An overview of share shrink/waste occurs in the food cold chain and how retail grocers can proactively manage inventory and quality to improve customer satisfaction and profitability.

1. The True Cause of $17 Billion Cold
Chain Shrink
Updated 11.10.11 of the $17 Billion Cold Chain Shrink
The True Cause

2. Introduction
The new Retail Grocer landscape:
• Retail grocers are facing a tough,
new environment.
• Retailers are looking at new ways
to optimize cold chain operations
due to:
- New regulations
- Fickle customers
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

3. The $35B Blind Spot
Wasted produce
• One third of shipped produce is
wasted annually.
• $35 billion in perishable shrink.
• Stores lose 20% of available
perishable profit to shrink.
• Reducing perishable shrinkage by
20% will increase total store profit by
33%.
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Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

4. The $35B Blind Spot
Where does shrink begin?
• At the store?
• In the truck?
• At the distribution center?
• Earlier?
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

5. The $35B Blind Spot
Shrink at the store:
• Many grocers think waste due
to spoilage occurs after it is
received at the store.
• Assumes uniform aging and
shipment does not change from
field to store.
• If quality was compromised,
grocers would have rejected
shipment.
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

6. Digging Deeper: Shrink Starts in the Field
Shrink starts in the field
• ~50% due to bad post harvest practices
$17 billion cold chain waste per year!
Post Harvest
Total Shrink Practices
Other
0 10 20 30 40
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

7. Truck-level Monitoring
Truck-level monitoring:
• Typically uses one or two
temperature monitors per truck.
• Does not monitor condition of all
pallets – pallet level variation is
significant and impacts quality.
• Visual inspection is not adequate –
it is a lagging indicator and
identifies problems after they have
occurred.
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

8. Truck-level Monitoring
Consider this example: a truck with 8 pallets…
Status unknown
0 Days left
2 Days left
4 Days left
6 Days left
Truck arrives at DC; condition of
individual pallets is unknown
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

9. Truck-level Monitoring
Status unknown
? ? ? ? 0 Days left
2 Days left
4 Days left
? ? ? 6 Days left
One pallet is sampled. Status of
other pallets remains unknown.
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

10. Truck-level Monitoring
Status unknown
0 Days left
2 Days left
4 Days left
6 Days left
Assumption: Entire shipment has 6
full days of shelf life left
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

11. Truck-level Monitoring
Status unknown
0 Days left
2 Days left
4 Days left
6 Days left
Reality: Only 25% of the shipment
has 6 days left.
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

12. Implications
Sampling only one pallet results in a:
• 50% chance of rejecting entire shipment (100% waste)
• 25% chance of assuming the entire shipment has 2
days of shelf life
• 25% chance of assuming the entire shipment has 6
days of shelf life
All cases lead to waste or unsatisfied
customers due to poor product quality!
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

13. Intelleflex Solution
Intelleflex Solution
• Achieves pallet-level monitoring
• Powerful ROI at under a dollar per pallet per use
• Tags can be read without unpacking trailers or pallets
• Reduces waste at the store by managing temperature from field to fork
using FEFO
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

14. Pallet-level Monitoring
Pallet-level monitoring
ensures:
• Quality and safety
• Profitability
• Traceability
End Result:
• Happy customers
• Reduced out of stocks
• Reduced overstocks
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11

15. Interested in Learning More?
To learn more about cost-effective pallet-level tracking and
addressing traceability requirements, download the full whitepaper at
www.intelleflex.com/cut-retail-waste
or email
info@intelleflex.com
SHM PowerPoint Template Guidelines 03.15.10
Intelleflex PowerPoint Template GuidelinesChain Shrink
The True Cause of the $17 Billion Cold | Updated 11.10.11