June | 2020
Perishables and temperature-sensitive products require controlled environments across the supply chain to the point of consumption – think meat, dairy, fresh produce, vaccines and pharmaceuticals. Even a small variation in temperature (as little as 20 to 40C) can impact quality and could even create life-threatening toxicity. However, the cold chains used today for distribution of such goods are not optimal. Lack of transparency across the chain, and the inability of manufacturers and logistics partners to take real-time action costs billions in lost and wasted products. At the same time, overproduction and supply-demand mismatch also leads to wastage. Buyers often forecast massive order quantities but end up ordering a fraction of that, leaving manufacturers in the lurch. In times of global emergency, such as the COVID-19 crisis, when the medical supply chain is critical to a successful response, having an efficient and transparent cold chain is essential.
The stark reality of inefficient cold chains
In food alone, there is $940 billion[i] worth of loss and wastage per year with BCG estimating that in the US alone 1.6 billion tons of food spoils every year due to cold chain malfunctions[ii]. Overproduction contributes as much as 56% to food wastage. Similarly, failures in temperature-controlled logistics cost the biopharma industry $35 billion every year[iii]. According to a recent study, 38% of vaccine shipments in developed countries on average had experienced temperatures that were too low requiring re-vaccination[iv].
Overcoming cold chain challenges with real-time insights
Ability to access detailed, real-time information about cold cargo can help manufacturers prevent spoilage and also manage inventory and production to ensure just-right and just-in-time supply.
Consider the case of a perishable drug. The manufacturer packs the cases and tags each one with details about the shipment and stores this data in the cloud. This could be a RFID tag stating date of manufacture, number of medicines per case, etc. When a buyer places an order, this tagged data makes it easy for the manufacturer to check if they have the required units, which ones are nearer expiry and must be used first etc. When these cases are shipped, scanning these tags crosschecks the cases being shipped with the order placed. Each case is placed in a vehicle, which has sensors for the control conditions such as temperature and humidity, and also trackers for location. These sensors relay data to edge devices which may do some pre-processing and decision making and upload this data set to a cloud data store. In the cloud, the data is again processed via a set of rules and functions send automated alerts to the manufacturers and drivers who can adjust controls in case the temperature deviates from pre-determined values or notify end customers in case the shipment is damaged. GPS data can also let all players in the chain know where the shipment is at any point in time and take appropriate action in case of delay. During the COVID-19 response, the ability to understand supply chain disruptions could mean the difference between life and death if blood samples in transit are critical to medical decisions being made for a specific patient.
Today, technology advances have made it easier for every player in the supply chain to have access to multiple data streams on the cloud on a single platform. However, the main culprit of cold chain inefficiency is siloed data. The cold chain still relies heavily on manual interventions when it comes to coordinating between players to find out the shipment location and condition. It becomes difficult to pinpoint and take real time action if a refrigerator is malfunctioning or if the shipment is spending too much time on the tarmac or customs. Data inaccessibility is impacting the overall profitability and productivity of the system and in the worst case, endangering lives.
The success of the modern supply chain depends on data democratization. Opening access to the volumes of critical data collected at each step in the supply chain will provide end-to-end data visibility across the cold chain for all stakeholders and create opportunities for innovation, efficiency, and just-in-time operations – not to mention enhance customer experience. Access to supply chain data can increase service quality and predictability across the chain while reducing dependence on manual interventions. The obvious location for this data is in the cloud. The cloud’s base functionality of highly distributed and redundant data stores allows data to be shared globally, quickly and easily. Again, in times of global crisis such as the COVID-19 pandemic, when data is a key measure of success, cloud is an essential element.
Collaboration will be key to ensure everyone who needs access to the data has it – including customers and partners such as manufacturers, logistic providers and carriers. To enable this collaboration and improve overall supply chain efficiency, we need systems that support data sharing – seamlessly and securely.
Building the Internet of Logistics
A data sharing system to boost collaboration across the supply chain can be visualized like a data exchange. On this secure and interoperable “Internet of Logistics” all parties can upload and access relevant data overcoming the limitations of traditional supply chain communications that don’t talk to each other. Open standards will be crucial in making these systems possible on a global scale. Forums like the Digital Cargo Forum (DCF) are working with industry players to define these standards, ontology, and data linking principles.
One of the key factors in building an exchange like this, apart from the technology, will be trust. While technologies such as IoT, AI, and edge computing will enable real time action, they will also expose the system to cyber threats. In addition, the veracity of data needs to be protected. This can be achieved with Blockchain and standards like GS1 that can be used to create immutable ledgers for trusted access. A great example of how this could work is Hyperledger’s Sawtooth blockchain platform[v] for seafood supply chain. Seafood harvest is fixed with IoT sensors that share data on shipping location, transport temperature, movement, humidity etc. This data can be used by anyone with access to Hyperledger Sawtooth to track the seafood and the complete record is available to the final buyer who can judge the quality of the product.
The future cold chain
Information siloes are no longer a sustainable way to do business. The ability to share data will be a key building block of the future cold chain, and supply chain players need to adopt a more open, transparent, and collaborative approach to stay competitive. Utilizing the public cloud’s ever increasing range of capabilities will be a key requirement for success.
To know more about future cold chains and the role of data in their success, write to me - karl.veidis@wipro.com
References
[i] https://www.loaddelivered.com/articles/the-shocking-truth-about-food-loss-waste-in-the-supply-chain/
Karl Veidis
Partner for Cloud Consulting in the USA.
Karl is a member of the global cloud consulting partner team focused on Energy, Manufacturing and Technology verticals. Karl works with different clients throughout North America to understand their business needs and help them set technology strategy and direction. With a particular focus on clients who wish to re-gear their IT Organization and Business Services within the context overall of IT-aaS and Cloud, Karl helps frame the vision and define the architecture of their new cloud-enabled enterprise.
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