Cold Chain Innovation: Fundamentals First

The recent passing of the Food Safety Modernization Act brings new focus and heightened awareness to issues associated with food safety and quality. This legislation continues to highlight the goal of the Integrated Food Chain Center at Georgia Tech in better assuring end-to-end integration of the food chain. The work to improve the cold chain includes major topical areas of increasing integration effectiveness, enhancing product quality and brand equity, and reducing cost through the use of improved processes and practical technology.

However, while advances in end-to-end processes will have significant benefits on operating cost, quality, and food safety, the tactical aspect of sound cold chain practices continues to be the backbone of the integrated cold chain strategy. These tactical cold chain practices reflect the daily operating realities of fast paced and service critical operations in delivering products to the customer in the right condition, at the right time.

It is most often at this detailed, day-to-day level that problems in the cold chain occur. What makes these issues especially troublesome is that their impact may not be seen until later in the cold chain as problems manifest themselves. In some cases, these issues will not be apparent until the point at which customers purchase the product.

At a high level, three major areas provide an overview of the tactics or operating structure required in most cold chains. These include Planning and Risk Assessment, Policies and Processes, and Management Practices. Planning and Risk Assessment addresses the overall structure under which the cold chain operates. It is in this area that overall performance expectations and objectives for cold chain functionality must be developed.

Risk Assessment

One of the initial steps of this process is a cold chain risk assessment.  A risk assessment of the cold chain process is essential to ensure that a clear understanding of the performance of the integrated, end-to-end cold chain is obtained.  It is also critical to identify the highest risk areas of the cold chain so that management plans and controls may be implemented to mitigate these risks. For example, in most cold chains the highest areas of risk are the points of product handoffs or transfers.

This may include ports, transfer facilities, distribution centers (movement into or out of) and customer deliveries. In addition, multi-stop transit generally presents control risks as well. Once risks are identified, the plan for addressing these risks and for general cold chain performance should be developed. This includes handling policies, exception protocols, critical control points and work flow. An overall management plan should be included as part of the process as well.

Policies and processes should address both the product(s) requirements as well as the handling for the products throughout the cold chain. Product requirements include profiles such as temperature thresholds, stability, humidity, packaging, etc. Acceptable ranges for these requirements should also be addressed.

Handling requirements include the specific procedures which should be in place throughout the cold chain, and as stated earlier, can be effectively addressed as an output of the risk assessment. These requirements may include receiving practices, product put-away, storage, picking, loading, transit and delivery. Each of these areas has its own issues which should be addressed at a detailed level through documentation of processes required and should include control points designed to mitigate identified risks. One example may include documentation of specific product receiving procedures with product temperatures taken upon receipt as a control.

Another example may be documentation of trailer pre-chilling and loading requirements with specific pre-chilling temperatures and trailer load plans as samples of controls. The documentation of these cold chain operating procedures provides the cold chain operator the “how-to’s” of proper cold chain handling for its product(s) and operating environment.

Management Practices

The third major area of the cold chain operating structure is management practices. This includes monitoring, reporting, validating and follow-up.  With the availability of current technology, it is not uncommon to generate millions of data points as part of the reporting process. However, perhaps the most important issue to consider is what to do with all the data.

How can the data be converted to useful work flows and more importantly, used as performance measures? How are reported exceptions converted into processes for action? Furthermore, how is the data used to predict when a problem is developing before it occurs, thus mitigating product spoils and the resulting cost impacts?

Other areas should also be addressed in a company’s cold chain tactics, such as training, third party audits, selection of technology enablers, supplier and vendor performance, etc. However, the areas addressed above provide a good initial platform to consider in the development of required cold chain tactical practices. Without sound execution of these and other fundamental cold chain management practices, the foundation on which to build innovative cold chain strategies is not present. Once the fundamentals are properly executed, the integration and cold chain optimization strategies enabled by technology can take cold chain operators to entirely new levels of innovation.

Starting in fall 2011, the Georgia Tech Supply Chain & Logistics Institute will offer a Cold Chain Management Certificate. To learn more, contact Carole Bennett at carole.bennett@isye.gatech.edu.

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