The impact of product deterioration on the (re)design of food supply chain networks: an application to a perishable food supply chain

Given the increasing demand for freshness, the need to reduce food waste, and ensure food safety, it is crucial to consider quality deterioration processes in the (re)design of food supply chains (FSCs). Past developments in FSCs focused foremost on efficiency and economic profitability, resulting in large-scale centralized processing facilities. This has become a liability as efficiency in large-scale processing limits product differentiation and flexibility. Decentralized (upstream) pre-processing and improved pre-treatments can affect product deterioration in an early stage, resulting in more diverse and intermediate product flows that can be used in existing and new value chains and provide new markets. To identify the benefits of alternative supply chain structures, we propose a generic model based on mixed-integer linear programming. The modelling structures are applicable to a broad variety of different (food) supply chains. Both strategic network design aspects and gradual quality deterioration processes can be incorporated. We demonstrate the applicability of the model through an existing fruit supply chain in China. The results show that decentralized pre-processing can mitigate quality deterioration processes and enhance the total profit of the chain, reduce the energy use in the supply chain, and have a positive impact on social equity.