The U.S. agriculture sector includes a number of farm-related industries, of which food service and food manufacturing are the largest. Food accounts for 12.6% of American households' expenditures and food manufacturing accounts for 14% of all U.S. manufacturing employees. In 2014, the U.S. food and beverage manufacturing sector employed about 1.5 million people, or just over 1% of all U.S. nonfarm employment. Over 31,000 food and beverage manufacturing plants located throughout the US are engaged in transforming raw agricultural materials into products for intermediate or final consumption. The agro-food supply chain can be relatively simple or extensive depending on the specific food item, the method of production, location, and economics. The path through the supply chain will vary depending on the specific product or commodity.Within the agro-food industries, the linkage between the production and logistics systems of the stakeholders is fragmented. Even within individual companies, vertical and internal integration is often poorly managed, and therefore, economically inefficient and not sustainable. The discipline of supply chain management (SCM) attempts to optimize supply chains using innovative technology and management techniques. However, limitations in technology can restrict the effectiveness of SCM approaches. For example, a classical management game developed at the Massachusetts Sloan School of Management provides insight into the consequences of managerial actions taken independently in the successive stages of a supply chain, often referred to as the Forrester or "bullwhip effect." This is one example of where SCM could benefit from technology (e.g. better and faster communication between the nodes, real time inventory, faster manufacturing, improved distribution, etc). Improved technology in any of these areas would reduce the "bullwhip effect" thereby reducing or eliminating stock-out conditions and excess inventory. Because of limited shelf life for food and agricultural products, excess inventory can result in increased costs over those of a non-food manufacturing plant. With expired food, the manufacturing and distribution costs cannot be recovered and there may be additional disposal costs.The current trends in the food value chain are characterized by two socioeconomic features: 1. A greater concentration of farms, food industries, and wholesalers into smaller number with large sizes and 2. ever-increasing consumer demand for food quality and safety (food that is fresh palatable, nutritious and safe).The goal of this project is to address the technical limitations in SCM for the agro-food industry within the context of the socioeconomic trends through the development of new technologies that allow for increased efficiency, decreased costs, and enhanced information flow throughout the supply chain.
