Chill Challenge

Capacity shortages and smaller shipment sizes are creating a meltdown for cold chain participants, according to our exclusive survey.


Track and trace/event management: Track and trace is typically performed manually by pulling status from each carrier’s Web site or by calling the carrier directly. There is, however, supply chain technology that provides both visibility and event management capability. Twenty--two percent of respondents indicated that they currently use track and trace and event management tools to reduce costs or capacity issues and another 32 percent are planning or thinking about using it in the future. The level of automation that respondents are currently or thinking about using to track and trace shipments and manage events is unclear from the survey.

Track and trace and event management applications are Web--based tools that provide total visibility of in--transit shipments and major milestones, such as proof of delivery across multiple modes and carriers. From an event management perspective, the tool sends different types of alerts based on the defined business rules and parameters. For example, an e--mail alert may be sent to notifiy the shipper if the product has not been received at a location within a certain delivery window. The shipper can then proactively trace the shipment and notify the consignee of the pending delivery delay and revised delivery schedule.

Internet marketplace: Eleven percent of the survey respondents currently use Internet marketplaces, while almost a full half of them have no interest in participation whatsoever. Internet marketplaces for transportation--related services are constantly changing, evolving and unfortunately, disappearing. After the "dot com" bubble burst a few years ago, the supply of freight bidding and matching services was far greater than the demand of companies willing to try this new business enabler. Those service providers that remain may be operating in a significantly different environment than they had initially planned as providers have diversified into more traditional transportation fields, such as freight bill audit and payment, track and trace, document imaging and the like. The savings are de--pendent on the shipment characteristics, including weight threshold limits, time and lane.

Capital Intensive Programs

Private/dedicated fleet: Thirty--one percent of the respondents currently use a private or dedicated fleet to transport their goods and another 26 percent are planning, or thinking about, investing in a private or dedicated fleet for the future. The decision to utilize a private or dedicated fleet is a tradeoff between cost and service. The cost of a private fleet includes maintenance facilities and staff, parts inventory, tools, equipment, software and more. With the current capacity shortage, however, private fleets allow greater control over capacity and the delivery event. A dedicated fleet does not require the capital investment of a private fleet, but the shipment is in the hands of a third party who does not have true ownership of the product and the delivery event. Additionally, private and dedicated fleets are able to minimize the effect of Hours of Service rules by smoothing service variability through the control of their own assets.

Relocating operations: More than 65 percent of the respondents expressed no interest in relocating operations. Relocating operations can mean a large capital investment, coupled with additional financial risk. Many companies are not willing to take this option as is reflected in the survey results.

Utilization of 3PLs that specialize in providing warehousing and distribution services in dry, ambient, refrigerated and frozen environments is a good way to minimize these risks and offset the capital requirements for relocating or opening a new facility. 3PLs offer a wide range of warehousing and distribution operations that are tailored to specific client requirements, whether it be a large--scale or smaller hub facility, client--dedicated or multi--user facilities, or a supplier--owned inventory environment.

The first step in any facility relocation would be to perform a network design analysis. This allows companies the ability to evaluate their current supply chain against alternative network designs and assess the cost and service impact of changing the current infrastructure. The study can start as far upstream as to what vendor should supply which raw material. The further upstream the study goes the more accurate and cost--effective the newly designed network can be. The technology used in strategic modeling can be expensive and models can be difficult to build. Companies, therefore, may want to outsource rather than making an in--house in­vest­ment in the software and training existing staff or hiring from the outside.

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