Connected Corners

Cold chain optimization & transformation: Spotlight on key initiatives (Part 2)

This segment outlines some of the key initiatives value chain players can explore in optimizing and/or transforming aspects of their cold chain operations

Continuing from Part 1; this segment aims to briefly outline some of the key challenges and initiatives value chain players can explore to optimize and/or transform aspects of their cold chain operations

The fact that cold chain operation involves managing a complex network of temperature & humidity controlled assets through every step of the product journey makes it that much more challenging than ‘equivalent regular’ supply chain operation

Quick note: Despite some similarities inherent to the supply chain function across industry verticals, each business is relatively unique (geographic presence, product mix, service offerings, strategic goals, industry partnerships, et al.) and as such their cold chain strategies, logistics solutions & CX programs will be reflective of their individual goals & capabilities

Key Challenges

Whether developing a scalable & robust cold chain operation from scratch or optimizing/transforming an existing one; value chain players face a multitude of challenges

…starting with the selection of apt technologies, tools, systems, platforms and networks (combination thereof) during the solution design phase

Balancing the function’s operational efficacy, process transparency, ROI growth, real estate opportunities, fleet optimization, CX programs and environmental footprint (think: green supply chain) are just some of the many ongoing operational challenges

Add to this the complications and costs involved in complying with various regional & local regulations (think: fresh food & medicinal product safety)

And lastly (but not the least) is the development of a coherent (frameworks, processes & communication) cold chain operation that encompasses seamless (forward & reverse) logistics, distribution, storage & last mile delivery solutions

Key Initiatives

There are a range of initiatives – including digital, cloud & connected solutions – that value chain players can explore, develop, implement and manage to optimize/transform aspects of their cold chain operations

Many of these initiatives could not only help address some of the aforementioned challenges but also help unlock new opportunities to improve growth, ROI and maintain a competitive edge in the fast growing segment

Initiatives to Optimize Cold Chain Operations - Connected Corners

1. Smart asset & connected operations

Gaining real-time view on (cold chain) assets, resources and the perishable products itself would be highly beneficial for supply chain managers seeking to extract every bit of efficiency gain from their cold chain operation

Aim: To develop smart assets & connected cold chain operational capabilities

Initiative: Developing smart operations with the aid of connected technologies (IoT, BLE, LoRa WiFi, et al.) that allow for real-time product tracking & asset monitoring for value chain players

Refrigerated transport fleet equipped with GPS & connected (IoT) tech for example could not only provide businesses with real-time tracking & live updates but also give them the ability to remotely control each container’s temperature & humidity levels as needed

Furthermore, next generation autonomous smart connected systems, embedded with AI & ML tech, could be programed to not only predict adverse conditions throughout the product’s journey…

…but also self-regulate temperature, air quality, & humidity levels to ensure optimal container conditions are maintained at all times, under any condition and with minimal to no manual intervention [more on this in a separate topic]

2. Product traceability & process transparency

Consumers & select businesses alike (think: local restaurants) are increasingly wanting to know where their fresh produce has come from (traceability) and the journey it has taken to get to them (transparency)

Aim: To integrate product traceability & process transparency frameworks, tools & platforms across every step of the cold chain journey (from source ➪ destination/purchase)

Initiative: Integrating connected technologies (RFID, IoT, etc.) in conjunction with blockchain could help value chain players address this challenge

Blockchain platform’s inherent traits – namely – shared ledger (with authorized parties), near-real-time immutable updates, cryptographic security and auditable smart contracts – have the potential to unlock food authentication & transparency at every step of the product’s cold chain journey

This tech combination could also prove instrumental in supporting tail end cold chain businesses track, monitor & enforce other key operational aspects such as environmental footprint, ethical sourcing, regulatory compliance, et al. from the point of origin [more on this in a separate topic]

3. Real time data & operational intelligence

Today, developing real-time data, insights & reporting capabilities is crucial for efficient operational management & effective decision making process across almost all business functions… and cold chain segment is no different

Aim: To enable real-time operational intelligence capabilities across the end-2-end cold chain process

Initiative: Leveraging the aforementioned set of smart & ‘always-on’ connected assets to enable near/real-time access to vital data & statistics for authorized value chain partners

Additionally, when augmented with advanced analytics engine that embeds AI & ML (on-device or cloud) tech could have the potential to unlock real-time corrective action recommendations as well

4. Device agnostic on-demand insights & reports

Imagine the additional effectiveness of these critical real-time insights & reports if they can be accessed on any device and available at all times?

Aim: To build device agnostic and on-demand insights & reporting capabilities

Initiative: Building cloud based platform that could support businesses achieve real-time insights and reporting dashboards; which are also generally agnostic of the end users’ device type and are available at almost all times

In fact, many modern day cloud solutions also provide multiple benefits; such as –

Turnkey systems: Out-of-the-box and ready to use cloud based insights & reporting dashboard solutions that also works well with the business’s existing data supply chain & warehousing infrastructure

Device agnostic UX: Cloud solutions that have the ability to serve similar if not same levels of insights & reporting dashboard experience (UX) to a wide variety of terminal devices; irrespective of their individual characteristics (mobile/desktop, OS version, connection type, et al.)

On-demand availability: Bar certain situations (server downtime, maintenance, connectivity failure); cloud solutions that provide an ‘always-on’ experience with users able to access insights & reports at anytime and virtually anywhere

5. Accessible cold storage facilities & solutions

It is a given that timely & cost effective access to cold storage facilities as well as transportation are the lifeblood of fresh produce growers/farmers

Aim: To develop accessible cold storage facilities & solutions; particularly for remotely located fresh food manufacturers, growers and farmers

Initiative: Building robust network of centralized + de-centralized cold storage facilities in flexible & cost effective formats (think: on-site cold silos, on-demand mobile cold storage, et al.)

Real estate in particular forms a sizeable chunk of a typical cold chain operation’s CAPEX & OPEX costs… but if done right could also provide relevant value chain players with lucrative investment opportunities (read: operational ROI, land value appreciation, sub-leasing, et al.) but also provide a competitive edge in the long run

Making critical real estate investment decisions would also be dependent on the businesses’ ability to accurately study current state and predict future growth trajectory of the overall cold chain segment as well as a range of other standard business case factors (industry movements, centralized vs. decentralized storage requirements, real estate supply vs. demand, labor/transportation costs, et al.)

Concurrently, building flexible onsite cold storage solutions would not only help producers, farmers & co-ops reduce/eliminate potential transit related wastage, costs & complexities

…but also afford them the flexibility of storing apt levels of harvest on premise (read: inventory control) required to unlock diversification opportunities such as Direct-2-Consumer -D2C services- if deemed financially viable (farm-to-door veggie stir fry mix anyone?)

6. Environmentally Friendly / Carbon Neutral Operations

Aim: To ultimately transition into an environmentally sustainable &/or carbon neutral cold chain operational footprint

Initiative: Developing and implementing an apt mix of green supply chain and circular supply chain initiatives that could help businesses reduce their overall (cold chain) environmental footprint

– Green supply chain: These could include investment in renewable energy sources across the cold chain operations (think: solar powered cold storage facilities) as well as emission reducing/eliminating vehicle fleets

– Circular supply chain: Whilst the actual lettuce or spinach may not be recyclable (though compost friendly); products supporting them such as shipping pallets, packaging materials and even delivery boxes are apt candidates for recycling and re-purposing… which goes a long way in helping reducing the operations’ overall environmental footprint [more on this in a separate topic]

So…

Each cold chain business can explore implementing a combination of initiatives that best suits their goals & needs… whether be it for addressing existing set of challenges or bolstering their future competitive position

Digital, cloud & smart asset technologies not only aid in optimizing operational efficiencies & facilitating effective communication amongst value chain providers within the cold chain ecosystem but also contribute towards improving the overall CX (read: gain competitive edge)

But developing the very systems, tools, platforms & infrastructure that enable real-time data analytics, insights, reporting & communication could also end up being capital intensive; a challenge that many businesses would need to navigate during the planning phase

Concurrently, as the industry’s need for building robust cold chain operations continue to grow, so too would the demand for prime real estate that supports its operations (read: cold storage & distribution facilities)

As such value chain players would require robust insights to support diligent decision making process, particularly as it pertains to investing in a multi-year commitment for the right location (cost, efficiencies et al.) and transport fleet

One of the bigger challenges could also be the harmonious implementation of digital & connected initiatives across a multi-business cold chain network spread across a geographical footprint (think: impact on seamless real-time insights, analytics and optimization when transport company implements different set of digital solutions to their distribution center counterpart… within the same cold chain network)

Forthcoming segments will explore some of these initiatives and challenges in further detail as well as the impact they have on the overall cold chain ecosystem

Stay tuned!