cost by more than 40% compared to the zero-deteriorating rate, while the deteriorating raw material has less impact on the total cost Tan and Çưmden (2012) The proposed methodology matches random supply and random demand in a very effective way and improves the expected profit substantially compared to the planning approaches where the uncertainties are not taken into consideration Banaeian et al (2012) Data envelopment analysis is a pivotal tool for analyzing 176 | ICJED2017 Author Performance Measurements used productive efficiency of agricultural units Ahumada et al (2012) For the same level of risk experimented by the producer, planning based on the proposed stochastic models rendered increases expected profit to over 50% At the same time when risk aversion policies are implemented, the expected losses decreased significantly over those recommended by deterministic planning models Ahumada and Villalobos (2011a) Significant savings can be obtained by managing the trade-off of the freshness at the delivery of the produce with the added labour and transportation cost at the grower's side Moreover, dynamic, information-based management practices might be preferred over traditional practices based in fixed labour allocation and distribution practices Rong et al (2011) Design and operate food distribution systems, using both food quality and cost criteria Ahumada and Villalobos (2011b) Maximize the revenues of a producer that has some control over the logistics decisions associated with the distribution of the crop van der Merwe et al (2011) Selects the best possible dates to harvest the respective vineyard blocks in order to preserve grape quality Bohle et al (2010) The actual productivity that can be achieved when harvesting Hsiao et al (2010) Outsourcing has no direct impact on service performance (delivery reliability, flexibility and lead-time) in any of the four levels However, the performance when outsourcing level activities increases with an increasing degree of demand complexity Furthermore, chilled foods have higher service performance than non-chilled foods Verdouw et al (2010) The developed reference model bridges the gap between supply chain design and information systems engineering by providing a consistent set of process models, aimed at the growing importance of health in consumption of European fruit demand Arnaout and Maatouk (2010) Significantly reduce the harvesting costs in the vineyard and considerably outperforms Branch and Bound algorithm especially for large problems Van Der Vorst et al (2009) Food quality change models and sustainability indicators in discrete event simulation models Blackburn and Scudder The appropriate model to minimize lost value in the supply chain Ho Thanh Phong et al | 177 Author Performance Measurements used (2009) is a hybrid of a responsive model from post-harvest to cooling, followed by an efficient model in the remainder of the chain Dabbene et al (2008) The performance of the supply chain, expressed in terms of both logistics costs and final product quality to assure the feasibility of the proposed optimal solutions Bai et al (2008) These greedy heuristics are much more efficient and provide competitive results Cittadini et al (2008) Value of cumulative financial result and the cumulative farm labour are conflicting to a very limited extent Timing and feasibility of implementing certain combinations of production technologies are affected by resource endowments and initial conditions, but these factors not influence land use selection in the long term Cholette (2007) The program introduces at least one winery and a corresponding distributor who has formed a profitable, long-term partnership Ferrer et al (2007) Support grape harvest planning in a large vineyard in harvest scheduling, labour allocation, and routing decisions Ortmann et al (2006) These models are solved for two extreme seasonal export scenarios and the solutions show that no export infrastructure expansion is required in the near future Caixeta-Filho (2006) The estimated potential benefits ($) from using the proposed model reached figures over 6% Blanco et al (2005) Estimate the fruit processing capacity of the facility in order to establish future sales policies Leven and Segerstedt (2004) Require more storage facilities and it is also recommended that the location should be based on load-distance analysis Vitoriano et al (2003) The first model splits the time into discrete units spread throughout the planning horizon; it is presented in connection with flexible manufacturing The second model keeps a continuous time horizon; a scheduling model is used for which a family of incompatibility conditions is introduced to avoid a certain type of simultaneous usage of resources Hester and Cacho (2003) Maximise net present value of one orchard system by selecting optimal thinning strategies over a 15-year period Gigler et al (2002) The construction of optimal routes defining which actors in the chain should perform which actions at which process conditions 178 | ICJED2017 Author Performance Measurements used at minimum integral costs Caixeta-Filho et al (2002) Between 1999 and 2000, company revenue grew 26%, sales increased 14.8% for pots of lilies and 29.3% for bunches of lilies, costs fell from 87.9 to 84.7% of sales, income from operations increased 60%, return on owner's equity went from 15.1 to 22.5%, and best quality cut lilies jumped from 11 to 61% of the quantities sold The system also suggested changes in the product mix Munhoz and Morabito (2001) The importance of blending decisions for the logistic analysis of the orange juice distribution, besides transportation and storage decisions 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