The production of fresh fruit (apples and pears) and concentrated juice is one of the major regional economic activities of Argentina, which has traditionally been one of the world’s main fresh fruit and concentrated juice producers. Due to market reasons, there is a strong need to count with reliable decision tools to manage the whole business. In order to tackle this problem, advantages can be taken from developments on formulations of planning and scheduling models. In this work, a realistic planning model of a packaging plant, the most important instance within the fresh fruit supply-chain industry from a tactical point of view, is developed. The model can be applied to estimate the fruit processing capacity of the facility in order to establish future sales policies.
The production of fresh pip fruit (apples and pears) and concentrated juice is one of the major regional economic activities of Argentina. The “Alto Valle de Rio Negro y Neuquén” area of Argentina (AVRNN), located across two states southwest of the country, is the region where apples and pears are grown.
During the 90s, fruit companies made important capital investments on new machinery for efficiency improvement. More recently, due to new worldwide competitors from South West Asia, local economic problems and volatile international markets, companies were compelled to improve even more their competitiveness to keep on business.
There are a few large companies that operate along the complete fruit industry supply chain (FISC), and concentrate the largest part of the business in the AVRNN region. A typical FISC of one of these companies involves one or more packaging and concentrated juice plants. Raw material for these plants can be supplied from own and/or third party farms. Final customers involve overseas, regional and local markets. Previous work (Masini, Petracci, & Bandoni, 2003) has addressed the Argentinean FISC planning problem.
Packaging plants (PP) represent the core of the FISC from a tactical point of view. At a PP, after raw material reception a decision has to be made whether the fruit is sent to cold storage for later processing or directly to the processing line. The processing line involves several steps consisting in washing, manual and automatic classification (by size, color, external aspect, etc.), waxing (if required), and packaging in different ways depending on customer preferences.
In the last decade there has been and increasing effort in developing and applying planning models in different instances of the food industry and in particular in the fruit industry. Mathematical programming planning models have been proposed for example for pip fruit orchard replacement (Kearney, 1994), to address the biophysical growth of apple plants (Hester & Cacho, 2003) and to fruit farm activities scheduling (Vitoriano, Ortuño, Recio, Rubio, & Alonso-Ayuso, 2003). According to the authors’ knowledge, however, no contributions have addressed the operations management issues of PPs as described. Close related work is Broekmeulen (1998), where a tactical decision model for distribution centers for vegetables and fruits has been proposed. The main objective of that model is to provide an optimal assignment of the different perishables to the diverse storage zones within the center in order to minimize the so-called keeping quality loss.
It is the purpose of this contribution to present a detailed planning model of the operation of a PP, which includes its storage and processing activities, as described for the FISC. The model is intended to operate in a profit mode, this is to estimate the amount of products that the installed capacity can process provided a historical profile of fruit income. In such a mode of operation, the proposed model is considered to be a valuable tool in order to establish future sales policies.
In this work, the planning problem of a typical fresh fruit PP has been addressed. It has been applied in a profit-oriented mode in order to estimate the production capacity of the facility. Results were presented corresponding to a packaging plant operating one processing line, with seven fruit varieties and 20 final products.
Such a model constitutes a valuable tool for the PP manager at the negotiation instance of the business, when sales commitments are established with the different demanding markets.
Essentially the same model can be applied in another mode of operation in a sales oriented fashion: provided a historical profile of fruit income and an established sales program, generate a processing plan in order to maximize total profit, while penalizing non-satisfaction of sales commitments in terms of volume of fruit and delivery deadlines. In this mode of operation, a plan that accomplishes as close as possible the sales program, in terms of volumes and deadlines, results. It is also intended to address the often critical tradeoff between keeping non-allocated fruit in cold storage while expecting better sales prices. In such a mode, the model becomes a valuable tool to estimate future resources requirements (third party cold storage, labor, energy, etc.) and therefore to identify potential bottlenecks of the system. Future work will address the sales oriented fashion version of the model.
Several improvements to address more realistic versions of the system are possible and will also motivate future work. They imply for example, the consideration of PPs with several parallel processing lines, “partial harvests” effects for each variety, “batch” fashion processing of the fruit suppliers, detailed flows within the cold chambers, transportation issues, etc. A further natural extension of the present work which is under development, is the explicit consideration of the stochastic nature of the system under study.
