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Page 1 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Retail Supply Chain Management 3. Cold Chain for Grocery.

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Presentation on theme: "Page 1 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Retail Supply Chain Management 3. Cold Chain for Grocery."— Presentation transcript:

1 page 1 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Retail Supply Chain Management 3. Cold Chain for Grocery Items

2 page 2 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Objectives  Understand the importance of cold chain to retailers  Learn the development and current status of cold chain in China  Identify the major problems and opportunities in the development of cold chain in China

3 page 3 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Cold Chain in China 1  Cold chain is a temperature-controlled supply chain.  Uninterrupted series of storage and distribution activities which maintain a given temperature range.  It includes transportation, load and unload, processing, storage, and selling 1 : Information source: China Franchising & Chain Store Association (2009), Investigation Report on Supermarket Chains’ Fresh Food Supply Chain.

4 page 4 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Why Cold Chain?  Some products needs cold or frozen storage  Frozen food, milk, and tofu etc.  Extend the shelf life of fresh food  Prevent loss and improve food safety  20%-30% food loss occurs in transportation or storage

5 page 5 Supply Chain Management Module David F. Miller Center for Retailing Education and Research The Relationship between Temperature and Shelf Life ProductTransportati on Shelf Life (at 1 o C) Shelf Life (at 3 o C) Shelf Life (at 5 o C) Meat2.5 days7 days5.5 days4.5 days Sea Food2.5 days5 days3 days1 days Strawberry2.5 days10 days7 days3 days Salad2.5 days12.5 days10.5 days7.5 days

6 page 6 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Why Cold Chain?  Increase sales and profit  Jingkelong supermarket built up fresh food distribution center in  The sales and gross profit of vegetable and fruits increased 50% and 5% respectively  Gross profit of pork increased 4-6%

7 page 7 Supply Chain Management Module David F. Miller Center for Retailing Education and Research

8 page 8 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Cold Chain in China  Overview  Integrated cold chain is rare in China  Cold chain breaks when unloading products for mins  Food needs cold or frozen storage  90% retailers use cold chain.  Cold chain is broken in some links.  Fresh agricultural products  Mostly transported and sold in normal temperature.  The rotting rate is 35% for fresh food; 10%-15 % for meat and fish  5% in developed country; 3% in the U.S

9 page 9 Supply Chain Management Module David F. Miller Center for Retailing Education and Research The Sources of Food Loss

10 page 10 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Treatment for Food Loss

11 page 11 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Centralized vs. Store Purchasing

12 page 12 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Sources of Fresh Food

13 page 13 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Temperature Check

14 page 14 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Distribution Centers of Supermarkets

15 page 15 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Distribution Center  Fresh Food Distribution Center  Relatively small  <5,000 m 2, 75%  < 500 SKUs, 68%  Short of high quality refrigerated warehouse  Lack of functions  No processing, 57%

16 page 16 Supply Chain Management Module David F. Miller Center for Retailing Education and Research The Size of Distribution Centers

17 page 17 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Transportation  Mainly use suppliers or third party for distribution.  0.3% refrigerated trucks  15% fresh food was transported using refrigerated trucks in China; 90% in the developed countries  80%-90% fruits, vegetables, meats and aquatic products are transported using normal trucks.

18 page 18 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Transportation (Cont.)  29.67% retailers own refrigerated trucks  36.26% use suppliers’ refrigerated trucks  13.19% use the third party refrigerated trucks rented by suppliers.  5.34% use the third party refrigerated trucks rented by supermarket.

19 page 19 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Business Model for Selling Vegetables and Fruits

20 page 20 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Consumers’ Preference regarding Different Retail Formats

21 page 21 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Sales of Fresh Food/Total Sales

22 page 22 Supply Chain Management Module David F. Miller Center for Retailing Education and Research Other Issues about Cold Chain in China  No industry standard and regulation  Management problems  Low efficient in loading and unloading

23 page 23 Supply Chain Management Module David F. Miller Center for Retailing Education and Research References  Zheng, Zhigao and Xueling Yi (2006), “A Comparative Study of Sino-Foreign China Retail Inustry”, Journal of Guangdong Institute of Business Administration, 21(4),  China Supplier Research Center, 2009, A survey Report on the Survival Situation of Suppliers in China. Chinese Retail Research, 1(2),


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