AgroGrid

Grid enabled market place for the agriculture food markets.

AgroGrid implements a Grid-enabled market place that allows companies operating in agriculture food markets to offer and source capacities, to negotiate SLAs and create dynamic supply-chains. Beyond it also provides the means to monitor quality and safety of food products delivered across supply chains based on the distributed tracking and tracing capability of the GTNet® platform. Monitoring information is automatically compared against negotiated SLAs and SLA evaluation reports are generated.

AgroGrid services can be accessed via the AgroGrid web portal that provides a common user interface and personalized access to manage dynamic supply chains, to negotiate SLAs, and to access monitoring information and SLA evaluation reports. AgroGrid follows the Software-as-a-Service paradigm. This implies, for instance, that access to the AgroGrid market place and its services does not require a special software to be installed, it requires only a standard web browser on the client side.

The AgroGrid platform enables companies to deploy unused resources in a profitable way and it lowers the transaction costs of collaboration in dynamically formed supply chains. At the same time, it enables a gap-free tracking and tracing of food products to support quality assurance and to ensure food safety.

Introduction

To operate their business, market actors need certain capacities, where capacities in AgroGrid refer to any resource, product, production, and transport capabilities that a company can provide in a supply chain. It now may happen that one actor has too much, another actor has insufficient capacity.

Today, enterprises in the agricultural sector interoperate in fixed partner structures with long-term contract relations. Shortly appearing peaks in supplies and demands of capacities cannot be smoothened for example by using appropriate supply chain management systems involving all members of the supply chain. Thus, today’s capacities cannot be exploited in an economically efficient manner. On the one hand this leads to dead capital; on the other hand, tremendous amounts of food are wasted because overcapacities cannot be sold. In 1997 Kantor et al. calculated, that 27% of all edibles available in the USA are thrown away instead of being eaten [KLMO97]. Latest studies of the University of Arizona shows, that 50% of all produced perishables in the US are never consumed [IlSF09]. The global food industry possesses a huge market size of 3'500 billion $ [WiMe06]. The combination of this huge market size and the possibility of a reduction of waste of perishable goods show the enormous economic impact of this situation.

By using the AgroGrid system, now the one actor can offer its over-capacity, while the other actor can look up capacities. So the participating companies – as parts of emerging, dynamically composed supply chains – are able to offer unused resources in a profitable way. At the same time, an efficient food tracking and tracing system (TraceTracker’s GTNet®, [TRTR09]) will be integrated together with SLA-Monitoring and SLA-Evaluation mechanisms ensuring gap-free retracement and food safety for corresponding products.

Problem Description

In order to raise economic potentials in terms of cost savings and increasing earnings, some gaps need to be bridged. Food supply chains usually consists of companies of heterogeneous nature many small or medium sized farmers (SME, see Figure 1) located around the world, local consolidators, logistics providers and some very large food retailers like Carrefour or WalMart. All of them are running different Enterprise Resource Planning (ERP) software or even paper based solutions to manage their production or transport facilities. Due to this heterogeneity, supply chain partners are not able to coordinate their capacities towards new dynamic production networks by using advantages of modern Information and Communication Technology (ICT) to lower transaction costs.

: Figure 1 Distribution of European agricultural holdings by economic size.

1 ESU (European Size Units) is roughly corresponds to either 1.3 hectares of cereals or 1 dairy cow or 25 ewes. All farmers with less than 16 ESU are categorized as small principal and part-time farmers. [Euro08]

Additionally to the problem of unused capacities and the amount of wasted food, a trend of changing consumer demands can be observed over the last decades (see Table 1). Besides focusing on price, quality, variety, and delivery time, consumers pay increasing attention to product innovation, individualized food, and food safety. To be able to satisfy these consumer demands, a market place is required that brings market players of different background and size together, imposes only a minimum level of entry barriers, facilitates electronic interchange across business boundaries, improves food chain management, and enables tracking and tracing of food products from one end of the supply chain to the other.

Period	Consumer demand	Management concern	Management technique	Performance agri-business	Organizational focus
1960s	price	Efficiency	just in time	efficiency	firm
1970s	quality	Quality	material requirements planning	quality	firm
1980s	variety	Quality	supply chain management	flexibility	bi-lateral
1990s	delivery time	Flexibility	efficient consumer response	velocity	chain
2000s	uniqueness	Innovation		innovation power	chain network

Table 1 Change of consumer's Preferences [WiMe06]

The motivation of AgroGrid is (1) to enable companies to deploy their capacities extensively and, (2) simultaneously, to ensure food safety via efficient tracking & tracing of goods and automated SLA-Monitoring & -Evaluation. Furthermore (3) small charges of food can be produced and delivered to all those customers having special requirements to their daily food, e.g. competitive athletes, brain workers, allergic persons, vegetarians, etc. Last but not least (4) SMEs will be able to widen their market access by using AgroGrid for lowering transaction costs. The participation in huge VOs leads to a stronger negotiating position of the small farmers and they will be able to receive higher prices for their raw materials.

All together, AgroGrid addresses problems in the area of information distribution and the coordination of dynamic value systems in food industry. The goal was to develop a system-prototype of a Grid-based marketplace with trust-building and quality assurance mechanisms for capacities especially for the food industry. The Business Experiment delivered an architectural blueprint of the AgroGrid System and realised a demonstration scenario for the AgroGrid System which is used by enterprises of the agricultural IT industry in order to offer their customers – food supply chain companies – a solution to form dynamic and flexible production networks.

Overview of the Architecture

To meet the problem of dynamic supply chain composition, the AgroGrid’s full lifecycle solution for dynamic capacity markets realizes a Grid enabled market place, which allows companies in the agriculture food sector to offer and search for capacities, negotiate SLAs, and create dynamic supply chains. Thereby, a supply chain in AgroGrid is represented by a Virtual Organization formed by those parties, who participate in all supply chain steps of a particular product or food trade unit.

To ensure food safety, the AgroGrid’s full lifecycle solution provides continuous monitoring and evaluation of quality and environmental condition of food delivered across the supply chains, based on distributed tracking and tracing capability of the GTNet® platform and SLA-Monitoring&Evaluation component. The GTNet® capability offered by existing GTNet® platform, allow the supply chain members to query monitoring-information-history about quality and environmental-condition-data of food trade unit which he/she receives. The monitoring-information-history comprises monitoring data from different locations, where the food trade unit has been located in the past. As a result of continuous monitoring and evaluation of monitoring data from GTNet® through SLAs, the SLA-Monitoring & Evaluation component generates SLA evaluation reports, which reflects any occurred violation of negotiated SLAs.

The solution provided by AgroGrid consists of the following components (see Figure 2): the Portal, the VO-Management, the SLA-Negotiator, the SLA-Monitoring&Evaluator and the Track&Trace component.

: Figure 2 AgroGrid Architecture

The Portal provides AgroGrid users with a common, web-browser based, user-friendly, and secure interface to AgroGrid services. All participating companies of AgroGrid are stored in a BaseVO registry, which is located on the AgroGrid portal. This registry serves as a database of all companies principally willing to share their capacities; it is also used for authentication of the AgroGrid users. The secure and personalized access to AgroGrid portal and thus to AgroGrid services is authenticated by user login and password, and could be combined with users’ certificates. The AgroGrid portlets and services hosted on the portal enable AgroGrid users to publish their own capacities, to search for capacities, to negotiate SLAs, and to build supply chains in a guided and user-friendly way. The portal offers also access to the SLA-Monitoring&Evaluator component that generates SLA evaluation reports as a result of the monitoring of quality and environmental conditions of food trade units during their production, storage, transportation or delivery.

The VO-Management component is used for the setup and administration of partner memberships in the supply chains. A party wanting to create a supply chain, called supply chain manager (SC-Manager), uses VO-Management for the management of parties participating in the supply chain, called supply chain member (SC-Member). To know how many companies in which role are needed to fulfil a certain customer demand, AgroGrid provides templates for characterizing the topology of supply chains. Those templates define the role of required companies in the supply chain and their relationship to each other. The problem of composition is to find potential companies which are able fulfil these roles in order to build a new supply chain for a certain objective. In order to show the current state of the virtual organisation, AgroGrid provides a VO visualization portlet (located within portal), showing a colored graph which represents the supply chain and its members.

The SLA-Negotiator component allows negotiation of SLAs between a capacity requester and a capacity provider. The negotiation of SLAs includes the negotiation of price, quantity, quality parameters of food to be delivered, environmental conditions during the transport or storage, and the compensation in case of SLA-violation. The SLA-Negotiator is connected to the SLA-Template Repository, where SLA-Templates are stored. The SLA-Template reflects a capacity offered by a company on the market.

The Track&Trace component consists of an Enterprise Resource Planning system (ERP) and Traceability Information Exchange (TIX) database. The ERP serves as a source of tracking and tracing information, as well as a source of monitoring information about quality and environmental conditions of food trade units during their production, storage, transportation or delivery, located on the company sites. The tracking and tracing information, as well as monitoring information provided by the ERP are stored in the local TIX database. The local storage of data is important for not violating company’s data ownership – a crucial criterion for companies deciding whether to join the AgroGrid market place or not. The local TIX provides also interfaces for querying traceability and monitoring information stored in the TIXs of the supply chain members. The access to TIXs of the supply chain members is mediated by a local TIX, and is secured by mechanisms provided by GTNet-Hub (Global Traceability Network-Hub) which connects all TIXs.

The SLA-Monitoring&Evaluator component is responsible for the monitoring and evaluation of SLAs which were successfully negotiated. In order to obtain monitoring information, the component queries the monitoring data which is located not only in the local TIX database, but also in the TIXs of the supply chain members. The queried information is transformed into SLA metrics defined by the corresponding SLAs. The monitored SLA metrics are compared and evaluated in the SLA-Evaluator service against the evaluation criteria defined by the SLA. In case of SLA violation detection, the SLA-Evaluation service notifies affected supply chain members about the incident. The result of the SLA evaluation is stored in the evaluation report database and is accessible via the AgroGrid portal to supply chain members. The evaluation report serves for checking of successful SLA fulfilment, and in case of a detected SLA violation it serves for the determination of penalty and compensation.

To summarize this up, the combination of the described components used for the development of the AgroGrid system realizes the full lifecycle solution for dynamic capacity markets, allowing building and monitoring of dynamic supply chains. AgroGrid provides the following solutions in order to solve all analysed business problems respectively all customers’ requirements:

A capacity market place based on market mechanisms to offer and request well defined capacities
A BaseVO registry, a VO management and a VO visualization to deal with dynamic supply chain composition
SLA negotiation component to automate the negotiation and supply chain building process.
The SLA monitoring & evaluator component to ensure food safety by continuous evaluation of monitoring data.
A Tracking and Tracing component to ensure a gap free retracement of all delivered goods

A easy way to access all those components through a single user interface provided by the Gridsphere portal server

Typical Scenario Description

This section describes the typical food related scenario on how the system can be used to solve the problem described in previous sections.

Participants of a supply chain for apricots are operating in traditional boundaries delivering apricots in the traditional quality measures. They only deliver the amount of apricots asked for by their contract partners. In addition to the traditional distribution channel, the producers of apricots can offer overcapacities or specially treated batches (e.g. organically produced apricots treated meeting special allergic requirements) in the Grid-based market by registering them in the AgroGrid system. Capacities in AgroGrid include any products and services offered by a participant, e.g., food products, transport and storage capacities.

The local consolidator uses the AgroGrid system to create a supply chain for special treated apricots. After logging in to the AgroGrid portal and selecting desired supply chain template for apricots, the AgroGrid system guides the local consolidator during the supply chain building process.

In order to find the special treated apricot capacity, the consolidator uses the capacity query of the AgroGrid portal to discover available apricot capacities. After finding the right capacity, the consolidator negotiates SLA with the capacity provider. After both parties agreed on the SLA, the provider is added automatically to the newly created supply chain of the consolidator.

In the similar way the consolidator finds and contracts logistics companies, needed for the transport of apricots to local company site and then to retailer. The SLA between the consolidator and the logistics company contains in this case the description of environmental conditions during the transport of apricots.

During the storage, shipping, transport, and delivery, the quality and environmental conditions of food-trade units (apricots) are monitored and evaluated continuously against the negotiated SLAs. In case of a SLA violation, the affected parties are notified immediately about the violations and reasons that lead to violation. The result of monitoring and evaluation is stored in an evaluation report and is accessible to supply chain members via the AgroGrid portal.

Benefits of the solution

AgroGrid services results in the following business impacts:

Enable companies in the food industry to profit from a solution managing dynamic production capacity markets in the agricultural segment with integrated tracking and tracing, automated SLA-monitoring and evaluation components.
Establish a platform for AgroGrid users to offer, negotiate, and book available production capacities.
Enhance complicated traditional business processes through a dynamic creation of VOs to rationalize processes and to reduce the overall costs of providing services for various market levels.
The AgroGrid service provider combines the strengths of dynamic capacity networks with a leading solution for tracking, tracing and collaboration in food markets.
The utilization of the Agro Grid services leads to positive impact on consumer confidence, faster product recalls and finally to a higher level of public welfare.

Accordingly, the major benefits for companies using AgroGrid services include:

On-demand visibility of available production capacities
Availability of an efficient tool to manage product offerings, transaction negotiations and actual purchases of available production or logistics capacities
Cost reductions for sourcing and quality management
Improved ability to manage product recalls
Availability of a tool to drive differentiation and consumer confidence

In summary, AgroGrid users profit from benefits in being enabled to publish their own capacities and to request other companies’ capacities to reach their business goals. AgroGrid also facilitates tracking and tracing of food products along the supply chain for its users. AgroGrid, thus, supports its users in all aspects of collaboration from the early stage of searching a partner and automated capacity negotiation, monitoring and evaluation of SLAs, to tracing of goods during shipment, as well as tracking goods back to their origins.

References

[IlSF09] Ilic, A., Staake, T., Fleisch, E.: Using sensor information to reduce the carbon footprint of perishable goods. IEEE Pervasive Computing 7(1) (2009) 22-29

[Euro08] Eurostat: Agricultural statistics, main results 2006-2007. Technical report, European Union (2008)

[KLMO97] Kantor, L.S., Lipton, K., Manchester, A., Oliveira, V.: Estimating and addressing america's food losses. FoodReview 20(1) (August 1997) 2-12

[TRTR09] TraceTracker Innovation ASA; www.tracetracker.com

[WiMe06] Wijnands, J., van der Meulen, B., (eds), K.P.: Competitiveness of the european food industry - an economic and legal assessment. Technical report, European Commission (2006)

[CGW09] Volk E, Jacob A, Mueller M, Racz P, Waldburger M, Bjerke J (2009): Agrogrid - Composition and monitoring of dynamic supply chains. In: Proceedings of The Cracow Grid Workshop 2008 (CGW’08), Krakow (March 2009) 373–381

[GECON09] Volk E, Mueller M, Jacob A, Racz P, Waldburger M (2009): Increasing Capacity Exploitation in Food Supply Chains Using Grid Concepts. In: Proceedings of The 6th International Workshop on Grid Economics and Business Models 2009 (Gecon 2009), to appear