By David Parker, Chief Evangelist
Although increased globalization has made the relative distance between different parts of the world much smaller, the physical separation between regions and countries is still a challenge when it comes to global supply chains. Products typically travel thousands of miles to reach their destination, often involving a complex web of air, trucking, rail and sea transportation methods. This puts a lot of pressure on companies to log, maintain and report product temperature, humidity and location information. The farther the separation, the more likely freight can be damaged or spoiled during its complex transport journey.
Cold chain logistics, in particular, is a “hot” topic these days. Put simply, cold chain logistics involves the transportation of temperature-sensitive products along a supply chain using thermal and refrigerated packaging solutions to preserve product quality. It’s a lucrative market; according to Statista, the global cold chain logistics market was worth almost 160 billion U.S. dollars in 2018 and is expected to exceed 585 billion U.S. dollars by 2026.
To ensure that temperature-sensitive products don’t spoil or get damaged during transport, companies need accurate, reliable tracking information. In the past, cold chain companies were using a variety of siloed data sources to get supply chain information. This included everything from using manual methods such as hand-held RFID bar code scanners to error-prone passive temperature measurements (meaning you don’t know when or where a temperature excursion occurred), and, when you needed to find out where shipments were, you relied on good old email and phone calls to get the needed information.
To improve product safety, efficiency and compliance, companies need greater visibility into their supply chain. Without supply chain visibility, it is difficult for cold chain companies to track the location and condition of their products. With cold chain visibility, managers can get real-time visibility and location-based insights into their temperature-sensitive products, whether they’re in the processing plant, in transit or in the yard. This increased visibility also provides insight into the carrier (3PL/4PL) who is transporting the product at a particular point in time. Armed with this information, a company can quickly identify which carrier is transporting the product when damage occurs. This valuable insight into the ‘Chain of Custody’ allows companies to reduce losses due to penalty claim payouts. A digital visibility solution also includes additional analytics that can provide further insight, such as:
- On Time – In Full (OTIF)
- Excursion Types
- Excursion Types by Route
- Best/Least Performing Route/Carrier
Managing cold chains for pharmaceutical and food product companies has grown more complex as industries become increasingly globalized. Here’s a look at the main challenges in cold chain management for these industries.
Pharmaceutical Cold Chain Challenges: Temperature Excursions
The biologics supply chain is rife with challenges, ranging from figuring out how to prevent temperature excursions (defined as any temperature reading outside recommended ranges from the manufacturer’s guidelines) to achieving 100% compliance with FDA regulations. As the drive to develop more innovative drugs accelerates, the need for reliable temperature-controlled supply chains has become a number one priority. According to The IQVIA Institute for Human Data Science, the biopharma industry loses USD$35 billion each year due to temperature-control failures across their supply chains. These temperature excursions jeopardize drug quality and stability. In addition, since pharmaceutical products are shipped globally to reach their markets, companies must ensure that they comply with each country’s regulations and maintain the strictest requirements.
The biopharma products market is set to grow to USD$90 billion by 2023, according to Precision Medicine Market. As the pharmaceutical industry continues to evolve, the need for reliable temperature-controlled supply chains becomes increasingly important.
Fortunately, there are technologies that can optimize and streamline cold chain logistics and help provide greater supply chain visibility. Maria Nieradka addresses this issue in the eBook Creating a Resilient Supply Chain, stating, “There are tremendous opportunities for digital transformation throughout life sciences organizations, such as improving finance, increasing visibility in supply chains, developing new products and engaging better with customers and patients.”
A biotech company was recently able to save $10-15M every year after adopting a digital visibility platform that enabled them to get real-time location and inventory tracking of their biomedical material containers. And with a click of the button, they were also able to provide the FDA with a complete record of product movement history.
Before deploying the platform, they had no method for tracking dwell time in each zone so that samples didn’t sit too long before reaching their temperature threshold. Temperature excursions meant the difference between success and failure, profit and loss. They lost millions of dollars every year due to product re-testing, spoilage and waste.
Food and Beverage Cold Chain Challenges: Spoilage
The food and beverage industry is also leveraging supply chain visibility platforms to transform their supply chains.
The main challenge in the food and beverage supply chain is that perishable ingredients and finished products must be continuously tracked for location, temperature and humidity across the entire cold chain to avoid spoilage, waste and costly recalls.
Globally, the food industry churns 1.3B tons of waste, while the average plant operates at 30-60% idle capacity. An increase of 8º F can reduce shelf life for products by seven days and recalls can cost companies up to $42M in penalties. Verifying food and ingredient conditions as well as transaction handoffs lowers compliance costs and food waste, while increasing product quality. Deploying more advanced supply chain solutions can reduce the food waste problem by $150 billion every year, according to the Boston Consulting Group (BCG).
A digital visibility platform can enable companies to verify food and ingredient movement, history and transaction handoffs across stakeholders for product quality and compliance mandates. As an example, a food and beverage supplier wanted to track raw ingredients starting at their farm, all the way through manufacturing. Their challenge was that they needed to continuously track the location, temperature and humidity of their perishable ingredients and finished products across the entire cold chain to avoid spoilage, waste and costly recalls.
The company deployed a digital visibility platform to track the location, temperature and condition of their products and raw ingredients. Once their raw ingredients arrived at the factory, they were tracked throughout docks, manufacturing, staging and storage areas for quality monitoring and control. The temperature, location and condition of perishable goods were continuously monitored, and dwell time thresholds were communicated in real time. This increase in visibility helped them minimize the impact of recalls, manage the movement of their perishables, reduce global food waste and increase retail opportunities.
Supply Chain Visibility is Key to Mitigating Cold Chain Risks
With advanced solutions like Cloudleaf’s Digital Visibility Platform, it becomes possible to get location and condition data all from one source in real time. Modern technologies such as IoT, advanced analytics, AI and machine learning are used to create a digital twin of your supply chain, processing billions of events every second to give you diagnostic and predictive insights including real-time location, condition, utilization and anomaly detection.
Cold chain products require constant monitoring and attention to ensure their stability and viability, especially as more sensitive products bring logistics complexity and expanded risk. Ensuring that pharma and food/beverage products retain their integrity and safety is a challenge that requires increased visibility into your entire supply chain. By deploying a digital visibility solution, you can find out the temperature, humidity and location of your products all on one easy-to-deploy platform, in real time, giving you the information you need to identify and maintain the integrity of your products.