5th February 2019
Spoilage: one word that highlights the impact of risk not being effectively managed across a cold chain. It’s a universal problem too judging by the numbers:
- For food retailers it’s estimated that a third of all food produced globally goes to waste (with most of the losses coming from spoilage on its way to being consumed).
- In pharmaceuticals, there are $35 billion in losses associated with ‘temperature excursions’ in healthcare alone.
Risk of course is not going to go away. In today’s intermodal, end-to-end cold chain it’s simply impossible to expect a problem-free operation. That’s why for supply chain managers it’s more about identifying ‘risk potentials’, and assessing each interaction point for a product – be it ports, transfer facilities, distribution centres, and customer deliveries.
The trouble here however is that this can be easier said than done, due to:
- The sheer length of cold chains– particularly in food distribution (for example it’s estimated that the average item of produce in the US travels 1,500 miles from its source)
- A lack of visibility at various stages of the journey – and not just in temperature levels, but also into the behaviours and procedures being followed by those involved
Knowing what to ask
But what is the best way to identify and quantify risk across each key phase of your cold chain? Well, to start with, it’s about asking the right questions – and not resting until you get the right answers each and every time they’re asked.
For example, would you be confident in your organisation’s ability to answer yes to all of the following queries:
Phase 1: Point of origin
- Product stability – are all products being shipped in a manner that guarantees they will be maintained within an acceptable temperature range?
- Temperature control – are we using the most suitable insulation materials and refrigerants for the loads being transported?
Phase 2: Transportation
- Modal choice – does our selection factor in route selection, potential congestion, ambient or outside temperatures etc.?
- Monitoring and escalation processes – are these sufficient enough in scope, and available to all partners where and when we need them to be?
Phase 3: Customer
- Delivery protocols – are the standards we have in place for the ‘last mile’ sufficient to dictate key activities such as pre-chilling and door openings?
- Contingency planning – are we able to quickly detect a potential problem, and do we have the processes in place to respond effectively to any emergency?
Building out your plan
Interesting questions, yet knowing where risk exists though is only half the story – the remaining 50% is concerned with mitigation. This involves the development of plans for addressing specific areas of risk, including policies, workflows, and exception protocols.
Creating and sharing these plans is important for not just defining basic standards and operating procedures – they’re also influential in enforcing consistency. Reassurance comes from knowing that every operative in the cold chain is working to clearly set expectations for both their behaviour and performance.
Making it practical and relevant
Such plans can be highly detailed in nature, and cover:
- Policies for product handling, receiving, storage, picking, loading, transit, and delivery: the output being documentation of the processes required, including control points to mitigate specific risks.
- Expectations for logistics partners: and the minimum certification and qualifications required, as well as technological capabilities (remote tracking solutions etc.) and infrastructure (validated storage areas etc.)
- Standardised procedures for preparing products for shipment: and agreeing different rules for different products and geographic locations, as well as confirming rules of conduct for maintaining chain of custody.
Extending your control across the cold chain
A good risk assessment strategy can give you the confidence that what can be done is being done, even in areas where there’s no direct visibility. Yet control is obviously better if you have a more detailed, real-time picture on the status of individual shipments.
This is where telematics enter the risk assessment picture.
Indeed, having 24×7 connectivity and insight into a load’s condition can help transform your approach to everything from product safety to regulatory conformity. It’s also the platform for inspiring a smarter approach to coordination, and letting you adopt a more pragmatic, high-level view of the entire cold chain. And to this can be added the ability to act decisively once an alert is sounded, and to quickly respond no matter what the operational scenario.
Take control of your risk
Analysis, policies, documentation, and visibility: these are just some of the ‘tools’ available for helping you get on top of cold chain risk. Because whatever the world throws at you, be it a port strike or a natural disaster, what matters most is the speed and ingenuity of your response. The good news here of course is that there’s always help available.
Find out more about Thermo King’s range of telematics products.