(178e) Food Manufacturing: The Shift from Centralised to Distributed Production

Projections for global food demand for a growing world population indicates an increase of 70% by 2050 (United Nations, 2017). The competitiveness among the food producers to satisfy production demand and consumer expectations has led to the search of new alternatives and innovations to make food products more attractive for the consumers, thus increasing company profits (Ingram et al., 2013).

With the growing concern about climate change, the consumer expectations are not limited to the relation quality-price, but also they include a low environmental impact of the product (Kemp et al., 2010).

As in other industries, the food manufacturing has benefited from the economy of scale, where the mass production allows the reduction of the manufacturing cost. However, a centralised production leads to a complex distribution chain, where the distances travelled for the product distribution increase and with them the cost and the CO₂emissions related to transportation.

Another production alternative is distributed manufacturing with shorter distances among the facilities (i.e. farm-factory, factory-distribution centre), thus the transportation cost and hence environmental impact are reduced. Nevertheless, other factors can affect the environmental impact of a production-distribution system, e.g. the carbon footprint of the raw materials.

The aim of this work is to analyse from an economic and environmental perspective several manufacturing-distribution scenarios, and identify the factors with greater influence in the choice between a centralised manufacturing and a more distributed one. For this purpose, a novel framework we call the honeycomb model is presented for the techno-economic and sustainability assessment of different manufacturing scenarios. This framework can be applied for the estimation of the optimum configuration that minimises the cost and CO₂emissions of the manufacturing-distribution chain, as well as perform studies of sensitivity of the optimum number of processing plants to certain parameters/characteristics of the system. Here, the tomato paste production is used as case study.

The results indicate that increments in the area of the system analysed and the product demand favour a more distributed manufacturing, while the origin of the raw materials and their carbon footprint could lead to the centralisation of the production.

Sensitivity analysis of the optimum manufacturing configuration provides important information about when a more distributed manufacturing is preferred over a centralised one. This information can be useful for further design of strategies to shift a centralised manufacturing-distribution configuration to a more distributed one when the purpose is to boost local economies.

This project is part of the Centre for Sustainable Energy Use in Food Chains (CSEF) from RCUK.

References

K. Kemp, A. Insch, D.K. Holdsworth, J.G. Knight. 2010. Food miles: Do UK consumers actually care? Food Policy 35:504‒513.

J.S.I. Ingram, H.L. Wright, L. Foster, T. Aldred, D. Barling, T.G. Benton, et al. 2013.Priority research questions for the UK food system. Food Sec. 5:617–636.

United Nations. Available in: http://www.un.org/en/development/desa/news/population/2015-report.html. Date accessed: February 18^th, 2017.