Fragmented Cold-Chain Solutions – The Bane of Product Quality Traceability
The adoption of Cold-Chain solutions in transportation and storage of temperature sensitive products is steadily on the rise. Most discerning brands have already put together mechanisms wherein their products are appropriately and sensitively handled, during most part of the logistics life-cycle (if not the entire part). The primary purpose for this investment is to ensure quality, safety and effectiveness of the product, when it is ready for its final usage. While the rule is relevant for many product categories, this blog focuses on its relevance for the Food & Pharma industries. The three most important stakeholders who are interested in knowing that the product was handled diligently through its logistics journey are:
- Brand’s supply chain/cold-chain team
- Brand’s quality/safety team
Despite all the mechanisms in place today, the above stakeholders are unable to trace the journey of a specific product or a batch, in a seamless and transparent manner, as it traverses through its logistics chain. In other words, it is difficult (if not impossible) for the stakeholders to get a “all-clear” or “thumbs-up” from a system, backed by factual data, that is easily accessible, auditable and tamper – proof. This inability to establish product quality traceability, also referred to as “product provenance”, during its logistics journey is one of the biggest challenges that brand-owners and their supply-chain partners are facing today. It would not be an exaggeration to state that over 90%+ of the organizations in the Food and Pharma industries, are grappling with this issue. The bane of this state of affairs, is the abundance of fragmented and point-solutions that the players involved have deployed over a period of time.
Root-causes of this situation
Despite having the best intent while making cold-chain investments, the brands find themselves in this situation because of the following reasons:
- Siloed solutions for different processes – Most brand owners have a complex supply-chain that the product needs to navigate before reaching the intended customer. The actors involved play specific role through the logistics life-cycle. Even in its simplest form, a brand will need to cater to the following:
- Storage of the product at its factory/processing unit, while awaiting dispatch
- Long-haul product distribution to warehouses
- Storage of the product at internal/outsourced warehouses having Cold-storage capability
- Handling of products by entities like C&F agents/Stockists
- Last mile product distribution
- Storage of product with Retailer/Pharmacy/Hospital
Historically, organizations have focused on ensuring that capability and capacity to handle the perishable/temperature sensitive goods is available, for the above-mentioned process areas. This has resulted in implementation of several point solutions, that don’t necessarily and easily lend themselves to providing access to integrated data cutting across all these process areas – something that is fundamental to providing visibility and assurance to the stakeholders on product quality traceability.
- Prevalence of 3rd parties – As can be expected, a brand leverages a variety of third parties in this complex logistics cycle. So while, the brand define certain SLAs that each of these entities have to adhere to, it does significantly restrict their ability to get access to the integrated data required for product quality traceability. Even in situations where they have the ability to access/pull the necessary data from the third parties, the effort and cost involved acts as a deterrent. Also doing this for adhoc arrangements to cater to sudden spikes in demand, is a challenge too far.
- Incompatible technologies deployed – It is not uncommon that organizations have invested in infrastructure that come with technologies that are incompatible towards building an integrated view of product quality. For example, a leading FMCG company is still using a passive data-logger at each of its cold-store warehouses across the country. This combined with the fact that they are missing the infrastructure to monitor condition of the product during secondary distribution, makes the task virtually impossible.
Consideration set for achieving Product quality traceability
Despite the challenges mentioned above, it is possible for organizations to provide relevant stakeholders access to product quality traceability for either assurance or audit purposes. To achieve this, the organization has to apply its mind to the following consideration set:
- Holistic view of process – First and foremost, it is important for organizations to look at their supply- chain/cold-chain process in its entirety, and not as collection of discrete processes. If product quality traceability was a key objective identified at the design stage itself, it would have appropriately influenced the choice of many siloed solution decisions, including the choice of supply-chain partners, that are acting today acting as roadblocks.
- More comprehensive solutions – Unlike in the past, where most solutions were designed to deliver certain specific functionality, the new generation solutions are much more versatile, and are able to cater to requirements across the spectrum. Today it is possible to have solution providers that not only deliver solutions for primary & secondary distribution, but also provide operational visibility for products while being stored at cold-storage warehouses or with the Retailers. Needless to say, adoption of such comprehensive solutions makes it easy for brands to establish product provenance. It is analogous to adoption of IT systems like the Enterprise Resource Planning (ERP) instead of implementing point solutions covering specific functional areas.
- Blockchain as a technology enabler – Given the fact, that for the foreseeable future most organizations will continue to have a landscape involving a heterogenous mix of internal and third-party provider’s solutions, blockchain with its distributed ledger technology has the ability to provide the much-needed glue to link together required data. Blockchain will allows data from internal & external systems (including sensors) to be linked together, as the product traverses through its supply-chain journey. This then empowers appropriate stakeholder to access and query this irrefutable data for traceability at any time in the future. The fact that implementation of Blockchain is largely non-intrusive, relatively quick & cost-effective, and does not propagate large scale rip-and- replace of existing systems/relationships, it is likely to be the preferred option for building product quality traceability functionality.
- Interoperability – In the past, while choosing a service/solution provider, very little consideration was given to interoperability of the solution components with another solution provider. However, given the pressing need to offer richer & specialized solution functionality, without necessarily increasing the cost or duplicating the functionality, interoperability will play a key role going forward. For example – a sensor node or IoT gateway should be able to share data with an existing 3 rd party IoT platform, and not enforce usage of its proprietary IoT platform. This will avoid building siloed systems.
- Quick deployment – Even the most organized and disciplined supply-chain involves usage of adhoc/one-time arrangements. Example – additional truck capacity from an adhoc supplier to take care of promotion related volume uplift. Given this reality, organizations need to invest in solutions that are ready and quick to deploy. So, instead of investing in a temperature monitoring solution that requires installation of a physical probe, it is preferable to have a solution that uses wireless temperature sensors, and can be installed and configured in a time lesser than what it takes to load the truck. It will also avoid having to deal with yet another system from the new supplier.
Product quality traceability is possible today
Product quality traceability for food and pharma industries, that require handling perishables and temperature sensitive products, is possible today. The current system landscape, and the overall objective of the program will govern the path ahead for organizations. It is expected that most enterprises will initially enable traceability for internal stake-holders like Quality & Safety, Supply-chain, etc. However certain e-commerce firms with a direct to consumer model, will focus on making traceability data available to consumer to drive differentiation & innovation in the market.
At SensiWise, we are committed to helping Enterprises get visibility & insights into their operations and assets for agility, efficiency, transparency & innovation. We do this by leveraging technologies like IoT, Analytics & Blockchain and offering solutions for all aspects of cold-chain operations, including product quality traceability.
If you are a player in Food or Pharma industry, and would like to explore how technology can help your business, feel free to Contact Us.