Quantifying the 3 Key Benefits of Automating Fresh Produce Quality Control
“In God we Trust… All Others Bring Data.”
When we started Clarifruit, we were leading the way with a brand-new vision for digitizing and automating the quality control process for fresh fruits and vegetables. We could see the potential for our technology – the first of its kind. When we presented the solution to prospects, the possibility in the rooms (and the Zooms) was palpable.
Over the past few years, the market has shifted. The benefits are now being realized by many customers across the US, Europe, LatAm and Asia, and we no longer need to introduce prospects to the potential of Clarifruit. We can show customers by the numbers what they often know already – that automating their QC process has a measurable impact on their bottom line. As borrowed from W. Edwards Deming for our title, “In God we Trust… All Others Bring Data”!
If you’re just getting started, let’s use the example of a company generating $200m of annual revenues, and deep dive into three key benefits that you could expect to see.
What are the 3 Key Benefits of Automating Fruit and Vegetable QC
1. Automating the data collection process = $1,125,000/year
By automating the QC process, our customer replaces subjective and manual processes with objective and consistent inspections across the entire operation. This could be for pre-harvest, for in-take or final product at the packing center or warehouse, or at the distribution center or front of store if we’re talking about wholesalers or retailers. No more color charts, no more sizing tools, no more Excel spreadsheets.
Up until now, our customer has relied on a staff of 50 inspectors to manage QC, but thanks to automation, productivity is now up 50%. If we assume that each inspector is earning $45,000, that’s a saving of $1,125,000,000 each year! With inspections taking half the time, we’ve seen customers achieving double or even triple the number of tasks, opening new distribution centers, increasing the varieties of fresh produce they work with, or freeing up their inspectors to do higher-value tasks.
2. Big Data platform that streamlines all communications = $300,000/year
The benefits of centralizing all of your information into a single place means no more uploading individual data sheets, no more running your business from multiple different locations, and the ability to eliminate reliance on individual staff to ensure everything is available to view. Easily obtainable real-time information is a game-changer, providing a single pane of glass for management and for analytics.
But what does that mean by the numbers? We’re had multiple customers tell us that where it previously took them 4 hours to find the right QC report, they can now find it in 10 seconds. When you’re dealing with a time-sensitive rejection or query, this time saving is worth its weight in gold. We’re also factoring in all the smaller efficiencies that add up throughout the day such as emails, WhatsApp messages, SMS messages and phone calls to check or track down information.
All in all, a unified communications platform in this use case saves our customer 25 hours per month for each of their 25 senior management executives in supply chain or procurement, each of whom makes on average $40 per hour. That’s $300,000 in savings through improved back-end processes, before you even mention the quantifiable benefits of all that Big Data.
3. Optimization of the supply chain to reduce waste = $1,400,000+
At Clarifruit, we call this the Jerry Maguire bucket because it’s where we’re able to… show you the money!
Suppliers regularly see a 7% margin loss because of rejections, and for retailers – the numbers can be even worse, as high as 15% in terms of the waste in fresh produce that enters their distribution center doors. This shrink between distribution center and front-store costs millions each year. For our $200 million revenue customer, 7% = $14,000,000 in waste.
Through creating a consistent standard for each produce category, and ensuring you set your preferences in line with your customer expectations, Clarifruit can reduce the amount of waste considerably. To be conservative, let’s say that utilizing the Clarifruit solution reduces your rejections or shrink by 10%. That’s a $1,400,000 saving!
Almost $3,000,000, – and We’re Just Getting Started!
With huge savings coming from three directions, this customer sees a payback period of less than 2 months, a compelling ROI!
This is so much more than just a hypothetical use case. In fact, at Clarifruit, this is all in a day’s work. These benefits are being actualized right now across the whole fresh produce quality control value chain, with customers that span retailers, wholesalers, marketing companies and beyond. We’re seeing the measurable results come into fruition.