The complexity of today’s food supply chains means that everyone involved has to be continuously vigilant to ensure that safety and hygiene standards are always being met. Adopting digital technology helps improve visibility across operations, ensures compliance with Hazard Analysis and Critical Control Points (HACCPs) and other standards, increases efficiency, and reduces revenue risk from food safety breaches at food manufacturers and suppliers end.
From the Ground Up
The food supply chain isn’t like other supply chains – it is far more complex. It can bring even more intricacies that must be managed for overall success. This point became increasingly clear during my recent conversation with industry experts who provide transportation and supply chain management solutions for the food industry.
In other industries, product orders remain fairly stable (the number of units or cases and its delivery location remain the same from when the order was entered to when it is fulfiled). However, orders in the food industry change often, with buyers deciding they want different quantity of a product, change their mind on where that product should be delivered, etc.
Take this example: A food buyer suddenly decides that instead of 10 crates of grapes, he now wants just 5. Or, consider half those grapes go to a certain distribution center, the other half go to a different location. This is all happening after the order is entered and while the order is en route for delivery. This clearly poses some problems for suppliers, making it more difficult to deliver a product on time (and while it is still fresh).
Another aspect that makes the food industry unique is that strict temperature parameters must be maintained, equipment must be sanitised between loads, and some food products can’t always travel together, such as fruits and vegetables that release ethylene and those that are sensitive to it. What’s more, due to regulations under the Food Safety & Standards Act 2006, some shippers and private fleets must document their activities to prove regulatory compliance.
It’s all in planning and technology
The clock is ticking, and food suppliers need to deliver perishable goods fast, which is a challenge food suppliers, distributors and retailers share as they attempt to maintain a fresh supply chain in the face of mounting economic and regulatory pressures. Well, it’s no surprise that technological solutions such as route optimisation, incentivised scheduling and real-time electronic tracking and communication are becoming more valuable. What’s more, sophisticated supply chain modeling tools and engineering know-how to design complex transportation networks will enable optimise routing to reduce cycle times and improve customer service so that ultimately transportation and logistics companies can drive down costs of shippers.
As they say, when you need to deliver the freshest food and beverage products daily, partner with experts who know your business as well as you do. Well, let’s analyse how equipped and reliable are India’s top perishable logistics and supply chain partners when it comes to helping shippers plan their daily operations, using best-in-class technology to create, document and track shipments and meet shipper’s specifications, improving visibility on several fronts.
Advanced Load Planning
Planning loads is an important aspect of logistics in order to maximise capacity and ensure cost efficiency. In India, where logistics costs are 13-14 per cent of GDP, it becomes imperative for LSPs as well as shippers to develop a process that makes logistics as efficient as possible. Here, the ability to communicate and collaborate increases 3PL’s and shipper’s ability to plan and execute the movement of goods.
According to Vikash Mohan, CEO, DHL SmarTrucking India, “Accurate load building involves calculating and stacking a shipment that will utilise the optimal amount of space in a container without overloading. In case of temperature-sensitive goods, it includes ensuring unimpeded flow of cold air within the container; clubbing consignments according to priority and shipping lanes, in a way that optimises the cost of that particular trip.”
“DHL SmarTrucking’s system provides information that allows customers to understand trends. For example, looking at historical transactions allows customers to analyse dispatch trends to determine which locations have fast or slow deliveries, or where they get repeat orders from, and accordingly build their loads. Through DHL Smart customer app, customers are able to enter advance indents according to their lead times – this includes choosing their preferred trucks in terms of quantity, container capacity, temperature requirements as well as the lanes where the trucks are to be deployed,” says Mohan.
“Advanced planning and optimisation can support the movement process in a number of ways like by making better strategic/tactical decisions based on reliable forecasts, and optimising operational/real-time decisions to improve efficiency and customer service based on actual orders and real-time information, “ says Anand Sen, Business Head, Temperature-Controlled Logistics, Future Supply Chain Solutions.
“The time aspect of operations in express part-load delivery is sacrosanct and this requires scheduled movement of vehicles on long haul routes with impeccable frequency. By making such schedules available to customers, FSC helps them plan their shipments to coincide with the dispatch dates thus reducing cooling building loads across the network,” mentions Sen.
Efficient shipping of perishable commodities is vital to the growth of business for Ravi Integrated Logistics who provide customised solutions for a wide variety of valuable perishables, that suit customer demand. The company’s newly built, state-of-the-art reefer fleet- Mr KOOL is emerging as a preferred choice for refrigerated carriers.
Bhupender Singh, MD & CEO, Ravi Integrated Logistics says, “Advance planning helps customers as well as transporters by enabling smooth operations. We have vehicles of different payload capacity and size. We request customers to provide advance loading plan, at least two days before, which helps us to plan and place the vehicles on time with the required capacity as per customers demand and this in turn, helps customers to plan the shipment according to the vehicle size.”
“Besides, our in-house mobile app helps customers to generate vehicle request in advance and get the required information on vehicle availability with vehicle size, payload, driver details, helping customers plan their loads hassle free,” informs Singh.
The monitoring of temperatures in trailers and cargo to ensure they meet customer and regulatory specifications and requirements improves food safety as well as its quality and shelf life. This is a challenge, especially in India, where the cold supply chain is 90 per cent unorganised and largely unregulated.
Monitoring temperatures not only ensures products don’t spoil; it may also prolong the shelf life, appealing to the desire for freshness. Even the slightest variations in degrees matter.
DHL SmarTrucking has invested in temperature tracking technology that monitors temperature fluctuations throughout the length of the trailer. DHL ColdChainSmarTrucks are thermally mapped, with three digital sensors placed within the container capture data on the uniformity of distribution of temperature within. Digital sensors allow for greater accuracy and reliability, since they do not require recalibration.
Mohan says, “In addition to providing visibility into the whereabouts of the cargo, DHL SmarTrucking’s customer app also facilitates monitoring of the shipment’s temperature throughout its journey. This ensures that customers have complete confidence in DHL SmarTrucking’s services, and peace of mind with respect to the integrity and quality of their goods during any part of their transportation journey.”
TCI, in this case, operate and relies on their ‘Control Tower’ concept for vehicle movement, tracking of cargo and temperature monitoring. Sumit Kumar, CEO, TCI Cold Chain Solutions says, “Our fleet management system (FMS) is designed in such a way that based on the customer’s requirement we set the temperature of the truck, and the same gets reflected in our internal data capturing. Once the temperature is set, any deviation will trigger an SMS to the route controller on real time basis. Besides, to avoid any gap, we have installed 2 temperature sensors in all our reefer trucks.”
Snowman Logistics, one of the key players in the domestic temperature-controlled logistics industry has deployed a GPS system called G-Track. Sunil Nair, CEO, Snowman Logistics explains, “The G-Track system helps us to monitor temperature along with the movement of the trucks throughout the country. We have extended the use of the same technology for our cold storage temperature monitoring as well, which has enabled our operations team to monitor temperature anytime and anywhere on their mobile phones. We also have a 24*7 command centre to carry out temperature monitoring, track the truck location and for troubleshooting.”
While FSC has integrated its transport management systems with remote temperature and location monitoring services offered by multiple service providers. This provides a real time feedback of the goods in transit thus ensuring that quality is maintained throughout transit. The same is also made available to the customers thus ensuring transparency. “Within the trailer as well, there are technologies that help monitor temperature on a pallet level within the container which is essential for highly temperature-sensitive products such as pharmaceuticals,” adds Sen.
Concerning Singh and his team, besides operating Mr Kool’s fleet of GPS-enabled trucks that have multiple sensors and allow temperature monitoring along the length of the container, they are experimenting with multiple sensors at different locations to have better visibility of temperature across the container. Also, they are experimenting on a two-way control device to maintain temperature which they can change/manage temperature remotely from the control centre.
Track and Trace
Since some products must be segregated within the food supply chain, the ability to monitor, track and trace products to prevent cross-contamination is crucial.
Within the food supply chain, a food recall can be extremely complex. To ensure appropriate safety measures have been taken and to protect their brands, food suppliers need to be able to pull products off of the shelf quickly when necessary. The ability to track products from farm to fork throughout the supply chain enables food distribution companies to call back only the items that are actually affected.
DHL SmarTrucking’s protocol places a high priority on zero cross-contamination between shipments with SmarTrucks being segregated according to cargo. The protocol also requires every SmarTruck to be washed and cleaned dry with herbal wash after every delivery and before the next shipment is loaded.
To prevent chemical contamination of the cargo being shipped, DHL SmarTrucking eschews the use of bleachor pesticides in their SmarTrucks.
For Sen and his team, the use of GPS devices help pin point the exact location of the shipment and also raise alerts in case of route deviation or in-transit delays. Within the warehouse, bar codes and RFIDs helps map the location of pallets/shipments against the respective storage locations, thus providing immediate access to the products when needed.
According to Kumar, TCI’s cold chain warehouses operate through Warehouse Management System (WMS) and for every product getting in, they generate a bar code and through scan in and scan out, they manage the inventory. Kumar says, “This kind of WMS system enables us to maintain FMFO/FIFO, inventory control, check on cross-contamination, etc. The same system enables us to generate reports on different parameters. We also have defined different zones in the warehouse and the software ensures that the product goes to the right location based on the nature and temperature requirement, eliminating any chance of cross-contamination. So, whenever we receive an order, our WMS system indicates the location of the material and the right box is picked through scan process.”
On their latest in innovation, Kumar informs, “Recently, we have introduced a multi-Temperature vehicle which is completely flexible in design. There is provision to reduce or enhance different temperature compartments based on the load received. The same multi-Temperature chamber can be converted to only one chamber based on the temperature required by removing the flexible partition. These partitions are cross-contamination proof.”
For Snowman, Nair and his team ensure that the products are systematically compartmentalised, whether it is the truck or cold storage. This is the first step to segregating the products. Even the pick order which is generated through the system for handling the complete documentation is separated, besides imparting a lot of training to the operations team who are close to product.
Load and Product Consistency
The consistency with which a product is delivered is incredibly important to food distribution companies, and it is becoming a greater challenge as those in the food and beverage sector move toward fresher and fast consumable products.
To accelerate freshness, some companies are creating separate supply chains for the different segments within a store. As a result, they are pulling highly perishable items out of traditional distribution channels and putting them in more rapid-replenishment distribution channels. Delivering smaller quantities shifts both warehouse and transportation practices, placing new demands on overall supply chain inventory, which FSC can address.
FSC is in the process of developing a network of distribution centers under the India Food Grid plan which will connect the point of manufacturing to the point of consumption with only a DC in between. This will help in localising the distribution since each DC caters to points of consumption within a fixed radius thus ensuring rapid replenishment. Any manufacturer can use the grid to ensure that their products are available on the retail shelves at the replenishment levels they desire.
Singh says that to maintain the freshness of the highly perishable items, they provide double driver vehicles to customers to maintain the transit hours. “40 per cent fleet of Mr Kool is having double driver facility and we are trying to increase the number day-by-day. At present, we are transporting highly perishable items like hatching eggs, cold pressed juices, fresh fruits, yeast, live plants, etc. Our double driver facility is therefore committed for on-time delivery by maintaining the transit hours provided by customers for such type of products,” expresses Singh.
However, as Nair says, it is noteworthy to mention here that service providers look for the option of rapid-replenishment distribution channels only when they don’t have a cold chain distribution network which ensures an end-to-end cold chain solution for any product. The products move in vast quantities at the last-mile and are delivered at order level quantity, which ensures freshness, and mostly at a cost. Usually, perishables with very low shelf life (2 to 15 days) are routed through direct delivery system, even when it is not very economical. But when distributing a good shelf life product, one would always like to optimise vehicle payload and achieve better fill rates and consistency of supply.
Supply Chain Fluctuations
Within the grocery segment, volumes often spike during certain times of the year, such as during seasonal promotions, the holidays or ahead of severe weather. The ability to scale up quickly enables grocers to keep their shelves stocked, generating consumer loyalty. In addition to traditional spikes, the food and beverage industry can see shifts in sourcing locations due to changes in weather or agricultural conditions. That means shipper’s transportation needs can shift quickly as can available capacity. But having contingency plans in place can keep products moving.
DHL SmarTrucking’s reach across India allows their customers to scale and adapt easily, whether for shifts in sourcing or for new markets and retail locations. “In addition to long haul, we also have provision for regional distribution. Our contingency plans allow our customers to plan their sourcing regionally as well as across the country,” says Mohan.
For Singh and his team, having business analytics system in place allow them to plan as well as to meet contingency, as the system helps to forecast in advance the seasonality, product shift, customer shift and load availability. “The analysis not only based on the data we have in the system but also on information available through external sources like trades, farmers, media, etc.” mentions Singh.
TCI’s 60 year old history and their extensive network is their advantage card. Kumar says, “We are present PAN India (1400 Branches at group level), so any location in India is like home to us, and we have tie ups with clients PAN India.”
Nair is of the opinion that certain products are sacrosanct to particular regions. Regions do not change dramatically but, there is seasonality, which is all taken into consideration while creating capacity, whether it is truck or cold storage. “The production and consumption regions aren’t always the same. Our focus remains on consumption centres which are highly crowded cities and towns. Thus seasons do not impact us much, as we always find products which complement the seasonality,” says Nair.
Solve the riddle of SKU Proliferation
By properly placing and managing SKUs within the walls of a warehouse, manufacturers and suppliers can maximise the number of picks an associate can accommodate, increase agility within the supply chain and decrease inventory cost.
Yet each new SKU brings increased complexity and a risk for errors. SKU proliferation also creates transportation challenges, because businesses are unable to draw on history to predict a new product’s movement.
To help manufacturers and suppliers speed deliveries, manage inventories and control costs, FSC takes a multipronged approach to SKU management. FSC has employed a robust warehouse management system that not only ensures accurate batch management but also interfaces with the ERP systems of customers to manage orders and inventory. Statistical demand planning is a key tool used to forecast demand and manage SKUs but the same requires historic data on volumes with continued inputs from the front line sales staff. An ear to the ground with an eye on data is thus vital to ensure that the dynamic changes in SKUs are competently managed, which FSC ideally follows.
“We work with our customers to manage SKUs. This information is important to us as different SKUs may have different temperature, dimensional and distribution requirements. And whenever there is new product SKUs, we strategise in terms of distribution areas and the necessary protocols. By putting our expertise at disposal, we provide guidance on the right kind of movement and the most appropriate environment for the transport of perishable goods,” says Mohan.
Similarly, for Singh and his team, the business analytics system that are in place, helps them manage the SKUs by enabling them to forecast depending on many factors i.e. context of the forecast, the relevance and availability of historical data.
Best Warehousing Practices
Keeping fresh foods fresh on their journey from the warehouse to the store starts with developing a separate cold chain including visibility throughout the supply chain and safe handling of perishable goods.
Further, with increased scale of operations resulting in an increase in demand for consolidation and hence larger and larger warehouses and a multitude of SKUs under management, it becomes critical that the service levels are not compromised. At FSC, the automated sorter system for example, helps them sort material for 400 stores at a time with minimal human intervention and high accuracy. In-bound and out-bound automation, voice picking and modern MHEs help reduce the total cycle time of operations by eliminating non-value adding activities and help shorten the order processing time.
A number of best practices are followed within FSC’s warehouse for inventory management such as:
- Random audits of put-away and picking.
- Close monitoring of shelf life and having timely liquidation plans for slow moving items to avoid expired stock remaining in the warehouse.
- Random sampling for inward based on vendor rating to prevent inventory mismatch.
- Picking list generated by WMS with batch management.
- Cycle count ensuring that all SKUs are covered at least once every quarter.
For loading and unloading practices, Nair and his team plan ahead of the arrival of the vehicle. They anticipate the number of pallets they would require and the number of trucks. There is a location tracking system in the warehouse which manages the expiry date of the product. People are also scheduled depending upon the peak and lean hours of operations which enable them to manage the overall efficiency, thereby allowing them to cut on warehouse costs.
Meanwhile, Mr Kool’s warehouse management system for controlling and managing deliveries, inventories and costs, includes the following key features:
- Chamber wise Temperature Display
- Warehouse Heat Map with ABC Analysis
- Expiry Management
- FEFO & FIFO Scheduling
- Category Wise Temperature Wise Put away List Generation
- Efficient Inward and Outward Process
- Suggested Location display on Put away and Pick Up List Generation
In TCIs case, apart from their WMS system which offers efficient error free inventory control, they also monitor few important KPIs like warehouse utilisation, productivity of each operator/associate and energy cost optimisation. Besides, as a practice, TCI keeps on moving senior staff with junior ones every 2-3 years so as to ensure their working mechanisms don’t become redundant and also to help junior executives move up the career ladder.
While refrigerated transportation and the cold chain are growing globally to support the increasing demands of technological innovation and globalisation, none of this innovation would be worthwhile if not for the cold chain logistics and temperature-controlled transportation that keep perishables in their optimal state throughout the supply chain.
The industry is projected to continue growing at a massive rate, which has the potential to improve quality of life in developing countries such as India, and provide cutting edge medical and pharmaceutical products to people in need across the globe.
Whether refrigerated transportation is used to transport perishable products across oceans or simply across cities, the global impact of the cold chain will continue to increase for the foreseeable future.