The big word in the logistics and supply chain “world” is RISK, and a risk assessment being performed, or at least having a mitigation plan in place, is becoming part of many certification requirements, like ISO 9001, and other pending or recently introduced federal regulations.
It will be no surprise, I am sure, when I mention certain facts like – “Where humans are involved in a process there will be errors, and 90% plus of all supply chain errors are human errors”; but how do you avoid these?
Firstly, let me say there will always be Risk not only in the common elements of the supply chain but also and especially with the way that you handle any cold chain or temperature-controlled products.
So how do you manage these risks?
There are 4 common and accepted ways that Risk can be managed, or mitigated:
- Risk Avoidance: Changes made to your processes and players that ensures risks are no longer an issue.
- Risk Mitigation: Reduce the severity of the loss or prevent the likelihood of the risk from occurring.
- Risk Acceptance: Avoidance of a potential risk area is not possible or economically feasible, so it is acceptable and will not impact your business.
- Risk Deflection: After the risk has been identified and quantified, transfer that risk to the control of another player or partner in the process – maybe add it as a clause to be addressed in a vendor contract.
So how do you establish a Risk Mitigation Plan?
- Review and audit your supply chain to assess where risk does, or may exist
- Assess what the impact of these risks may be and create a list with the highest probability items at the top to address first
- Define your risk mitigation strategies for the highest-level items and work down the list from High to Low
- Implement the strategies and document them.
What else should I do, or know?
- Even though your Risk Management plan includes good SOP’s and WI’s make sure that people are adequately trained in these disciplines
- Conduct self-audits regularly
- The cost of a Cold Chain Monitoring device or solution, is far less expensive than the cost of disposal of a temperature compromised shipment
- All Quality Systems and Risk Aversion Plans should have one over-arching goal – Quality of Product and Consumer Safety!!!!
At Timestrip we are acutely aware of all kinds of risks that can exist in all kinds of supply chains from Pharmaceutical to Food and even beyond to special chemicals and laboratory testing time lines.
For a full range of our products please visit our products page
Time and distance are the twin challenges when managing cold chain logistics for the transportation of fresh food perishables
Fruit and vegetables, packaged salads, dairy produce, eggs and even flowers – consumers the world over depend on supply chains that can bring perishable goods to retailers’ shelves speedily and in the best possible condition. Their instantly made purchasing decisions depend on products looking as appealing and unblemished as they do in promotional advertising.
At Timestrip, we see this every day. One of our aquaculture clients uses our Irreversible Time and Temperature Indicators in the export of seafood to the US market. He reports that how his products look upon arrival directly impacts on whether a delivery is rejected or not. His use of Timestrip smart labels ensures that his cold chain management processes guarantee not only that his products are safe after transport, but also look fresh to the end-user. (Read our Ferme Marine de Mahebourg case study)
Moreover, this need for efficient transport processes that guarantee product quality at the point of sale is playing itself out against a backdrop of rising worldwide consumer demand for perishable goods as per capita incomes rise in major markets such as China and India.
A general rule of thumb in the global food trade is that lower per capita income nations tend to import mostly grains, while higher per capita income nations import a wide range of cold chain perishables. So, while 70% of foods consumed in the US are managed by cold chain processes against only 25% of the meat and 5% of the fruits and vegetables in China, for the latter these figures are rising rapidly.
Also, within developed markets, the demand for perishables is rising. According to Winnesota Regional transportation, the US refrigerated transportation market on which the sale of perishables depend is growing at a rate of around 12.5% per annum, with strong projected growth in the coming years.
Projected annual growth in global cold chain to 2020 - 13.9%
Fresh produce shelf-life time spent in transit- 50%
Source: Logistics Bureau
Although regulation around safety is an important factor in the growth of cold chain transportation, globalisation and innovation play a far more important role. Technological progress around refrigerated transport makes it possible for less developed economies to sell their perishable produce in far away markets.
Complex international supply chains
As soon as a flower is picked or a fruit and vegetable is harvested, it begins to rot. Time and distance are thus the twin challenges of the fresh cold chain.
In fact for some produce such as Guatemalan bananas that picked when they are green, this biological process occurs during transit thus ensuring they arrive at retailers in the EU and the US in a saleable condition.
To avoid product spoilage, speed is the number 1 priority. Cold chain processes are therefore equipment and technology intensive in order to prolong freshness so consumers get to buy saleable produce.
Other considerations include:
- product sensitivity to weather and other naturally occurring disruptions
- the maintenance of sound sanitary practices from producer to retailer
- the requirement of specialised handling and packaging
- accurate labeling and traceability
Faster supply chains
An increasingly common feature of making perishables supply chains faster is for major supermarkets to take total control of this process with acquisitions of farming production facilities and the development of close business relationships with growers.
In the UK, the supermarket chain Morrisons is also one of the country’s biggest food manufacturers, with over 20 nationwide food production and distribution sites. The group says that more direct links with its farmers enable it to deliver the freshest food and best value to its customers.
Vertical supply chains also allow for growers and farmers to earn more from their produce. This happens in France with the supermarket chain Intermarché whose close relationships with dairy farmers ensure that they are paid 50% of the retail sales price of a litre of branded milk.
From farm to supermarket shelf
The Leckford Estate in Hampshire, southern England, is the Waitrose supermarkets farm that supplies its produce to Waitrose stores across the UK
Keeping the fresh cold cold chain cool
Although speed is essential in ensuring that the transport and delivery of perishables avoids spoilage, temperature control is another vital component in guaranteeing fresh cold chains.
“Maintaining the cold chain is one of the most effective ways to ensure safe, quality food”
Jorge Hernandez, Senior VP, food safety and quality assurance, U.S. Foods
The complexity of the required processes has led to the food companies working increasingly with specialist third party suppliers and the requirement of suitably qualified personnel.
Another key cold chain area for temperature monitoring revolves around equally specialist technologies, such as RFID tags that record and forward real-time temperature data, real-time GPS tracking that provide visibility of shipment progress, and a range of high-tech time and temperature monitoring solutions.
Avoiding waste due to spoilage
Fresh produce spoils easily and in many cases this is only identified at the very end of the transportation cycle, leading to either shipments being rejected or consumers claiming refunds from retailers. Moreover, apart from waste caused by the spoilt produce, further costs are incurred related to transporting these products that will never be consumed.
For companies, these have a big impact on their financial results. Timestrip Irreversible Time and Temperature Indicators are currently being used by a number of companies to address this issue. In the US for instance, the rail carrier Amtrak has integrated Timestrip products to successfully reduce food waste of its on-board catering services. Read our Amtrak case study.
At an industry level, a new vision about how to reduce these costs is around the establishment of "lean practices" whereby handling by various stakeholders in a perishables supply chain are kept to the very minimum. This is part of the thinking behind supermarkets taking control of food production mentioned above.
A strategy in this area includes a focus on direct-stores deliveries that avoid traditional centralised distribution methods and the maintenance of smaller local fresh produce warehousing much closer to retail outlets.
Significant savings can be also generated with appropriate packaging that protect fragile perishables against damage and innovative materials that actually extend the life of produce by controlling its life-cycle with the use of ripening agents such as ethylene gas.
This can involve speeding up the ripening process with innovative packaging containing ethylene gas capsules that can ripen fruit on demand, and ethylene gas that is used to ripen green bananas during transportation. It can also involve slowing down the ripening process with the use of ethylene absorbers that are added to fruit packaging.
A growing area of cost savings in fresh supply chains is the use of returnable plastic crates (RPCs) that can be used many times.Their ergonomic design allows for space-saving stacking, safer handling and ventilation and draining hat reduces in-transit spoilage. Plus with so-called "one-touch merchandising", RPCs placed directly onto shelf displays,further reducing handling.
They also have an impressive environmental record: a 2013 study found that RPCs generate 82% less waste, consume 92% less water, cause 76% less ozone depletion and require 49% less energy.
The advent of the banana cold chain
Bananas make up the largest share in the transport of perishables, equivalent to approximate 20% in volume and worth some US$8bn in 2013.
Exact figures of global banana production are difficult to determine as globally only 15% of production (which include plantain) is exported and much of what is not exported is produced by small or very small growers.
Nevertheless, refrigerated cargo (aka reefer) ship technology has been an important driver in the cold chain technology development. The first reefer ship for the transport of bananas was developed in the US in 1902 by United Food Company.
Up until that point, bananas were a highly exotic fruit and very much a luxury item in non-banana producing nations.
Today, it is one of the world's most consumed fruit and due to its distinct ripening process, the trade and transportation of this produce has led to distinct term in cold chain logistics – the so-called 'banana cold chain'.
Whether it’s Chilean blueberries for breakfasts in London, French-made polio vaccines for use in Malawi, or Mauritian sea bass for restaurants in the Big Apple, the chances are that all these cold chain perishables have been transported by air.
Indeed, thanks to our increasingly connected world and rising incomes in developing nations, consumers across the globe are opting for perishables produced far from where they will be consumed. Since 2010 in India for instance, rising per capita incomes have led to an increase in the consumption of frozen food, meat, fish, canned and instant food items, as well as a greater acceptance of frozen vegetables.
Similar trends have been noted in China, where in increasing numbers more affluent consumers are opting for imported foodstuffs, especially seafood.
Strong growth for cold chain logistics
For cold chain pharma products, the figures are startling. In its annual Biopharma Cold Chain Sourcebook, Pharmaceutical Commerce estimates the global volume of 2017 cold chain products at $283 billion, out of a total market of $1.17 trillion, and growing at approximately twice the rate of the overall pharma market.
The International Air Transport Association (IATA), which supports aviation with global standards for airline safety, security, efficiency and sustainability, estimates that immunization prevents 2.5 million deaths every year and sees air cargo as critical for flying short shelf-life vaccines to their destination in time to be effective.
Air transportation is also critical to the economy of many regions, notably fruit‐ and vegetable‐producing countries in Africa that ship most of their produce to developed markets.
Time and Temperature Indicators (TTIs) play a key role in this process, by providing clear and unambiguous data as to whether any cold chain breaches have occurred during transit, and if so, how long they lasted. Moreover their use with certain products in certain markets are mandated by regulatory authorities, such as by the FDA for seafood imports into the US.
Managing complex logistics
That said, the transportation of cold chain perishables by air is highly complex and prone to numerous situations where temperature breaches can occur. In a study for the air transporter IAG Cargo, researchers found that over half of all temperature deviations occurred during transportation.
This data is supported by findings of the World Health Organisation (WHO), which says: “The greatest and most frequent vulnerability to temperature exposure occurs on the airport tarmac when goods are exposed to the elements before aircraft loading, or during unloading.”
Research however points to cold chain logistics managing these situations effectively for some time now. A 2012 study of Icelandic fish exported to the UK and France showed that despite poor temperature control during storage and ground operations at the airports before and after the flights, relatively a moderate increase in the temperature of the fish were recorded: the pallets of food were subjected to ambient temperatures above 10°C as well as solar radiation for several hours, but the temperature of the fish rose by less than 2°C. This was explained by the transportation of the fish inside polystyrene boxes, which were kept cool with ice inside the boxes.
It’s important to stress though that in these sorts of situations it’s only the use of temperature monitoring tools such as irreversible TTIs inside the boxes on the transported items themselves that a stakeholder can know whether potentially damaging temperature breaches have occurred.
Food loss epidemic
Nevertheless, despite much progress and professionalisation in cold chain logistics, certain problems remain difficult to resolve. One of the main costs with the transportation of perishable products such as fruit and vegetables is wastage due to spoilage related to inadequate temperature management during transit. Estimates vary as to what this amounts to, but most data suggests it is in the region of 33%.
According to the United Nations’ Food and Agriculture Organization (FAO), this wastage should be viewed as a “food loss epidemic”, which it values at about $1 trillion each year. Added to this are related environmental costs: wasted water used to produce food that is never eaten equal to the water needs of Africa, and CO2 emissions equivalent to removing every car off the road across the world.
It is hard to imagine any industry would tolerate 30-40% inefficiency.
Food bacteria grow best between 5°C and 60°C, which explains why keeping perishable products cool, cold, frozen or deep frozen is the only way to guarantee product quality and shelf-life as it arrives at the end of a transportation process.
Customers of air transport providers for perishables are well aware of this. In a survey of their various concerns, the three greatest were recorded as:
- the expertise of handling personnel
- appropriate temperature monitoring
What is remarkable about these concerns is how they very much match those of the healthcare sector and it would seem that moving forward, it will be the lessons learnt from transporting pharma products, that could help avoid the massive cost of food spoilage during transit.
In a conference in Dallas, Texas, last year organised by the Netherlands-based Cool Chain Association, chairman Stavros Evangelakakis suggested applying healthcare industry standards to perishables would lead to wastage being “dramatically lowered”.
A post conference statement went on to stress the need to “treat perishable cargo with the same care, respect and transparency as pharma”, adding that this would be “crucial” for new and emerging markets such as South American and Africa.
Potential “quadruple win” for cold chain logistics
A recent study reported on in The Guardian highlights the huge benefits proper cold chain management can bring to the transport of perishable foods.
A carrier in India field tested cold chain equipment with a local grower for the transport of fruits in refrigerated trucks from Punjab to Bangalore, a 1,600 mile-trip over rough roads in high temperatures.
The results were significant:
- a one-week shelf life increased to two months
- profit increases by up to 23% for all the supply chain actors
- post-harvest food loss reduced by 76%
- greenhouse gas emissions reduced by 16%, excluding the significant reduction of emissions from food loss
Blueberries in January
One of the massive economic benefits of effective cold chain management is how it enables the creation of new markets.
In most countries, blueberries used to be only available at specific times of the year. The situation changed dramatically in the 1980s, with Chile harvesting blueberries from October until late March and exporting these to the US.
Today thanks to climate-controlled storage and transport technologies, the fruit is available year-round in many regions, buoyed on by the rebranding of the fruit as a “super-food”.
Today, the US is the world’s largest producer of blueberries, followed by Canada, Poland and France. Meanwhile in the UK, 2010 was the year blueberries overtook raspberries as the country’s favourite soft fruit after strawberries.