SUPPLY CHAIN RISK MANAGEMENT IS BACK
The world is getting riskier – and the most advanced supply chain leaders are getting smarter about risk. Is your supply chain risk – ready?
As we know, more global companies questioning how to assess and manage these risk and prepare their supply chains accordingly. Which precautionary measures make sense, and how much do they differ by industry? With conducted research by interviewing supply chain managers across Europe to understand how they assess risks, what they do prepare, and how they respond to disruptions.
Risk On The Rise
Natural disasters are particularly dramatic illustrations of the difficulties facing supply chain managers. Even in a comparatively begin year, suc as 2019, global losses due to earthquakes, floods, fires and the like reached US$ 150 billion. But dramatic spikes are happening more often, with nearly US$ 350 billion in losses recorded in 2017. These high costs, in combination with long recovery times, have triggered many companies to reassess their supply chain strategies and footprints to make them more resilient to any kind of disruption (figure 1), from Mc Kinsey & Company.
How Advanced Companies Manage Supply Chain Risk
The degree of professionalization of supply chain risk management varies widely. Many companies still follow a more-reactive approach in responding to supply chain disruptions. That said, almost all the companies that surveyed diversify their operations and implement multi – sourcing strategies wherever feasible and economically justifiable. Working closely together with their suppliers and performing regular supplier audit is part of their general business practice. On an ongoing basis, they monitor the most relevant risks – such as regulatory changes or changing customer demand. But relatively few invest much time and money in automating any of these activities. When hit by sudden supply chain disruptions, they build temporary task forces to manage the issue on an ad hoc basis. In some cases, precious line is lost due to insufficient preparedness. By developing and assessing scenarios with different probabilities for pre-identified risks, the most advanced organizations can make high – level impact calculations that enabled better prioritization. Accordingly, prioritization is based not only on financial factors, but also on business specific factors, such as regulatory and strategic considerations and the company’s specific risk appetite. Supply chain risk leaders develop set of reactive and proactive response strategies, and foster general risk awareness among their employees by creating an openness to address potential shortages and failures.
Creating Supply Chain Resilience
In sight of increasing business complexity and growing overall uncertainty, establishing a systematic supply chain risk management approach becomes more and more relevant. Many companies relying mostly on reactive measures today want to improve their supply chain risk management capabilities – and say they are willing to invest more time and resources to do so.
Digital Supply Chain Transformation with a Human Face
Increasing supply chain resilience is a leading theme for many globally operating companlies with complex operations. Based on the experience, to suggest a four step that can be tailored to a company’s needs based on its individual starting position. Less – advanced companies will typically start by concentrating on establishing an end-to-end process first and their more-advanced counterparts may instead focus more attention on advancing steps 3 and 4.
- Identify the most relevant events and risk threatening to disrupt the company’s supply chain operations.
- Define possible outcome scenario and assess their high level impact. Depending on the level of exposure and magnitude of the impact, the company prioritizes risk for targeted attention.
- Develop response strategies for prioritize risks. It is essential to create an unbiased process to decide where to invest and how to prepare. A systematic calculation of business cases is the foundation for these investment decisions. The trade-off between investing in prevention versus taking the risk of being hit when unprepared – resulting in severe disruptions and losses needs to be quantified. Different dimensions important to the company need to be incorporated to create a meaningful business case, otherwise it is difficult to get the required funding for risk management.
- Finally, supply chain risk management needs to be incorporated into regular decision-making and planning processes. Embedding risk-management capabilities as a regular ingredient of business decisions in operations is the first step towards creating a true risk culture and a resilient company.
A systematic classification of risks and development of a related response strategy, is essential to improve supply chain resilience strategically – while keeping required investment to a minimum. A simple framework can help by classifying risks on two axes: the vertical estimates to what extent a risk can be anticipated, while the horizontal quantifies the risk expected impact (figure 2), from Mc Kinsey & Company.
Low-impact risks that are hard to anticipate, such as the bankruptcy of an individual supplier or a localized conflict in the country without major operations can be accepted or avoided to a certain extent by diversifying operations. Systematically implementing a dual-sourcing strategy, through nominating new suppliers or negotiating a second source of supply from the same supplier, help mitigate this risk category.
High-impact risks that are hard anticipate, including natural disasters, terrorist attacks, or cyber attacks, can be managed by building strong crisis management capabilities and resilience throughout the system. A supply chain risk management team can introduce a systemic risk monitoring process which can be enhanced by regular scenario planning exercises. Through keeping healthy reserves for parts with long recovery times, companies can prevent some supply chain disruptions. Another way to mitigate risks which are difficult to anticipate is transferring risk to other parties. Taking out insurance and introducing risk-related contact language are possible answers.
Low-impact risk that are relatively easy to anticipate, such as labor disputes, regulatory changes, or changes in customer preference (for minimal plastic usage or increased product sustainability, for example), can be managed proactively by increasing the robustness of the supply chain system. The most important single measure, though, is solid training of the workforce to handle everyday risk. Encouraging employees for voice concerns about possible defects and disruptions helps create a general risk awareness as a first step to managing disruptions. IT systems and tools can then help to continuously monitor disruptive trends and events.
High-impact risks that are relatively easy to anticipate, including Brexit, US-China trade regulations or de-carbonization targets, need the most attention. A systematic review of the supply chain setup may be advisable. Possible response strategies include redefining the sourcing strategy by, say, raising the share of local suppliers or revisiting the manufacturing footprint by moving some manufacturing operations out of certain areas. Establishing CKD operations in countries with high import taxes on finished products can be another option. The review of the inventory build-up strategy helps optimized service level by increasing safety-stock levels for critical components which can’t be sourced from alternative locations. In some cases, preparing for changes in demand can be appropriate answer.
HOW DIGITALIZATION OF THE SUPPLY CHAIN WILL REDUCE GLOBAL FOOD WASTE
From GCCA Book Directory – by Leuven, Belgium – The scale of the global food waste problem is staggering. According to reports, 1.6 billion tons of food are lost or wasted every year, equating to a total value of $1.2 trillion being wiped from the supply chain. With one-third of the total amount of food produced globally being misused, the industry needs to look towards innovation and digitalization to combat this ever-growing trend.
Through embracing technology and digitalizing the food supply chain, a move can be made towards reducing the amount of food waste and loss within the industry. Not only that, but it can also help ensure there’s enough resource to sustainably support the future global population.
With the UN’s Sustainable Development Goals setting a target of halving food loss and waste by 2030, I’ve looked at how the digitalization of the supply chain could help decrease global food waste.
The need for innovation to reduce waste
Although food waste is evident across the entire supply chain, the vast majority comes at the very beginning (during production) and at the very end (during consumption). The former of these is more common within developing countries, where the infrastructure is of a poor standard and cannot handle the food thus creating waste, whilst the latter is more pronounced in developed countries with waste being caused by both retailers and consumers.
According to the Boston Consultancy Group (BCG), the amount of food waste createdin the supply chain is set to rise 1.9 per cent from 2015 to 2030. You may think this is a small rise, but when put into
perspective with the current 1.6 billion tons wasted every year, this figure will increase by 30.4 million tons.
To combat this increase in waste, the food supply chain needs to go under a digital transformation. From production and processing to the retailers themselves, systematic changes are required in food supply chain management to help everyone utilize this precious resource more efficiently and cut back on the amount of waste we’re creating as a society.
Utilizing IoT in the supply chain
Through having better levels of communication across the supply chain, the amount of food waste produced can be reduced. Each aspect of the supply chain must be in constant contact with one another to ensure our resources are managed efficiently.
This is where the Internet of Things (IoT) can support and improve supply chain efficiencies. Based on having interconnected and interrelated systems and processes, IoT allows each aspects of the food industry to have access to key data around the supply, production and management of produce, which can help reduce the amount of waste created. Without the wider adoption of IoT in the food supply chain, the levels of food waste could increase by 50-90 per cent as a result of several combined factors, such as the increase in food demand due to the ever-growing population.
By allowing all stakeholders within the supply chain access to key data shared across integrated systems, processes can be optimized further along in the chain to maximize how the produce is handled. For example, a bad batch of apples with a high percentage of internal browning would require a specific equipment set up and would need to be fine-tuned to ensure the maximum value can be extracted from the apples. It is believed having this connectivity could save the supply chain up to $60bn in waste.
Through having this pre-warning of any information regarding a batch of produce, farmers can not only optimize their yields by reducing the risk of waste, but the other stakeholders can also plan accordingly to try and prevent the cause of waste.
Having this ability to share data through IoT can also help reduce waste from a consumer standpoint. Retailers could use the real-time data in stores to showcase when the produce was harvested or picked and offer insights into the projected “sell by date”. This can educate consumers further on how long they have to eat the produce, thus helping reduce food waste through the implementation of technology.
Using innovation to improve current infrastructure
As well as utilizing IoT, the supply chain can also use digitalization to help improve the infrastructure it currently has in place.
Cold chain plays a huge role in the food industry creating waste, mainly due to poor infrastructure – in India, for example, $14bn is lost every year through poor cold chain facilities. However, implementing innovative and efficient systems can go a long way in addressing the food waste issue – particularly in developing markets. By deploying more advanced cold chain solutions within the emerging markets, which share the data across the supply chain through IoT, it could prevent large-scale food loss and waste.
The conditions can also change in cold storage, and temperature affects many sorting technologies, so the ability to link cold storage sensors to packing equipment can enhance performance.
But this is nonexistent in many emerging markets, creating poor food storage and transportation conditions early in the value chain that lead to large-scale food loss. Deploying more-advanced supply chain solutions—including cold chain in developing markets—could reduce the problem by $150 billion annually.
Investing in efficient sorting and grading systems is a key approach in helping the supply chain reduce the food waste created earlier in the supply chain.
We want to know everything about the produce. Everything from the weight and size through to the external properties and defects, and even the internal chemical composition to predict ripeness and longevity. But there are only two points when you can gather information on individual pieces of fruit: when it’s picked and when it is sorted. These are the critical data acquisition points.
KPIs need to be based around understanding the types of defect types and classes/grades per batch, to help create a complete map and total view of the produce. This, in turn can help build up big data, meaning every batch gives you new insights and allows you build a bigger picture, creating the ability to make even more informed data-driven decisions. Where appropriate, data can be shared and augmented to ‘context’, such as weather data or geo-tagging.
The final step is to layer artificial intelligence to start to understand previously unseen patters and even more efficient ways of working.
Although these KPIs tend not to be designed to help limit the amount of waste produce, utilizing sorting and grading technology can automatically support a waste sensitive environment by recovering any produce and reusing it for another purpose, such as cattle feed or pet food. This means that rather than creating food waste, an alternative, more suitable use is found. Lower quality fruits can be used for juices or pulped to become products such as guacamole or apple source, whilst starches can be used for medical purposes. All of these help us reduce waste and put the lower quality produce to better use.
Going digital to fight food waste
With the ever-rising stats around food waste, now is the time for the industry to adopt a more digitalized approach across the supply chain. Implementing integrated and innovative systems will allow all key stakeholders, from field to fork, to efficiently manage food and reduce the risk of waste at loss.
Digitalization won’t just help from asustainability aspect, but also help businesses drive their own profitability by improving processes and efficiencies. It becomes the answer to the push-pull paradox for commercial benefit and combating global food waste.
At TOMRA, we’re committed to creating sensor-based sorting and grading systems to help the supply chain win the battle against food waste. Through our systems, we aim to help food businesses maximize yields and ensure any produce can be recovered and reused, increase productivity with high capacity sorting and provide consistent high-quality food assurance.
We also understood that we must take the next steps. TOMRA Insight is our answer to connect our sorting and grading systems, extract valuable information on the sorting performance and the produce, and make it transparent to the food businesses. Incorporating this further into a digitalized supply chain will help to close the link from farm to fork in the future.
INNOVATIONS AND ADAPTATIONS IN THE COLD CHAIN,
By Nils Markmann
The rise of targeted therapies and the globalization of specialty pharmaceutical commercialization present a host of opportunities for manufacturers. The foundational premise is clear: More commercial and clinical trial drugs are being shipped to more patients in more countries than ever before. Healthcare is becoming more innovative and more accessible at the same time.
With these opportunities, however, come great challenges. The increase of global clinical trials for high-value cold chain products means that the stakes—and the costs—for each trial have risen dramatically. The distribution of specialty medications to emerging markets means that the total supply chain must be evaluated more stringently. The industry now operates in an environment where there is no “acceptable loss” of product or samples. As a result, global manufacturers must constantly evaluate the advances in technology, processes, and resources that keep cold chain products safe. They must remain vigilant over the growing and diverse risks in the supply chain and understand the need for increased expertise from their partners. They must stay focused on continuous improvement across all parts of their supply chain to ensure that drugs are delivered safely and effectively, while risks are mitigated appropriately.
Here, we explore three macro-trends in the global pharmaceutical supply chain—specifically the temperature-controlled supply chain—and key takeaways that manufacturers should consider as they work to drive new growth globally.
Targeted therapies and unique temperature needs
Pharmaceutical manufacturers have seen a significant shift in their development goals and processes. The pursuit of the next blockbuster, small-molecule product has given way to excitement around new, targeted therapies, biologics, and personalized medicines—all of which are driving demand for better temperature control in the supply chain.
Increasingly, there is a need for more than just cold shipping. Instead, there is an expanded need for a highly connected and functional supply chain. In fact, “cold chain” no longer accurately describes the full suite of solutions that manufacturers need. The industry is moving toward “temperature control” as the all-encompassing term, in recognition of the wider range of new temperature requirements for biologic products. From samples and biologics shipped at “body temperature” (close to 37 °C) to controlled room temperature (about 20–25 °C), all the way down to ultra-frozen products stored at -80 °C, the new spectrum of temperature needs makes it clear that the traditional cold chain (a range of 2–8 °C) is no longer sufficient to accommodate all product needs.
New temperature requirements necessitate new packaging solutions. It’s difficult to maintain product temperatures in a laboratory or storage setting, and the difficulty increases exponentially when products must travel at a consistent temperature across thousands of miles over the course of hours or days. The right packaging is essential to ensuring product integrity.
Fortunately, the options for packaging and monitoring technologies have expanded significantly in recent years. Semi-active packaging, including expanded polystyrene (EPS) and expanded polyurethane (EPU) systems, is still common and is often is the more economical choice for local, short-distance transports. Semi-active solutions are unable to regulate their own internal temperatures and require different packaging configurations seasonally, even within the same route. For this reason, semi-active packaging is best suited for controlled, short-haul routes. Many semi-active solutions are only intended for use a single time and must be discarded afterward, causing them to be somewhat of an environmental liability.
New options are focused on offering longer durations of temperature control with lighter materials that have a smaller environmental impact. Passive packaging solutions are more technologically advanced and provide proven temperature control over long distances. These solutions rely on specific engineering to create a highly stable interior storage environment. Independent testing indicates these solutions perform five to seven times more efficiently than semi-active solutions. Phase-change material (PCM), comprised of paraffin or salt-based solutions, allow for more precise temperature control to maintain product stability over long distances or through extreme climates. Many packaging manufacturers are now developing their own vacuum-insulated panel (VIP) containers, combined with PCM solutions, for easier handling and storage.
On the monitoring side, GPS technologies and tracking equipment that include automatic start-up and shutdown mechanisms (so they can be used safely on flights) offer a real-time view into a shipment’s status and data-driven peace of mind throughout a product’s entire journey.
Although monitoring technology can be a benefit, it can also be a disadvantage for some products. Manufacturers should partner with organizations that can help them find the solutions that align with their product-specific needs. Selecting too much technology (e.g., using a container with an electric-powered refrigeration system when a PCM-based solution would work), can create unnecessary expense. Selecting not enough protection can risk the integrity of a product.
Global clinical trials and expanding market presence
In tandem with the shift in the types of drugs being created, there’s also a shift in where drugs are being developed. It is estimated that pharmaceutical sales in Brazil, Russia, India, and China will grow to nearly a quarter of a trillion dollars by 2016 (1). There are more than 186,000 registered clinical trials taking place across the globe, and global pharma’s volume has more than doubled over the last decade (2).
New patient populations are needed to test the latest in pharmaceutical advances. Increasingly, regulatory bodies mandate tests need to be conducted within the specific countries in which manufacturers seek approval to launch and market a product. As a result, the importance of efficient, global clinical trials will increase dramatically in the coming years.
As the global market for clinical trials expands, there are significant hurdles that manufacturers must clear to ensure products arrive at the right place, at the right temperature, at the right time. Manufacturers and logistics partners often must navigate geopolitical roadblocks to maintain a high-performing clinical and commercial supply chain. Apart from global concerns in hot-button countries, manufacturers must consider all local, regulatory landscapes in which they do business. They must evaluate the existing capabilities in the market and disruptions in the supply chain to determine how all of these factors may impact shipping time.
Improper customs paperwork, for example, can delay or compromise even the most optimally packed shipments. Delayed flights, weather issues, or airport personnel strikes can cause product transport issues that could delay or even derail entire clinical studies. Manufacturers can avert these issues by deploying knowledgeable, trained logistics personnel within their global markets. Placed at varying locations around the world and operating within a proven infrastructure, these experts should be able to mobilize local knowledge and expertise on a real-time basis—substantially reducing risk of temperature excursions.
Global expansion may be the goal, but global support has to come along with expansion. When conducting clinical trials in emerging markets with time- and temperature-sensitive medications, manufacturers should consider working with specialty logistics experts in each specific country. Local, in-market knowledge of regulations and transport infrastructure can mean the difference between keeping the clinical supply chain moving and grinding a productive trial to a halt.
Focus on risk mitigation
The financial risks of mishandled shipments are fairly clear for commercial drugs that must remain temperature-controlled: lost sales and revenue, lost productivity, and lost opportunity to improve patient lives. The risks are no less severe on the clinical side, where transportation failures involving clinical product or patient samples could result in studies being compromised. Delays and other disruptions in trials impact the expected time to market for a product, potentially putting millions or billions of future revenue dollars at risk.
As a first step, it is crucial for manufacturers to identify the needs for all of their shipped products, especially those of high value. Meeting risk mitigation and quality objectives within the framework of an effective cost/performance strategy can be a simple matter of combining the right packaging fit with the right service fit for each individual application.
Beyond that, though, global manufacturers are also challenged with needing to understand worldwide political issues and infrastructure limitations that may impact logistics.
Take the following situations as examples:
Cambodia’s Phnom Penh International Airport has no freezer available and only one refrigerator set to one range that is neither qualified nor controlled. In conjunction with technological restrictions, clearing customs can take many days. It may be possible for logistics partners to refresh refrigerants, but there are no guarantees.In Laos, the rainy season lasts from August to September. With limited airport facilities, products can be left on the runway. Manufacturers can avoid unnecessary damage by sending products before or after the rainy season.With the growing population and spend on healthcare in Latin America, it’s an ideal location for a growth plan, but each country within the region has different regulations and resources.
Although conducting trials and commercializing in new markets represents opportunities to expand needed therapies to new patients, it also represents millions of dollars worth of risk when working with cold-chain products. Proactive planning—combined with a knowledgeable logistics partner that can help navigate global nuances—will help protect products, ensure that temperature controls are met, and increase effective use for patients.
A solution for every therapy
Manufacturers worldwide are investing more in their supply chains. A $15-billion increase in spending for global biopharmaceutical logistics is expected between 2012 and 2018 (3). As global predictive growth explodes, shippers and trial sponsors can expect an increase in regulatory and overall logistics complexities that foster in-market resources across the globe. The spend on cold chain logistics was more than $8 billion worldwide in 2014 and is expected to exceed $10 million by 2018 (3).
The rise of targeted therapies and solutions for rare diseases has created even more challenges for manufacturers, as the demand for personalized, high-value drugs with more active pharmaceutical ingredients (APIs), shorter shelf-lives, and strict temperature requirements increases. As products become more targeted, so will the logistics solutions. This trend indicates pharmaceutical companies are (or will become) more invested in supply chain operations.
Fortunately, sophisticated logistics providers are investing in new technologies and improving their capabilities in order to ensure they can successfully handle the most innovative new products on a global basis. As the supply chain continues to expand in complexity, the relationships between manufacturers and their logistics partners must also grow.
WHY DO YOU NEED A TRANSPORT MANAGEMENT SYSTEM?
A Transport Management System/Software (TMS) is a logistics platform that allows users to manage and optimize the daily operations of their transportation fleets. It comes under the subset of Supply Chain Management (SCM). Its primary function is to plan and execute the physical movement of goods
A Transportation Management System is also an essential weapon in any company’s arsenal. To keep up with the ever-changing business environment, a TMS is a necessity!
The right TMS can optimize your core operations and transform the way your business functions.
Here’s 10 reasons WHY:
A. IMPROVED CASH FLOW
A good transportation management software will help a business immensely in reducing shipping costs.
B. INTEGRATED PLANNING AND EXECUTION
The new generation transport management systems integrate smoothly with existing systems that are essential for managing the transport needs of a company
C. MINIMAL PAPERWORK
Automation of all accounts using a TMS will save precious time and money spent on bulky paperwork.
D. INVENTORY MANAGEMENT
Through TMS, businesses can monitor the lifecycle of orders and shipments in real-time and get status updates on each.
E. SUPPLY CHAIN VISIBILITY
Having this full operational visibility and access to real-time data from all systems is a huge plus. It enables managers to quickly act on any opportunities or resolve any issues that may arise.
F. OPTIMIZED ROUTING THROUGH POOL DISTRIBUTION
Order cycles have shortened and shipment sizes have shrunk. As a result, routing is more critical than ever.
G. TRACKING DRIVERS EN-ROUTE
Driver tracking enables users to assess the optimality of different routes taken by the drivers, which can help to generate a more efficient schedule.
H. ACCURATE ORDER FULFILLMENT
With a reliable transport management system ensures that shipping becomes more accurate.
I. IMPROVING CUSTOMER EXPERIENCE
TMS will bridge the gap between order management and warehouse management systems. It will help to consolidate all customer orders to find the best carrier at the lowest possible price. A win-win for both consumers and businesses!
J. REPEAT BUSINESS AND REFERRALS
The right TMS saves your time and money. It enhances your company’s overall productivity and efficiency.
FIVE IoT APPLICATIONS IN LOGISTICS & SUPPLY CHAIN MANAGEMENT, Written by Brian Ray,
Whether you’re in manufacturing, retail, distribution, or shipping, planning and managing the flow of raw materials and finished goods through your supply chain is a challenge. Materials are often improperly shipped or stored, which can damage sensitive goods. Plus, the sheer size and capacity of a large operation can lead to disorganization in a manufacturing warehouse or distribution facility.
One of the best ways to decrease material waste and improve logistics is with the use of real-time location systems (RTLS
In the past, supply chain tracking and monitoring solutions—like ultra wide-band (UWB) and infrared technologies—required significant infrastructure, which came with a major installation headache and a significant price tag (often $10 per square meter). Today, there are asset-tracking solutions on the market, like AirFinder, that can be installed and operated for 10 times less than UWB and infrared.
Before we get into more details as to what you should look for when selecting a supply chain management IoT solution, let’s look at several use cases of IoT applications in logistics.
1. Track deliveries from the vendor to the manufacturing facility.
If you work with numerous U.S. vendors to create a single component for your device—say, a network of sheet metal vendors for an auto manufacturer—RTLS can be used to track pallets of this component from every vendor, from the time the pallets are packed until the time they enter your manufacturing yard. This way you’ll know well ahead of time if a shipment is delayed, allowing you to keep production running smoothly with your “Plan B.
2. Track deliveries and materials around your manufacturing facility.
Truck drivers have little to no incentive to ensure your goods are delivered precisely where you’ve instructed, which often leads to lost or misplaced shipments. If you use RTLS, you’ll know precisely where pallets have been placed.
3. Track deliveries and materials inside your manufacturing facility.
Materials moved inside a facility for assembly or shipping often fall prey to what we call the “flat spot problem”— e.g. being left on any flat surface available. Misplaced materials can lead to slower production times, employee frustration, and, ultimately, customer dissatisfaction. With RTLS you know the location of tagged materials, like a specialty test fixture, at all times.
4. Monitor sensitive goods to avoid damage or loss.
Some factories regularly receive shipments of perishable or sensitive goods that only stay fresh for a short time, and/or require specific environmental conditions to maintain quality.
Using an IoT application for logistics, you can tag a crate of eggs or a barrel of milk and monitor the humidity in the storage area, the temperature of the product, and the shock and vibration levels these items experience during shipment. You can use this information to notify truck drivers of damaged shipments long before they arrive at your factory, and get a new shipment on its way.
5. Monitor assets to mitigate risk.
If you’re involved in the transport of goods from point A to point B, you need to know where your vehicles are at all times for safety and compliance reasons. Without a tracking system, it can become easy to make erroneous assumptions. For example, you might assume that Bob is with his assigned vehicle—but what if he took a different vehicle that day? Or what if that vehicle is in the shop and he’s in another, and you’re simple unaware? This type of tracking system allows you to ensure you know where each vehicle in your fleet is so you can hold up your end of the supply chain.
SIX QUESTIONS To Ask Before Selecting An IoT Application For Logistics & Supply Chain Management
- What level of accuracy does the system allow for?
Do you need room-level accuracy, or more specific location capabilities? This will make a difference in the kind of system you select. For some systems (like AirFinder), a higher number of reference points can be added to increase location accuracy.
2. How much infrastructure is required?
If you’re building new construction, systems like infrared or WiFi-based RTLS may work well for you. But if you’re retrofitting a system in your current building, you’ll want to select RTLS that is easier to install.
3. What is the total cost of ownership?
The total cost of ownership is one of the most important considerations for manufacturers looking to implement an IoT-based monitoring and tracking solution. Battery life, tag cost, power consumption, and employee training all come into play when calculating cost, so evaluate them all when considering a solution.
4. How much does each tag cost?
Tag cost varies dramatically. Passive RFID tags can be pennies on the dollar, Bluetooth low energy (BLE) tags can be obtained for less than $15, and WiFi tags are typically around $40-$60. The tag cost, of course, makes an impact on whether or not an IoT-based logistics solution will work for you or not.
5. How long is the battery life for each tag?
Battery life impacts affordability and maintenance. AirFinder tags, for instance, do not beacon continually, so they last up to three times as long as traditional BLE tags.
6. Is the system secure?
When you implement an IoT application of any sort on your network, keeping your data secure is a top priority. The AirFinder system uses multiple layers of device and data security to ensure your data and IT networks are safe. BLE data is encrypted end-to-end using modern AES TLS data transport methods. A “stand-alone” data network, which can be connected via cellular, eliminates IT network vulnerability.
COLD CHAIN MARKET
HOW TO MOVE YOUR BUSINESS INTO THE NEXT DECADE
Over the next five years the cold chain market is expected to grow at a compound annual growth rate of 11%, boosted by the expansion of international trade and the introduction of innovative new operating models that are being employed across many industries, from supermarkets through to the pharmaceutical industry.
As an essential piece of the supply chain puzzle, cold chain involves the storage and transportation of temperature sensitive or perishable products. Having the right tools for the job in these often-harsh environments can be the difference between a successful business and an unsuccessful one, due to the need to be as efficient as possible to avoid wastage or spoilage.
Closer to home growth will come from exploiting the market on the doorstep, by reinventing what the consumer already knows and repackaging it for the modern way of living. The campaign is geared at changing perception, not only about how convenient and healthy frozen foods can be, but also how friendly it is to the average consumer’s food bill, given the reduction it makes to waste.
Overseas expansion will be the big opportunity as the buoyant market is pushed by demand from developing nations such as India and China. With such a rising demand for specific temperature controls relating to food and healthcare products, it’s clear that now is the time to reassess your business and pinpoint where productivity gains can be made to capitalise on the increased demand.
THE EVOLUTION OF MOBILE DATA CAPTURE TECHNOLOGY
In a cold storage environment, making productivity gains, creating more efficient operations and managing costs can all be addressed by a thorough review of the data capture technology in use.
The bottom line is that the effectiveness and reliability of a mobile device will fall along with the temperature, unless a device is specifically designed for the conditions it is expected to perform in.
The list of problems that mobile devices must face in a cold storage environment is long, and can include: LCD screen fogging up, batteries struggling to cope with the cold, frost obscuring screens, frost covering a barcode scanner’s optical port, reduction in drop rating/IP, reduced display refresh rates and ice on the keyboard.
When a device is frequently taken in and out of cold areas, the temperature can affect almost all of its components. However, the end result is the same – reduced user productivity and if you are not careful employee engagement drops too.
The good news is that over the last five years there has been an abundance of investment in technology research and innovation – today’s modern devices have been enhanced to maintain efficiency in temperature-controlled environments like never before.
The changes can often be simple, such as adding big buttons to rugged handheld terminals that can be felt when using thick gloves, through to more complex improvements, such as internal heat sources and seals designed to prevent condensation and battery draining due to the cold temperature. These innovations are now commonplace and can make a huge difference to cold chain operations.
It’s also vital to consider your operational model today and where you think it will be in three or five years time when planning any investment in new devices. If you want to gain a bigger slice of the cold chain market, then you have to be prepared to grow with it. As well as the technical features of the devices, think of the practical implications too. Will the warehouse grow and if so will your people do more miles moving around the warehouse, and will they carry the device or will it need to be mounted to a vehicle? How will the devices cope with wear and tear, especially as demand increases? How will they cope with rapid temperature change if they are taken into different environments? The technology exists to manage these scenarios, but the trick is to determine the fewest variations in order to optimize the investment.
There may also be an operating system issue that needs to be addressed, depending on your current situation. Will software automatically update so that you have the latest version, how can you ensure all of your employees are using the same version? Do you want to use a system that your employees are already familiar with? How will this impact training? Integrating new technology into a fully functioning, and in many cases an increasingly busy, cold store environment is a challenge. But making the right decisions for your business can pave the way for a successful future.
A logistics expert who understands your business challenges and can help you refine and establish your operational and strategic objectives and make the right choices regarding the devices needed. They can also help with deployment and with any training that may be needed to work with specialist devices.
MOBILE TECHNOLOGY ON THE ROAD
As well as ensuring operations run smoothly inside the warehouse, it’s outside on the road where many new technologies can help to optimise a cold chain business.
All too often businesses falter when the pressure is on, and the link that usually breaks first is the one between the warehouse and the lorry. In a cold store environment, mistakes made while loading a vehicle can put standards at risk and slow down the whole operation. When dealing with goods that must be kept at a certain temperature to preserve them, or for hygiene and safety reasons, there can be no weak link or the whole operation will fall down.
With online grocery expected to double to £1.1 billion by 2018, fuelled by the rise of click and collect services, it’s clear that success will depend on slick stock management and tight turnaround times.
Devices used in vehicles and lifts will also be susceptible to similar problems faced in the warehouse. Although similar solutions are also available, it’s another link in the chain that needs to be understood and dealt with properly if gains in productivity are to be made.
THE MANAGEMENT SYSTEM
To cope with the expansion expected over the next five years, cold storage operators will need to consider the demands on infrastructure and how their warehouse management system can support the mobile devices available.
As demand increases, along with the pressure on maintaining temperature, a system that offers a real-time view of inventory and orders can allow warehouse managers to be confident in the ability of their business to deliver – and feel assured when taking on new contracts to grow their business.
Giving employees the tools to do their job, backed up by a solid warehouse management system, will not only boost productivity and efficiency but can also work wonders for morale too.
At an early stage, those involved in cold chain should map out the technology they require to capitalise on the expected growth – and create a roadmap to make it happen. It’s easy to think it will be complex to change technology, and indeed it can be if you are replacing outmoded technology, but with the support of a logistics expert it can be a smooth process. A good logistics partner will look at the situation as a whole and design a solution that can be phased-in according to businesses readiness, finances and capability
THE INGREDIENTS FOR SUCCESS
Any logistics company involved in cold chain will inevitably look at the expected growth in the industry and consider the changes it needs to make to take a slice of the market. The truth is that many more issues will apply to each individual business than can be listed here. Ultimately, it comes down to one central theme – what is the opportunity and what will it mean for our bottom line if we do nothing, something or change completely?
Answering this will drive the change that’s needed and open up further opportunities in the market – or even the opportunity to serve existing customers in a more efficient manner.
Identifying how much ‘stretch’ there is in the existing model is one of the first tasks that should be completed. By mapping out your ambition, and then by doing a gap analysis of what you need compared to what you have, you’ll be able to establish the right path to go down.
You’ll also be able to assess the cost versus the opportunity and the roll out plan – a phased implementation that uses a combination of existing technology and new technology, or a complete replacement. The assessment should also help you see where you’ll achieve the biggest gains and how you should prioritise your implementation.
It is vital the strategy is well planned out. This can be an enormous undertaking so it’s very worthwhile to work closely with a technology specialist, who can help assess the gap you need to close today and help you anticipate the future.
A good partner will use this gap analysis to guide a logistics business to the solution that can maximise the opportunities the market presents today and leave the door open for managing the new opportunities that developments in technology are likely to bring about.
Cold storage and logistics is a dynamic industry and the potential for growth is great. A strategy underpinned by technology is the best way to exploit it and turn opportunity into profit.
Source: Bizibl Group Limited, Registered in England 09091156, 26 Bridge Road East, Welwyn Garden City, Hertfordshire, AL7 1HL