The stresses on the food value chain are pervasive, profound and persistent. A smarter approach to managing our food value chain is needed. While technology alone cannot solve the crisis, we can make great strides by leveraging the collective and synergistic power of intelligence, instrumentation and interconnectivity. Read this whitepaper to learn about the capabilities and attributes necessary for a smarter food value chain.

1. IBM Global Business Services
White Paper
An appetite for change
How an interconnected approach to food supply management can help food
growers, producers, sellers and consumers — and planet Earth
Guy Blissett, IBM Institute for Business Value, Consumer Products Lead

2. Executive summary
In many ways today’s food supply chain is a marvel—a highly fragmented and com-
plex, and ever-evolving ecosystem that delivers an astounding volume and quality of
product—sufficient food in all its various forms to feed roughly 6 billion of the Earth’s
6.8 billion inhabitants. However, in this same value chain where fresh produce is
shipped around the globe hours after being picked, globally linked financial mar-
kets dynamically set prices for agricultural commodities, and crops are increasingly
re-engineered at the genetic level, major stresses are appearing. At a planetary level
concerns are rising about food security and sustainability; How can we feed the ad-
ditional 2 billion people that will inhabit the planet by 2050, while at a participant level
concerns linger and grow about recalls contaminations, waste, spoilage and distribu-
tion inefficiencies that create shortages and embed incremental costs?
Planetary concerns center on the increased demands that 2 billion new inhabitants
will place on the food supply, and changes in consumption that accompany increas-
es in income. Based on existing trends we will likely need to increase the food supply
70-100 percent by 2050. Exacerbating these concerns are newer issues such as
climate change and drought; high and volatile energy prices; plateauing crop yields;
arable land limitations; and diversion of crops for biofuels. As a consequence, we are
seeing significant price volatility, shortages, government interventions and a growing
realization that the current model is not sustainable. Indeed, agriculture is already the
largest human use of water, comprising an estimated 69 percent of total.
At a participant level many of the issues are not new, just persistent. Consumers
continue to crave additional information about product source and contents, while
harboring lingering safety concerns. Retailers continue to wrestle with stubborn lev-
els of out of stocks and razor-thin low margins. Consumer products (CP) companies
continue to struggle with accurately sensing end demand, and synchronizing their
plans and forecasts with retailers. Farmers and growers struggle with increasingly
pernicious weather, rising input costs, uncertain demand and volatile market prices.
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3. Other persistent problems—such as In this whitepaper, we will summarize Structure of the current food
food spoilage and waste, product the current structure of the food value value chain
contaminations and recalls; and often chain, assess its current state, and The food value chain — comprising liter-
convoluted farm subsidies and trade identify the capabilities and attributes ally tens of thousands of participants of
policies—further complicate an already necessary for a smarter food value chain. varying size and sophistication spread
challenging landscape. across the globe — is a daunting enter-
prise to summarize. For our purposes, we
Clearly, a smarter approach to manag- have grouped and summarized partici-
ing our food value chain is needed. And pants into the following value chain (see
while technology alone cannot solve the Figure A). While this figure represents a
crisis, its application to create a value gross simplification of the web of partici-
chain that is increasingly instrumented, pants and their interactions it does enable
interconnected and intelligent is essential. a structured assessment of the existing
and emerging stresses, and provides a
framework for considering solutions.
Figure A. The Food Value Chain...a highly simplified representation
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4. In addition to its complexity, the food It is notable that some organizations act Commodity and specialty products provid-
value chain can also be viewed as a as highly focused specialists developing ers / primary producers
study in contrasts. At each step the unique capabilities and expertise in a This complex and fragmented group
participants and their activities vary specific competency (e.g., raising broiler and can be clustered around the follow-
across the spectrum in terms of dimen- chickens in their thousands), while ing competencies:
sions such as scale, breadth, scope, others operate across multiple com-
• Agriculture: Growers of legumes,
sophistication and integration (see petencies reaping benefits of vertical
pulses, wheat, rice, fruits, vegetables,
figure B). integration (e.g., global beverage and
corn, and other crops. They range
snack company integrated all the way
in size from the small family farms to
upstream to potato farmers and sup-
titans such as Archer Daniels Midland
pliers of sugar alternatives). Assorted
(ADM), Bunge, and Cargill.
cooperatives, trade associations, and
market organizations also play a role
• Beef, chicken and pork farmers: in-
aggregating product, collecting informa-
cluding cow/calf operations, stocker
tion, representing industry interests and
and backgrounding operations,
sharing knowledge.
feedlots, ranchers, and Concentrated
Animal Feeding Operations (CAFO).
Figure B. Food Value Chain particpants and their activities...a study in contrasts
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5. • Dairy farms and cooperatives: pro- Brokers, distributors, exporters, Food and Foodservice Wholesale distributors
ducing cheese, milk and milk protein importers, traders These entities bridge the gap between
and other derivative products. This portion of the supply chain en- CP companies and retailers, enabling
compasses a massively diverse group CP companies to efficiently sell and
• Fisherman and fish farms: that catch of large and small players that typically distribute products to diverse and
and/or farm fish, shrimp and shellfish add little to no value to the physical numerous retail outlets, and delivering
product itself, in fact in many cases they incremental services to the customers .
Component converters, processors, abat-
never even “touch” the physical prod- In many markets multiple tiers of whole-
toirs, packers and repackers
uct. Their role is to facilitate movement, saler and distributor may exist between
While operations at this step are
aggregation and trade. In Japan, mega- the primary manufacturer (i.e., the CP
sometimes highly automated and tightly
players such as Itochu, Mitsubishi and companies) and the retailer or restaurant.
integrated with those of the farmers
Mitsui are active in each of these areas.
and growers, they are just as likely to
Food retailers and restaurants
be performed manually and dispersed Consumer products companies Food retailers used to consist almost
across a web of small players. Ranging from global players that own exclusively of traditional grocery stores,
and manage portfolios of familiar prod- kiosks, and restaurants but now food
a) Converters of raw / bulk crops,
ucts and brands (e.g., Danone, Unilever, is sold through every type of outlet
livestock and other foods into com-
Nestlé, Arla, Heinz, and Kraft), to local imaginable, including online. Examples
ponents —slaughtering, deboning,
and regional players focused on a single range from global powerhouses such
peeling, cleaning, sorting, slicing,
brand or category (e.g., Kikkoman, as Carrefour, Trust-Mart, Tesco, Panta-
freezing, and otherwise storing,
Weetabix, Utz, and Bush Brothers) to loon and Walmart to individually owned,
the increasingly important private label single store locations. Restaurants also
b) Processors that change the com-
manufacturers who make products range from global fast food chains such
position of the product through
for retailers under their own labels. As as McDonalds, Jollibee, Taco Bell and
cooking, mixing, grinding, and/
competition increases, critical inputs KFC to single unit, individually owned
or other chemical, mechanical,
become scarce and/or expensive, and restaurants. These organizations run
thermal operations
the geographic scope of operations the gamut in sales volume and degree
Secondary and tertiary suppliers expands, CP companies are playing an of technological sophistication.
Chemical, pharmaceutical, industrial increasingly active role upstream assist-
and specialty companies that manu- ing and integrating with suppliers and
facture and market the antibiotics, pes- connecting with end consumers to un-
ticides, fertilizers, seeds, and genetic derstand their needs and preferences.
material increasingly a component of to-
day’s food value chain. Examples include
Monsanto, BASF, DSM, Potash Corp.
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6. Food consumers Given the complexity of the food value The global trade in food, myriad regula-
At the end of 2008 there were ap- chain effective collaboration on issues tions and inspection standards, and
proximately 6.8 billion food consumers and stresses is essential. Progress has the complexity of the processed food
on the planet, and by 2050, two billion been made toward developing and we eat are all complicating efforts to
more will join them. Although consum- adopting standards that facilitate collab- improve food safety. In the U.S. for
ers the world over crave safe, healthy, oration, however significant challenges example imports account for nearly 60
abundant food choices at relatively remain especially in the upstream end percent of the fruits and vegetables
low cost, they are extremely difficult of the chain. Globalization, specializa- consumed, and 75 percent of the
to please and characterize. They want tion and fragmentation of the food value seafood. However, only one percent of
more information about the source and chain are exacerbating longstanding those foods are inspected before they
contents of products and are connect- issues as products get handled by more enter the country.
ed, concerned and empowered to get entities spread across a wider geography.
that information and share it. Food safety issues present problems for
A sample of cross chain and individual more than just consumers. Food grow-
Stresses on the current system participant level stresses follows: ers and consumer product manufac-
The current food value chain does many turers are facing a crisis of confidence
things very well, from producing pro- Contaminations and recalls from their customers while they struggle
digious volumes of food at a relatively This issue took center stage in 2008 to institute appropriate safety measures
low direct-end price to the consumer, to and 2009 with a series of highly in the face of rising costs. Government
innovating around processes, products, publicized recalls around the globe of agencies that regulate food safety are
pricing and packaging. However numer- products as diverse as spinach, milk, also increasingly under fire as they
ous factors are stressing the chain at peanuts, ground beef, and jalapenos try to answer the public’s demand
both the participant and planetary level. sickened thousands. Awareness of for greater accountability with limited
the food safety issue and its cross staff and resources.
Participant Stresses channel impact has been growing and
Participant stresses — typically business consumers the world over are increas- Agricultural entities
related — impact or occur at the partici- ingly concerned about the safety of the Agricultural entities face an onslaught
pant level, rather than a planetary level. food they eat and farmers feeling the of unique stresses. Competing in the
Some business stresses — such as financial impact of recalls. A sample of increasingly competitive global market,
contaminations and recalls — cut across contaminations and recalls since 2005 these organizations must often con-
the entire chain and even overlap with is shown in figure C. tend with extreme price volatility, due in
planetary concerns. Others — such part to biofuel production fluctuations;
as high failure rates for new product widespread tariffs and import quotas;
introductions — are more localized in and sometimes perverse production
their impact. incentives such as those currently in
place for European milk and sugar, and
U.S. corn.
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7. Figure C. Product contaminations and recalls...a major stress on the Value Chain
Additionally, costs are on the rise in The future will likely bring more, not Many CP companies are already
many areas of the industry. High energy fewer pressures for these organizations, responding to these changes but rec-
costs are forcing production costs including: ognize they have yet to find workable,
up because oil, natural gas and their comprehensive solutions. Connec-
• Rising demand for sustainable practices
derivatives are essential components tions with consumers are tenuous and
to modern agriculture, both to fuel • Growing concern about water usage, distrust of companies, products and
machinery and as ingredients in fertil- waste and runoff brands remains high. At the same time
izers and pesticides. Additionally, many • Increased need for agility due to acceptance of private label products is
agricultural entities are under increas- climate changes growing.
ing pressure to pay a premium for the
water they use to grow crops or raise Consumer Products companies Additionally, pressure is mounting for
livestock. Europe already has such The primary business of CP companies CP companies to reliably measure the
a water pricing system in place and is to delight customers and consumers. impact of their operations and those
other agricultural producers are bracing Today they struggle with an increas- of their suppliers. Walmart recently
themselves for this potentially devastat- ingly concentrated and demanding announced creation of a sustainability
ing cost increase. customer base who are just as likely to index that may soon set a benchmark
be competitors. Another stress comes for the industry. Walmart leaders say
in the form of a rapidly growing number they are creating the index due to the
of increasingly affluent consumers, who planet’s increasing global population,
are themselves concerned, connected decreasing natural resources and in
and empowered to gather and share in- response to consumer demand.
formation. IBM calls this dynamic group
Omni Consumers.
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8. Lastly, CP companies are caught be- in India, who hand deliver 170,000 Planetary concerns
tween a financial rock and a hard place homemade meals to office workers At the heart of planetary concerns are
with consumers unwilling to pay more each day. As previously mentioned, the additional two billion people ex-
for their food and rising input costs. retailers are under increased pressure pected to inhabit the planet by 2050,
Indeed cocoa, tea and other commodi- to be more responsive to notoriously up from 6.8 Billion at the end of 2008.
ties have hit record highs within the fickle customer demands. In a dif- These consumers are increasingly
past 12-18 months. ficult economy and an oversaturated likely to live in a city, and as their in-
marketplace, attempting to increase come rises their consumption of meat
Wholesalers/distributors customer responsiveness and remain and dairy products will also likely rise.
Wholesalers and distributors are under profitable in the face of intense com- These factors will place tremendous
pressure from both upstream and petition can be a daunting task. pressures on a food value chain al-
downstream value chain partners to ready straining to feed the world.
evolve their role and offer enhanced ser- Consumers
vices. As grocers and restaurant chains A recent, steady, stream of food The global food value chain is a study
handle more of their own distribution recalls and safety warnings have in contradictions. Large segments
and turn to increasingly capable mega- left many consumers fearful of the of the population are subjected to
distributors and third-party logistics food they consume and distrustful hunger and scarcity alongside popu-
providers, food distributors are under of companies, products and brands. lations enjoying enormous excess.
attack like never before. They’re also Consumers are increasingly vocal Tragically, at the same time, vast
being squeezed by unprecedented cost in their demands for safer food and amounts of food is spoiled or wasted
pressures, product proliferation and dis- increased transparency about the at every stage of the production
tribution complexity. In many emerging origin and contents of food. Con- process; some experts estimate up to
markets the multiple tiers of distributor sumer demands are also growing for 50 percent may be lost between farm
further complicate the coordination functional foods that deliver added and dinner table. At the same time
and collaboration so necessary for health and/or nutritional benefits. geographic regions are increasingly
efficient operations. To that end, many consumer prod- subjected to alternating periods of
ucts manufacturers are focusing on excessive rainfall, and then drought.
Retailers and restaurants successfully launching new items to While the local food movement is
As the number of channels through satisfy the increased preference of gaining increased traction, the major-
which food is sold has proliferated so consumers for health and wellness. ity of food is produced far from where
have the challenges. Retailers now In the last five years, there has been it is ultimately consumed, being
prepare foods, own brands and sell 38 percent increase in marketing food shipped thousands of miles before ar-
meals. Prepared food is sold through and beverages as “better for you.” riving in your local store or restaurant.
gas stations, hardware stores, coffee Satisfying this concerned, connected
shops and kiosks. The proliferation and empowered consumer is an ever
of quick service restaurants (QSR) evolving stress on the value chain.
globally has exploded requirements
for food service and food is delivered
to your home, office or other location.
At the same time traditional channels
remain, such as the Dabbawallas
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9. Although for many consumers it may In the next few paragraphs we will focus Consumption
still be hard to appreciate the planetary in on a couple of the major planetary Exacerbating the impacts of population
implications of the food they eat. In- stressors on the global food value chain: growth are changing consumption pat-
creasingly the impact of the global food terns. In 2008 for the first time humans
Population
value chain is being measured, com- ate more farmed fish than wild fish, from
Although many experts believe that we
municated and appreciated. From the tilapia, to salmon, to cod. Other pat-
currently produce enough food to feed
land and water required to raise cattle terns are also changing. It is well docu-
the planet’s inhabitants, the world’s
or grow grain to the energy required to mented that as incomes rise, so does
population is growing. At the end of
create, transport and distribute food consumption of meat, fish and dairy.
2008, the world’s population reached
products and the amount of food that Between 1990 and 2005 China’s popu-
6.8 billion. By 2020, that number is ex-
is wasted or spoiled along the way vis- lation increased by approximately 161
pected to rise to nearly 8 billion and by
ibility to these costs is increasing. million (14 percent) and over the same
2050 the world’s population may well
time period per capita pork consump-
From a planetary perspective, the prob- exceed 9 billion. This unprecedented
tion nearly doubled, going from 19.7
lems are many and serious. How can population growth will likely drive deep
Kg to 37.9 Kg. The resulting increase
food growers and producers continue changes for every member of the global
in Chinese annual pork consumption of
to meet consumers’ demands efficiently food value chain who will be forced to
27.1 M tonnes represents roughly 360
amidst price volatility, shortages, climate do continually more with less.
million additional pigs, which require
changes and government interventions? 155,000 km2 of farmland, an area
Estimates are that the incremental
How can consumers ensure the food roughly the size of England and Wales.
population, coupled with changing
they eat is safe, ethically produced,
consumption (see next section) will
healthy and affordable? And how can With global demand for meat and
require a 70 percent increase in global
the players in the historically-siloed food poultry expected to rise 25 percent by
food production. The acreage needed
value chain integrate their thinking and 2015, many difficult questions loom.
for such an increase in production is
their processes with each other to cre- How can food producers meet the ris-
estimated at approximately 300 million
ate a smart, sustainable system that will ing demand? Are existing methods for
acres, an area roughly three times the
benefit the Earth and its inhabitants for fattening livestock sustainable, safe and
size of California.
many generations to come? ethical? How can consumers balance
their need for affordable food against
For a growing number of countries the
their desire for responsible products?
issue of food security is taking on a
Where will we find the necessary land?
whole new level of relevance and driv-
Finding answers for these and related
ing some major shifts in ownership of
questions is crucial for developing food
agricultural resources.
production processes that are optimal
for all members of the global food value
chain, and for planet Earth. Especially
since these foods require large land
areas, massive quantities of water,
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10. prodigious amounts of energy and Water-related issues will likely increase Kilocalorie / BTU
generate significant volumes of waste. in number and complexity as popula- Energy – and more specifically oil and
An additional concern is that overcon- tions rise, urban areas expand, and natural gas – is perhaps the second
sumption of these foods and changes climate change, drought and farming most important input to today’s food
in lifestyle are a contributor to the global practices affect crop yields and avail- value chain. Sixty years ago, food
obesity and health crisis. able arable land. In 1950 there was producers could create a calorie of food
1.2 acres of arable land per person, by with less than half a calorie of fossil
H20
2010 it is forecast to be just 0.52 acres. fuel. Today, a single calorie of modern
Until quite recently water — arguably the
One manifestation is a burgeoning supermarket food may require up to 10
single most important input to the food
global trade in virtual water, as countries calories of fossil fuel to produce. One
value chain — was a frequently under-
with limited water acquire overseas study conducted in 2000 estimated that
addressed issue in many food chain
farmland to bolster domestic food ten percent of the energy used annu-
discussions, its continued availability
security (e.g., Saudi Arabia, Abu Dhabi ally in the U.S. was consumed by the
at little to no cost considered a given.
and Qatar acquiring farmland in Sudan, food industry.
However there is a growing apprecia-
Egypt, Ukraine, and Pakistan).
tion that agriculture is the single largest
human use of water and that current Governments will likely play an increas-
policies and practices are very likely ingly active role in finding a balance
unsustainable. The underlying issues across industrial, agricultural, environ-
are myriad but include degradation of mental and municipal water uses.
aquifers, rivers and lakes to support
crop irrigation, risk of runoff from the
lagoons of animal waste created by
concentrated animal feeding operations
(CAFO), continued high levels of food
waste and spoilage in the supply chain,
deforestation that degrades water
retention as developing world farmers
seek new, productive acreage, and
consumer thirst for bottled water, soft
drinks and beer.
Figure D. Water...an essential component in food production and distribution
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11. Increased demand for biofuels such Let’s build a smarter food supply is rarely consumed where it is grown or
as ethanol has generated a unique While technology alone cannot deliver a raised, frequently exported to low cost
set of problems with the world’s food solution to the myriad stresses impact- markets for processing or packaging,
supply. Biofuels gained popularity as a ing the food value chain, its application then re-exported as a finished product
way to potentially wean countries from to create a smarter food value chain— for consumption. For example, cod
their reliance on oil and combat rising one that is increasingly instrumented, in- caught off the coasts of Norway may
fuel costs. But today, an estimated 25 terconnected and intelligent—is essential. be shipped to China for processing
percent of U.S. corn is now converted into filets, only to be shipped back to
to ethanol and goes to fuel vehicles Why will a smarter food value chain be Norway as a finished product for sale to
rather than people or animals. In the instrumented? Because it will use sens- consumers. This inflates logistics costs
meantime, high oil prices contribute to ing and tracing technologies, such as and increases waste due to spoilage,
higher food prices by raising the cost of satellites, radio frequency identification damage or contamination.
food-production-related items such as (RFID) and barcodes, heat and moisture
fertilizer and transportation. monitors, and global positioning sys- Finally, a smarter food value chain will
tems (GPS) to enhance overall supply be intelligent—capturing, leveraging and
CO2 / °Fahrenheit / °Celsius chain visibility as meat, fish, dairy and sharing standardized data and inte-
A growing chorus of reasoned and produce moves from the farm or field to grated information to generate insights
informed voices are raising the alarm the fork, lowering waste and spoilage on optimizing the value chain. Smart
about the global impacts of climate and reducing costs. Sensors can also technology can improve the complex
change on agriculture. At a time when enable more efficient production meth- process that is the production, distri-
the energy conversion ratio for many of ods by reducing irrigation, pesticide bution, storage, selling, consumption
our foods continues to trend towards and fertilizer requirements, boosting and disposal of food. Elements include
inefficiency and the environmental im- yields and monitoring moisture, tem- improved planning and coordination,
pact of the food value chain is increas- perature and airflow during storage to efficient storage and dynamic routing,
ingly documented and understood, reduce spoilage. optimization for cost, carbon and other
climate change represents perhaps the attributes and improved traceability. The
most important stress on the global A smarter global food value chain will result can be more, safer, higher quality
food value chain. However the impact also be interconnected—with the dispa- food delivered when and where it is
of climate change likely extends beyond rate ranches, farms, packers, feedlots, needed, and with reduced waste and
the immediate and visible. A recent storage bins, manufacturing and pro- an extended shelf life.
report from the United Nations Food cessing plants, warehouses, distribution
and Agriculture Organization anticipates centers, and retail stores sharing infor-
climate change will also increase food mation and insights. This connectivity
safety risks (increasing incidence of is increasingly important as food today
contamination by Salmonella, Campylo-
bacter, E. coli and Salmonella).
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12. Elements of a smarter food supply can • Sensors technology and actuators • Integrated communication systems
be found and imagined for application can be used to identify and respond enable those at the top of the food
at every step in the global value food to threats across the supply chain value chain to seamlessly share in-
chain: (e.g., excessive humidity or heat, formation about anticipated growth
or contamination). Companies like and demand with downstream, cre-
Commodity and specialty products provid-
Total Grain Management offer such ating a stronger link between supply
ers / primary producers
technologies that monitor conditions and demand
Given the fragmentation and historic
in grain silos and adjust humidity and
lack of technological sophistication
heat to reduce spoilage and forma- • Application of genetic manipulation
among many participants in this area
tion of potentially harmful mycotoxins. and nano-technology to animals
of the supply chain there are many
and crops to deliver drought and
opportunities for greater instrumenta-
• Sensors can automatically adjust pest resistance, nutrition and other
tion, intelligence and interconnectivity,
water usage based on local and re- functional benefits. Already 64% of
including:
gional dynamics (e.g., fluctuations in the world’ soybeans and 24% of corn
seasonal/daily industrial or residential is genetically modified
• Farmers can use GPS and ad-
water requirements
vanced sensor technology to monitor Consumer products companies
weather patterns, assess soil and Smart CP companies can
• Systems and tools can be used to
crop conditions, and adjust their
drive standardization of food related
water, fertilizer and pesticide usage • Leverage the widespread adoption
processes to mitigate risk and reduce
for optimal efficiency. of data standards such as GS1, the
both spoilage and waste. A powerful
power middleware and other com-
example of this dynamic can be seen
• Farmers, growers and even fishermen munications platforms to continu-
in the increasing adoption of pro-
in less developed regions are using ously coordinate inventories, produc-
grams such as the Consumer Goods
mobile phones to access market, tion plans and sales forecasts with
Forum’s Global Food Safety Initiative.
scientific, and environmental data and customers and suppliers to create a
knowledge through services such as consistent, seamless, link between
• Serialization and tagging technol-
Farmers Friend in Uganda, 12582. groups.
ogy, coupled with the application
com in China, mKrishi in India. In this
of standardized nomenclature for
way they can boost yields as well as • Embrace and enable the concepts
participants, locations and products,
their own returns by boosting price and principles of Open Innovation
enables true end to end traceability
realized and reducing production costs. by connecting with a diverse set of
across the supply chain.
internal and external stakeholders
and other interested parties to ac-
cess ideas, technologies, ingredients,
and other assets. In the process
accelerating the new product creation
process, lowering costs and boosting
success rates.
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13. • Reduce water usage in production, Wholesalers and distributors Retailers and restaurants
packaging and products themselves Smart wholesales and distributions In this frequently oversaturated mar-
by marketing concentrated versions are deploying RFID, 2D barcodes, and ketplace, many retailers and restau-
of liquid based products (e.g., laundry other identification technologies to rateurs are finding they must take a
and dish detergent), reusing water in track products as they move through multi-pronged approach to retaining
production processes, the chain. Such technologies enable customers and attracting new ones.
companies to continuously coordinate Strategies include:
• Deploy advanced monitoring tools to inventories, production plans and
listen and understand the concerns sales forecasts with retail or restau- • Maintaining a seamless connection
of customers and consumers about rant customers and CP company with consumers that transcends their
products, brands and companies suppliers for uninterrupted planning location, allowing them to dynami-
in areas such as traceability, social and communication. cally and continuously search, review,
responsibility, sustainability, and apply purchase and take acceptance of
advanced analytics to convert those Additionally, smart wholesalers and products and services leveraging
observations into actionable insights distributors can optimize supply chain devices such as mobile phones, in
such as new products, promotions software to minimize distribution costs store kiosks, and hand held devices,
and distribution strategies. (e.g., storage, transportation) for identification and preference informa-
multiple positive outcomes, includ- tion garnered from web searches,
• Deploy sensors (e.g., RFID tags, ing increased profit and a decreased loyalty cards and purchase history,
thermometers and psychrometers) to carbon footprint. supporting technologies such as
track location and monitor heat and video surveillance, GPS and web
humidity throughout their production, monitoring, and advanced text, data
packaging and storage operations and video analytics.
and connected intelligent actuators
to automatically effect changes to • Improving the in-store experience.
processes, conditions and operations This can be accomplished by provid-
to boost efficiency, service and safety. ing more value added services to
consumers through in-store offerings
• Dynamically optimize their supply such kiosks, shopping cart PCs, or
chain operations against both tradi- self checkout features as well as out-
tional metrics (e.g., $ cost, customer of-store offerings such as Website
service, asset utilization) and new interactions or services.
metrics (e.g., fuel, H20, and C02).
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14. • Adjusting forecasts, orders and Consumers
Sequencing the cocoa genome
inventories based on weather, sea- Usually, considered the end of the
IBM Research, the U.S. Department of Agri-
sonal, calendar, competitive, price, global food value chain, consum-
culture and Mars, Incorporated are teaming
availability and other conditions ers are still driving many changes
up and through their collaboration, they
upstream. “Smart” consumers use
• Ensuring in-stock positions to hope to sequence the genome that makes
technology in myriad ways to become
reduce lost sales, experimenting cocoa, the key ingredient of chocolate.
even smarter, including:
with new formats and channels (See
Researchers plan to use IBM’s computa-
the IBM report on multi-channel) • Using online and mobile coupons
tional biology technology and expertise to
http://www-935.ibm.com/ser-
• Selectively shopping online based on develop a detailed genetic map, identifying
vices/us/index.wss/ibvstudy/imc/
availability, price and convenience the specific genetic traits that produce
a1016279?cntxt=a1000063
higher cocoa plant yields and resist
• Continued challenges coordinat- • Researching products and compa- drought or pests.
ing promotions, new product nies online — both through structured
and controlled content such as com- But like any sweet treat, the results of
introductions and day-to-day
pany Websites and through unstruc- this research will be better when shared.
business with CP suppliers - See
tured and uncontrolled content such Mars will make the genome information
the press release on data sharing:
as social networking sites, online available for free through the Public Intel-
http://www-935.ibm.com/ser-
communities and blogs lectual Property Resource for Agriculture
vices/us/index.wss/summary/imc/
(PIPRA), which supports agricultural
a1031441?cntxt=a1000063
• Sharing information, insights and innovation for both humanitarian and
• Developing the capabilities needed to opinions in real time with other con- small-scale commercial purposes.
support rapidly growing private label sumers and directly with manufacturers
business (e.g., retailers increasingly and other stakeholders such as NGO
need brand management, shopper
• Investigating products and their impacts
insights, marketing capabilities)
Page 14

15. Conclusion For further information
The stresses on the food value chain are Getting Real About the High Price of
pervasive, profound and persistent and Cheap Food (Time Magazine, August 21,
while solutions are not easy, technology is 2009) http://www.time.com/time/health/
no longer the barrier it once was. A smart- article/0,8599,1917458-1,00.html
er food value chain is not just possible,
but imperative. By leveraging the collective Cargill’s Inside View Helps It Buck Down-
and synergistic power of intelligence, turn (The Wall Street Journal, January
instrumentation and interconnectivity we 14, 2009) http://online.wsj.com/article/
can make that imperative a reality. SB123189501407679581.html
Why IBM? Health Ills Abound as Farm Runoff
Technology is shaping how food grows, Fouls Wells (The New York Times,
how it tastes and how it gets to your September 17, 2009) http://www.
plate. A smarter global food system would nytimes.com/2009/09/18/us/18dairy.
help eliminate waste, improve quality and html?scp=2&sq=runoff&st=cse
ensure safety. IBM has the technology
solutions and expertise to make it happen.
To find out how we can help your organi-
zation build a smarter food supply chain,
contact your IBM representative or visit:
http://www.ibm.com/ibm/ideasfromibm/
us/smartplanet/topics/food/20081208/
index.shtml
Page 15

16. ®
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