Consolidated cold chain design for fresh fruit supply chains in developing countries: A simulation study
Creators: name: Kanchanasuwan, Sarunyoo
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350903
subject: Logistics
classificationCode: 460207
subject: Modelling and simulation
classificationCode: 490108
subject: Operations research

description: Fresh fruit has become a major consumption item for city dwellers and the demand has continuously increased in recent years. A significant proportion of fresh fruit globally is grown by developing countries in tropical regions, especially in Asia, and exported to other countries. This has become an important source of economic income for many developing countries, such as Thailand. Nevertheless, the fresh fruit industry in developing countries is experiencing critical issues, including short shelf life, high wastage, poor quality, and food safety, due to operations in high-temperature environment. Studies reveal that many developed countries have successfully solved these problems by using a cold supply chain with tight temperature control throughout the entire supply chain process. Cold supply chain adoption usually requires heavy investment in infrastructure and technology, as well as technical knowledge training for operational staff to ensure temperature compliance along the supply chain. In developing countries where capital resources are limited, this so-called high-tech high-cost approach has proven to be an obstacle to widespread cold supply chain adoption. As such, the design adopted by developed countries to implement a fresh fruit cold supply chain might not be directly applicable to developing countries, due to the lack of cold chain infrastructure and equipment and the low level of technical know-how. To address this issue, this study presents a proposal for adopting a low-tech low-cost approach by focusing more on available resources, such as cheap labour, and flexibility in work practices such as work shifts, than on infrastructure and technology in designing cold chain systems for developing countries. It is considered that this option would be more viable for developing countries with limited capital resources and know-how, and would thus enable widespread cold supply chain adoption. It could also play a vital role in the transition of cold supply chain implementation from a nascent stage to a mature development, whereby the high-tech high-cost approach of the developed countries would more readily be adopted. This study incorporates insights from multiple theoretical perspectives, including the theory of constraint (TOC) and network theory (NT), to underpin the low-tech low-cost approach proposed. Two alternative low-tech cold supply chain designs are investigated and developed based upon a comprehensive literature review of the state of the art in the field. Owing to the fact that fresh fruit cold chain adoption is still relatively rare in developing countries, this study explores different approaches to low-tech cold supply chain design for fresh fruits using simulation as a tool. A traditional fresh mango supply chain in Thailand, which involves five farms, three processors, one transporter and one middleman company, was used as a case study to facilitate the exploration. Discrete-event simulation was employed to evaluate the changes in performance of the typical mango supply chain before and after the adoption of the cold supply chain design. Key performance indicators, such as lead time, total operating cost, shelf life, wastage, and throughput, of the current supply chain and the different cold chain designs were compared. The findings reveal that cold supply chain design using the low-tech low-cost approach performs better in all aspects than the other design relying solely on infrastructure investment. Scenario tests also show that such a design is more robust than the other infrastructure-oriented design when facing fluctuations in demand and increases in labour cost in the long run. By proposing an innovative approach to cold chain design for developing countries and exploring its feasibility using computer simiultaion, this study makes a significant contribution to practice by showing the potential benefits of a low-tech low-cost approach to cold chain adoption in developing countries, thereby expeditng its implementation. It also contributes to knowledge by creating a new scope for research in cold chain design leveraging labour resource, change in work practices, and collaboration instead of merely infrastructure and technology.