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Expanded Connected Cold Chain Solutions Drive Improved Performance and Efficiencies in Food and Pharmaceutical Sectors

Expanded Connected Cold Chain Solutions Drive Improved Performance and Efficiencies in Food and Pharmaceutical Sectors

By Isabel Chapman and Andy Castonguay, Machina Research.

Last Week at IOT Evolution in Las Vegas, there were 7 panels that directly discussed supply chain, and more that referred to it in ancillary terms. Long the bread and butter mainstay of M2M, supply chain has come a long way since the introduction of SCADA and fleet OBD installations. Special attention has also increasingly been drawn to IOT in the cold chain.

Supply chains have been studied as part of the history and ongoing efforts in IOT, and solutions form an integral part of the IOT’s lexicon. Machina Research estimates that by 2024 there will be 73.8 million M2M connections in the supply chain, up from 5.8 million in 2015. With projected revenues of USD8.9 billion in 2024, that translates to a CAGR of 16.8%.

Recently, through a confluence of increased investments in device technology, decreased cost of sensors, increased focus on analytics, operational efficiencies for cost containment, regulatory requirements, customer demand for increased real-time information, and the growth of global market demand, cold chain has been brought into greater relief as a key area of industry focus. Cold chain focuses on the transport and temporary storage of perishable goods including food, chemicals, and pharmaceutical supplies.

IOT is being effectively used for both middle mile and the more operationally complex last mile of the supply chain. Within the middle mile, the use of refrigerated containers, warehouses and trucks is standard. Increasingly, trucking OEMs are trying to embed technology into their new vehicles. Commonly vendors offer real-time status updates and tracking of goods in transit and are increasingly using intelligence to provide preventative maintenance or analytics on container usage, for example. Temperature data and history of the product, container, and method of transportation is also monitored to minimize risk of spoilage. With increased legislation concerning transparency, as well as increased global trade of goods requiring potentially time-consuming customs clearance in multiple jurisdictions, there is a greater requirement for documentation at all stages of the chain of custody, especially for perishable goods that are time sensitive; further, mitigation of financial and insurance risk is attained through tracking.

The last mile is known as the least efficient since issues unique to this part of the supply chain occur such as shrinkage, unsafe transfer of goods from hub to local vehicles or refrigeration units, traffic delays, and excess consumption of energy. Companies are coming up with innovative ways of using IOT to make the last mile more efficient, such as single use disposable sensor units (Locus Traxx) and analytics that determine energy saving standby modes on hinged refrigeration units in the beverages industry (Elstat Group). Non-traditional players, in the form of enterprise, are also coming into the IOT space to address these issues, such as FedEx with its real-time information SenseAware multi-sensor device created by its Innovation Lab.

In addition to its substantial role in the food industry, effective cold chain logistics has become a crucial element of medical practice to ensure that perishable medicines, vaccines, blood units, plasma units and other important substances retain their validity and, consequently, their effectiveness. In response to market and regulatory pressures to track pharmaceutical products as well as control costs, pharmaceutical and medical vendors are increasingly introducing connected sensors, data loggers, shipping containers, and refrigeration equipment to the conventional mix of specialized insulated containers, dry ice and refrigeration systems typical of the medical cold chain. These elements are not only designed to provide consistent data on the condition, temperature and location of the products being transported but also to permit improved monitoring of the refrigeration equipment and process to identify and resolve any weaknesses in the supply chain from manufacturer to transport to medical facilities. This combination of improved temperature performance and cold chain analysis is becoming a fundamental tool in the expanding international focus on vaccination efforts in developing countries.

thermometerMarked expansion of vaccine distribution efforts by organizations such as the Global Alliance for Vaccines and Immunization (GAVI), UNICEF, the World Health Organization (WHO) and the Bill and Melinda Gates Foundation have created a substantial new challenge to cold chain systems in developing countries, where the availability of reliable refrigeration is often limited and/or unreliable. Improved cold chain management and monitoring is playing a key role in ensuring the success of global immunization efforts and help safeguard the tremendous investment behind this effort. UNICEF estimates that the cost of reaching immunization goals in the world’s 94 lowest income countries will be between USD50-60 billion from 2011 to 2020. With donations from Germany, Norway, the UK, the US and the Gates Foundation, GAVI announced in January 2015 that it will spend USD7.54 billion on its vaccine programs through 2020. The continued expansion of connected cold chain systems and equipment will play a key role in ensuring the success of these efforts.

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