Within a year of the pandemic, scientists relentlessly worked to find vaccines to combat the deadly COVID-19 virus. While the world waited for these vaccines to be available, pharma supply chains worked on executing massive critical and time-sensitive shipments. And within a couple of months, COVID-19 vaccines were available to the masseswhich was possible only because of efficient cold chain logistics powered by innovative technology solutions.
While I had a tough time managing my daughter’s tantrums during the vaccination, I promised her a treat with a happy meal at the nearest McDonald’s. Now you may wonder about the relationship between these lifesaving vaccines and a McDonald’s happy meal? Both wouldn’t reach the consumers if it were not for the miracles of cold chain logistics. Cold chain logistics makes the movement of highly sophisticated products like biologics, vaccines, lifesaving drugs, and your favorite ice cream possible. The critical processes of cold chain logistics enable making the right thing available at the right time and to the right place in the perfect condition.
What Are Cold Chain Solutions?
Cold chain logistics involves the transportation of temperature-controlled products along a supply chain using refrigerated packaging solutions to preserve the quality of products such as fresh agricultural produce, seafood, frozen food, or pharmaceutical products. The adherence to committed temperature ranges ensures that they are fit for use and prevent waste.
According to the numbers mentioned by Statista, the global cold chain logistics market was worth almost 248.4 billion U.S. dollars in 2020 and is expected to exceed 410 billion U.S. dollars by 2028, while another report by FiorMarketsestimates that the market size will reach 546.7 billion U.S. dollars by 2028. Thus, there is an evident increase in demand for advanced cold chain solutions owing to numerous reasons such as the shift in customer consumption patterns, advancements in packaging technology, or storage of meat and seafood products, processing technology, etc.
Key Elements of Cold Chain Logistics
The cold chain logistics solutions comprise the following key elements that play a vital role to control and monitor temperature for cold chain products.
- Storage Equipment
- Packaging Material
- Quality Assurance by Monitoring
- Means of Transportation
- Product Handling During Transportation
- On-time Delivery/Customer Commitment
- Miscellaneous - Compliances
1. Storage Equipment - Cold chain products leave the manufacturer’s premises packed in special equipment to maintain temperature. This equipment could be mini-refrigerator-like special equipment such as va-Q-tainer (fig. a), envirotainer (fig. b), refrigerated container, etc. A va-Q-tainer is mainly used to transport vaccines, particularly for international shipments, while Envirotainer is widely used in pharmaceutical industries for cold chain products. In an ERP or Transportation Management System, the equipment is configured as master data to manage it in the system.
2. Packaging Material - Companies manufacture thermally insulated packaging products such as wrapping material, foam, thermal pallet covers, thermal box liners, thermal pouches, thermal cold packs, etc. Proper packaging helps minimize the risk of product contamination and ensures energy-efficient product storage along the cold chain.
3. Quality Assurance by Monitoring - Temperature-sensitive cargo requires an efficient monitoring system to check environmental parameters like humidity level and temperature reporting from time to time. IoT devices and sensors play an essential role in transmitting required parameters for monitoring.
4. Means of Transport - Cold Chain products are transported via road, rail, air, and sea. For example, refrigerated trucks carry ice cream, va-Q-tainers carrying vaccines are shipped by cargo airlines, and refrigerated containers via ships.
5. Product Handling during Transportation - Product handling of cold chain products is critical at various touchpoints within the supply chain. Temperature is the key to handling cold chain products. Some of the standard practices followed include pre-chilling trucks before loading the products, setting product evacuation procedures, in case of redundant equipment failure, 24/7 temperature monitoring in cold rooms, or having trained personnel to certify cold rooms.
6. On-time Delivery / Customer Commitment - The pandemic has emphasized the importance of on-time delivery of vaccines and other lifesaving drugs and equipment. However, cold chain solutions are widely used across industries, including fast-food chains like McDonald’s, KFC, and Domino's. On-time delivery is a critical KPI and an integral part of customer commitment. Depending upon the demand of the restaurants, trucks are arranged well before the raw materials are ready at the manufacturing center. While veggies are cut, the dough is prepared, or the chicken is marinated to perfection, the transportation processes begin with pre-chilling trucks at the required temperatures to load the final product and facilitate its seamless movement across the supply chain.
7. Miscellaneous Compliances - Freight forwarders specialize in the paperwork required for international shipments. Generally, shippers or manufacturers use freight forwarders to manage custom compliances related to cold chain movements.
Top Trends in Cold Chain Logistics Management
Cold chain logistics processes primarily focus on maintaining quality and necessary mandates. The solutions must be more global and holistic in nature when it comes to parcel shipping and transporting perishables. We’ve observed the following few trends that govern the movement of perishable commodities to ensure a seamless logistics experience.
- Less than Truck or Container Load - Optimizes cold chain supply chain costs so that a shipper pays for only the required space for cargo. Booking a full-load temperature-controlled container (FCL) or full-load truck/trailer (FTL) can be expensive when there is insufficient cargo.
- GPS (Global Positioning System) - Companies install GPS devices in vehicles to track temperature-sensitive cargo in real time.
- Geofencing - A geofence is a virtual fence or perimeter around a physical location like a plant or warehouse. Like an actual fence, a geofence creates a separation between that location and the area around it. A truck entering or leaving the plant premises can be automatically tracked through geofencing. Geofencing can eliminate the need to maintain manual log files and are set up both at source and destination locations for automatic tracking.
- Last Mile Solutions - Shippers need to track orders delivered at doorsteps, and companies are willing to go the extra mile for the same, even if it means paying extra for tracking. The last mile solution involves technologies such as mobile app solutions, and control tower analytics, and is backed by enterprise-packaged solutions. (e.g. - S/4HANA, ECC, SAP TM, Oracle OTM, etc.).
Innovative Cold Chain Solutions:
The Last-Mile Suite
ArchLynk implemented a state-of-the-art cold chain supply management solution for a leading food service company specializing in Quick Service Restaurants or QSRs. QSRs have stringent timelines to serve high-quality dining experiences to end customers. For example, it could be home delivery of pizzas within 30 minutes or in the room dining experience within 5 to 10 minutes of service time. Thus, speed and quality are of paramount importance for such restaurants.
Our program aimed to achieve several organizational goals. The primary ones related to the supply chain are as follows:
Technology
- SAP-TM (9.6), seamlessly integrated with ECC 6.0, helped the organization to achieve route optimization. The transportation proposals generated from the TM optimizer provided optimized routing solutions. The business could either accept the proposal from the TransportationManagement System (TMS) if they had adequate resources available in hand or plan manually. However, the TMS primarily proposed better routes than traditionally managed processes.
- We leveraged SAP’s Event Management module and IoT devices to track vehicles, report events and delays, and raise alarms in case of unexpected disruptions. If the door of a cold chain truck is open for an extended period, IoT devices detect and send an alert. Alerts can also be generated under other circ*mstances of harsh acceleration, high speed, temperature alerts, etc.
- The last-mile solution aims to track the goods until they reach the end location or end customer's doorstep. It also checks if quality standards set by shipping organizations or customer requirements are met. We developed three Apps on SAP Mobile Service Client to manage the end-to-end tracking:
1. The Distribution Center App used by shipping organizations assists in a host of activities.
- Manage the loading of the temperature-sensitive food items
- Call the driver
- Ensure pre-chilling
- Digitally seal the items to be opened only at the designated destination
- Report actual loading and departure times and attach important documents relevant for transportation
2.The Driver App is the most sophisticated of all the apps.
- The app can work online and offline to cater to situations where the internet may not be available when the vehicle is in transit. The driver operates the App in offline mode and the information gets updated to the TMS when the internet is restored
- The driver receives map-navigation assistance from the app and can report unexpected events like a flat tire, heavy traffic, etc
- The driver can attach important documents to the app and doesn’t need to carry physical paper copies
3. The third App is the Destination App, which in this scenario is a store or restaurant.
- The restaurant gets notified beforehand of the time the truck will arrive at the premises
- The unloading activities start well beforehand to save time
- Geofences mapped provide visibility into when the vehicle arrives or leaves the destination
- The goods are received after breaking digital seals using a secured code
- There is a provision for reporting a shortage if the quantity of goods loaded and unloaded does not match. The difference directly flows into the TMS, and the shortage is replenished in the next delivery
- We also made video tracking available to check how well the driver or co-driver operates the vehicle. Video tracking also reports and alerts if drivers are changed at the end of designated shifts
- The Last-Mile Suite Control Tower is based on SAC (SAP Analytics Cloud) and IoT data provided vehicle tracking information over a map. This enables the Country Head of the Supply Chain to view how transportation is carried out in real time over the entire country. Similarly, the Head of the Supply Chain of a specific region can also view transportation and vehicle tracking of that specific region.
In addition to the control tower, several KPI reporting dashboards were developed, such as:
- Cost Dashboard - Reports measuring budget utilization, cost per trip, relevant cost breakups, etc.
- Driver Performance - On-time compliance, turnaround time, reefer compliance, temperature compliance, speed limit, harsh acceleration, service time, etc.
- Vehicle Utilization - Weight or volume utilization for a cold chain vehicle.
Temperature-sensitive supply chains are rapidly evolving across modes and regions as consumer preferences, weather conditions, infrastructural developments, and advanced technology continues to transform how temperature-sensitive cargo is stored and transported under critically stringent conditions. Global trade lanes are witnessing an ever-growing demand for cold-chain solutions for perishables such as agricultural produce, frozen food, seafood, chemicals, and pharmaceuticals. With advanced supply chain visibility solutions, it has become possible for businesses to have adequate visibility into the movement of critical cargo and control temperature, humidity, light, and shock. There is massive potential in the market for shippers, carriers, logistics service providers, and technology service providers to present cold chain solutions that support the industry’s future growth.
Request a Demo of the Last-Mile Suite
We’ve built the Last-Mile Suite thatprovides complete planning, inventory management, and visibility solutions across the last-mile delivery process. The Suite consists of three role-based apps, a control tower, and KPI reporting dashboards that can aid LSPs, Pharmaceutical Companies, Restaurants, Hospitality Companies, Chemical Companies, and Consumer Packaged Goods Companies. Our solutions can effectively solve challenges related to high SLA, delivery compliance, efficiency, and optimization requirements. We can help businesses solve poor visibility in last-mile delivery processes, enable seamless integration between multiple systems, and effectively manage quality control challenges in the cold chain. Speak to an expert today to learn more about our Last-Mile Suite.
