The stakes are high for businesses operating within the cold chain. Most products that are highly temperature sensitive and require precise temperature control from their primary origin to their final destination are also products that are in high demand, like medical supplies and fresh produce. Margins within the cold chain can be razor-thin, and there is immense pressure to perform. Businesses must hit tight deadlines and ensure high quality to meet customer expectations.
Unfortunately, many cold chains are operating with outdated strategies and technologies that radically increase their risk. Here are three key ways business leaders can update operations to make their cold chain better and stronger into the future.
Supply Chain Resilience
A cold chain is a supply chain with additional demands and constraints, so many of the risks to traditional supply chains also threaten the cold chain. Unexpected spikes in demand, trade restrictions, supplier closures, rising freight rates, natural disasters and more can cause costly disruptions in the cold chain — but fortunately, businesses can protect themselves by investing in supply chain resilience.
Resilience in the supply chain occurs when every element of the supply chain — the people, processes and technology — can navigate every aspect of disruption. In fact, not only should the supply chain be capable of tolerating disruption, but if it is sufficiently resilient, it should be able to anticipate disruptions and respond correctly, to the extent that it can take advantage of emerging opportunities.
Supply chain experts assert that there are four components of supply chain resilience:
- Efficient management, in which leaders employ forward-thinking processes to manage every step of the cold chain.
- Data monitoring, which involves deploying cold chain technologies to capture information about the cold chain, such as real-time temperatures of shipping and storage containers.
- Partner networks, in which suppliers and partners provide services and solutions dependably.
- Supply, demand and inventory management, which allows organizations to keep their inventory balanced and avoid oversupply or just-in-time methods that can result in disaster.
Currently dominant is an economic model in which resources are mined, converted into products and then discarded as waste. Though this model has been in use for thousands of years, it has ultimately resulted in a number of global challenges, some of which threaten humanity’s future. What’s more, the existing economic model continuously costs organizations money as they strive to acquire more resources to fill the needs of their supply chain.
A much better solution for the present and future is the circular economy. This economic model maximizes materials by repurposing and reusing core elements for as long as possible. By transitioning to the circular economy, organizations within the cold chain can develop greater resilience, reduce their consumption of finite resources and take great strides toward completing ESG objectives. Many experts believe that greater investment in the circular economy could eliminate issues like climate change and pollution, improving biodiversity and ensuring a future for the human race.
Creating a circular cold chain will require a shift in perspective from business leaders, who must begin to rethink waste products as resources in fueling their organizational success. Again, technology can be an asset in helping leaders maximize the value of products and materials to ensure optimum value and efficiency for the business and customers alike.
Generally, it is poor business management to invest in technology for the sake of technology. Making major changes to business processes to integrate technologies that workers do not benefit from is merely another form of waste, and it will reduce the value that organizations receive from their cold chain. However, in the digital age, cold chains benefit from a number of sophisticated smart tech solutions, to include:
- Internet of Things (IoT), which involves sensors that can provide real-time visibility of cold chain products, such as location, temperature, humidity, environmental weather patterns, traffic updates, estimated arrival times and more.
- Artificial intelligence (AI) and machine learning, which can collect and analyze greater amounts of data to guide leaders toward insights that can vastly improve cold chain decision-making.
- Blockchain, which is an immutable digital ledger tech that many major supply chains utilize to keep track of materials and goods around the world.
- 3D printing, which can produce products and packaging on-demand and on-site to eliminate many global supply chain challenges.
The sooner business leaders can update their cold chain strategy, the better. By eliminating waste and improving efficiency with the use of specific cutting-edge technologies, organizations within the supply chain can flourish.