Cold Chain Logistics

University Degree Business and Administrative studies

UOWD Spring TBS 908

University Of Wollongong

College of postgraduate

Masters of Engineering Management

Supply Chain Management

(TBS 908)

Cold Chain Logistics

Done by: Khawla Ali Al Muhairi

ID number: 3336384

Submitted to: DR. ARIJIT SIKDAR

Introduction ……………………………………………………………….…..….. 2

Description of the Cold Chain Logistics ………………………………...…..… 3

Key Elements of the Cold Chain Logistics ………...…………..… 4
Cold Chain Logistics role in the Supply Chain ………………..…. 5

Major Benefits ……………………………………………………..……..…..…. 6

Major Costs and Risks ………………………………………………………….. 7

Key Issues in Designing and implementing ………………………………….. 8

Techniques and products that is suited for the Cold Chain Logistics …….… 10

Cold Chain Logistics Companies in the UAE …………………..………….…. 17

References ………………………..…………………………………………….. 19

The science of supply chain is responsible of managing recourse, in formations, people, and technology in a specific communication network that assure that a product or service is delivered from supplier to a customer in response with cost and time efficiency.

Supply chain involves raw material, spare parts, finished and unfinished goods which are the main parts of today's global economy that is affecting business all around the world comparing products that have better prices, reliable, and responsiveness.

The concept of Cold chain logistics is simple and interesting in terms of tracking and controlling the supply chain that includes very sensitive products such as in this research is food, it’s a very high valued product and cost driven factor.

Examples of cold chain are the food manufacturing industries, healthcare and Drugs manufacturing because they tend to keep products that need to be maintained at a lower temperature and it has the ability to deteriorate.

Cold chain is a temperature control tool the ensure the active life of food, chemical and drugs, it is a sub chain of the whole supply chain that includes manufacturing, retailing, storage, and distributing of temperature sensitive products that must be controlled under a temperature bases which basically range from 2 to 8 °C which some times tolerances depending on the actual product being moved in order to maintain their associative and characteristic value.

In order to understand the term 'Cold Chain' it's important to define each word separately. First the term 'Cold' that stands for the temperature needed to regulate the product from deteriorating when maintaining its initial and expiry date while processing, shipping, delivering and storing, and to prevent any possible growth of micro organisms.

The term 'Chain' states the monitoring and controlling of the whole chain being processed in sequence with the cold products in which each stage of processing, transporting, storing, distributing, and delivering are all attached together by order and has a documented communication channels and records.

Cold chain management is a control tool using technology to monitor the temperature of foods and products which are concerned with sensitivity and expiry to ensure the life time and quality of the product along with the different stages of the supply chain.

Studying the Cold Chain Logistics in the UAE is an important issue and a first phase that has to be build up initially, since the UAE is considered as an un-agriculture land

and a warm country, most of the products that are been traded inside the country are imported from outside by different transportation modes through air, sea, and land, therefore to ensure the quality and freshness of these products, they must be controlled under a plan through all the supply chain beginning from the manufacture all the way to the consumers moving through warehousing, retailers, and distributors.

Key Elements of the Cold Chain Logistics

There are three main key elements that have to be implemented in a cold chain, first is the Manufacturing stage where the temperature sensitive device is implemented, second is the Warehousing, Packaging, and Retailing stage where the finished goods is complete and received to one of the retailing points to be stored and then distributed or transported to the next stage, then the Consumer stage where the criteria of how the final product reaches the customer must be specifically designed.

For better understanding lets take a simple example of eggs and poultry products, the cold chain starts at the farm when the eggs are collected and being transported to the poultry plant where the eggs must be kept under a certain temperature and monitor against micro germs, this process of cold chain protect the products from being deteriorate.

When the eggs reaches the poultry products plant they must be checked through a certain process that maintain the hygiene and packed into safe plastic or cartons boxes where they moved after that to retailers through special transportation where the eggs are refrigerated.

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After unpacking the eggs from the tracks to the retailers stores, the eggs are kept in a low temperature until the customer buy it, the customer can be the individual consumer who will keep the eggs in home refrigerator or diary and grocery stores.

Cold Chain Logistics role in the Supply Chain

This is a preview of the whole essay

Cold Chain Logistics role in the Supply Chain

Supply chain is basically initiated when suppliers deliver their raw materials and spare parts to manufactures where the submitting of finished goods is done, and since the products we are dealing with in this case are very temperature sensitive that any slight decrease in temperature will affect its chemical component and physical appearance, therefore cold chain logistics must have control through all the supply chain logistics to maintain the natural or desired status of the product.

The role of cold chain logistics is to make sure that all its logistics operations of transporting, inventory, packing, and tracking software must have a thermometer scale and certain instructions in loading, uploading, and while moving from point to point.

Benefits are distributed through the whole supply chain including the manufactures, distributors, retailers, and consumers. To get the largest benefits possible it's important to recognize the connection between each stage in the supply chain and how they communicate, exchange information and understand their sourcing methods. This is important to overcome any threat caused by any misleading from each supply chain stage; the cause affect of this will destroy the hygiene and quality of the product.

In the previous example of the poultry products management the benefits are basically cutting cost by sharing information of sourcing and transportation, this way no wastage and spoilage during packing and unpacking, no duplication of the transportation lines will happened, therefore it will save time or raising in prices between distributors and retailers.

These benefits are reflected to the consumer's satisfaction of the products freshness, quality and life time. The most important industries that a Cold chain logistics involved in and have a positive growth are the fruits and vegetables, milk products, packed foods, beverages, biological, and meat products

Products in each industry are starting up with cold chain logistics from the manufacture stage where they need to be at a specific temperature to solid their elements either chemical or biological parts; for example dealing with drugs, pharmaceutical, and body organs in the biological industry, each of them have to be maintained at a different temperature. For example the body organs must be frozen as soon as they are extracted; this is similar to the Meat products industry where the meat must be frozen to ensure the quality of the meat for the longest time, while the drugs have different procedure by isolating their environment to make sure not to interact with the surrounding or get infected by germs.

The main challenges that face the Cold Chain Logistics is to mitigate risks by maintaining a certain level of temperature to increase the shelf life of a product and to cut costs of damaged and corrupted products. As the requirement of cold chain logistics are rapidly growing with a cost driven technique like for example the industries of drugs manufactures, healthcare centers and food manufactures where they all deal with raw materials that need to be controlled under low temperatures to meet the higher policies of the government to maintain quality and cost driven.

Cold Chain Logistics face risks when being transported and packed since theses two are considered a physical transformation of the product if they are not taken well care of isolating, handling, and low temperature, suppliers decide of the transportation and packing method all the way of the supply chain with agreement of all different parties collaborating in the supply chain.

One of the most challenges facing the Cold Chain Logistics is the temperature sensitive product which is required in the highly growing countries, where economy is based on fast food industries and canned foods beside fresh foods, healthcare products, and drugs for these products to be transported globally, it requires an advanced technology, for example the servers which are made of microprocessors that are used to save information, performs operations, and link networks, these servers are saved in an isolating room called the 'Data Center' where the servers are kept in lockers supplied with the proper amount of power and power redundancy, they are placed in a away where the cold air comes from under the ground hitting the front side of the servers and the hot air goes out from the back side going all the way up in a cycle, these air conditions are called CCU and includes a humidity control to prevent any short circuit in the micro chips.

Cold chain logistics is concerned as well with regulatory bases, as the cold chain industry increase constantly especially regarding transporting pharmaceutical sensitive products its compulsory to ensure the quality and safeness of the product by obeying demanding authorities such as the (FDA) US Foods and Drug Administration, the Internal Quality Assurance departments, and industry forums and industry associations, the cold chain logistics are not only required to obey these external regulatory but it must also forecast, compare with other processes, improve their own chain network and assessment and review their results, this procedure help the cold chain logistics to cut operating cost, and perform in a better quality.

Developing a high technology tool in the industry allows the use of advanced equipments in manufacturing; we take the same previous example of manufacturing microprocessors which are temperature, humidity and conductivity sensitive. The characteristics of this industry require not only quality but also how is reduce cost, cost in not only related to manufactures but also to every stage in a supply chain, here comes the challenge of designing a responsiveness and efficient supply chain with insurance that it will cover potential risks.

The main issue in designing is reaching the shipper's needs, requirement, and expectations. In order to meet these requirements there must be a business process that provide solution to connect the customer need with the suppliers offer and assure the availability of products and secured cold chain. For more understanding of the designing and implementing phase, the cold chain is differentiated based on their category.

One of the aspects that are considered while designing is the Temperature Sensitivity of the product characteristics, based on the researches and development made on the chemical component of the product and the requirement defined by the authorities, they agreed on an optimal temperature required for the storage and the acceptable fluctuation. Since the differences between the requirements are very huge and therefore the temperatures of each component differ as well, there were common ranges as the following:

+2’C - +8’C two to eight degrees Celsius, it mean that a product must not be frozen nor to be warmer than 8’C.
-20’C negative twenty degrees Celsius, it required no to be warmer than

-20’C.

+15’C - +25’C which is defined as the Room Temperature and must remain in this range.

Manufacturing process also affect the design of a supply chain, depending on how the process flow, what channels it uses, and the complexity of the process included in any job, obviously who decide on the business process and stages development are the shippers, the implementation of the supply chain depends on the desired destination, total number of channels served, and how sensitive is the shipment as in our case is the temperature sensitive products.

The logistics behind this is based on several questions such as, what is the starting and ending point for a logistics supply chain. And how is the responsibility managed through each stage of the supply chain? Three concepts will be discussed bellow as the following:

Concept 1: the door to door shipment is a logistic operation that performs from door to door.

Concept 2: the segment defined shipment uses different logistics solution at each stage of the supply chain depending on the type of shipment, for an example a shipment can move from a manufacturer to an air or sea port or a shipment can move from port to port.

Concept 3: the process cycle time is the minimum needed hours and days for the logistic concept and destination to do its job, for example maintaining a low temperature for the cold supply chain products independently from the external environment.

By looking at the above concepts a list of requirements is derived, in the most common situation the temperature used is ranging from 2’C to – 8’C, door to door shipment or door to air/ sea port or port to port, and the block buster shipment, for an example the basic products as the vaccines, drugs, and insulin are shipped using these concepts.

Companies who use the Cold Chain Logistics are basically using two solutions available in the market, these solutions are the Active Solution and the Passive Solution, the most popular one is the Active Solution.

Depending on the shipper requirement list, a supplier can examine the effectiveness and efficiency of the solution and decide on which type of solution suits their process the most and maintain the Cold Chain Logistics through all the stages either using the Active or Passive as motioned bellow.

The Passive solution process starts by packaging into boxes which are then insulated and stabilized a certain temperature features either hot or cold packs depending on the nature of the product to keep its physical components. After that the shipment is moved into the transaction ballet. Unlike Active solution that uses self regulation mechanism from temperature control.

The Passive solution is provided by many companies some of them are motioned bellow:

SCA
ThermoSafe
CoolLogostics

Passive solutions provided by theses companies any so many companies over the world provide an excellent instillation properties and a huge thermal capacity in packing which therefore maintain the product temperature at a stable range for the longest period of time.

There are different kinds of boxes, and sizes depend on the shipment demand if small, medium, or large. However, the Passive Solutions have the following disadvantage:

Expensive and needs labour for packing which increases the resources and wages expense.
Passive solution is considered as a one way use only and therefore it increases the cost of manufacturing boxes, moreover it has a negative affect on the environment because the plastic materials are not recyclable.
It is normal if the desired temperature vary while the thermal packing but it is dangerous if the temperature deviates than the required level then the chemical status of the product will change than the desired component.
Transportation must be controlled all the time and new solutions must be introduced for every movement transaction.

An active solution includes a distribution boxes inside and they are easier to pack. Mainly it's processed through a transportation platform to serve door to door shipment only after they are charged, this processes is done by loading dry ice.

The strength and weaknesses of the Active Solutions

The active temperature control systems are the basic products available in the market, for an example the (Insulated Container Shell) that equipped active dry ice for cooling purpose. To study the strength and weaknesses points in the Active Solution we have first to take a live example that its already existed in the market, in this case we are going to study the (Enviro-Tainer Container) which is owned by Enviro-Tainer AB. And then discuss the benefits of the system.

The packing and transporting the platform is one processes, first the container is build due to the company requirement in different sizes, like in this case the airline Unit Load Device (ULD), an example of that is the RKN (LD3) and RAP (LD9) sizes. The main benefit of this types is that it can be treated as any normal (ULD) and can be loaded in the airport without unpacking or disassembling, this advantage save time in moving the container inside the airport from point to point in the applicable position.

The basic features in the temperature control containers, by looking at the passive aspect of the container, it include the roof, doors, walls, and insulated base. In order to decrease the heating effect due to the sun light while transporting the containers.

A white surface is provided in the panels and the active part of the system contains an airflow controller and a thermostat that ensure the stabilization of temperature by measuring then recording the inside temperature of the container, these two techniques are based on a battery power unit. The question now is how the air is getting cooled? The container includes a fan that drives the air through a compartment that is loaded with dry ice so the air gets cooled; the dry ice job is to solid any material that requires cooling coverage by dissolving to CO2. In the case of Envirotainer container, the dry ice is separated from the surrounding air of the products to compartment the dry ice from the product and circulate the air around the bunker through a heating exchanger.

The Unbroken Cold Chain Supply concept is simply done by providing a separate door to load the dry ice without opening the cargo doors; also you can access the control unit from outside the container with the option of a locking lid. This simplifies the management of the entire system. The whole cold chain system is controlled and maintained easily by providing a battery refill system for the dry ice without the need of disturbing the internal temperature in the container environment where the sensitive temperature products are placed and shipped.

The Active Solution requires no special packaging or additional packing materials, because the cargo loading area have a double wide doors to access the products and a special security features regarding the locking mechanism, the containers also can be loaded by a standard pallets that minimize the cost of changing the pallets every time at the airports or the shippers manufacturer. On the other hand the passive solutions are very complicated in terms of packing and loading it consumes a longer time and the cost of resources.

As every system has limitation in its performance, the active temperature control solutions have the following weaknesses:

The exposure to extreme conditions, by default if the container is under high temperatures the cold air is automatically turned on, to achieve the highest efficiency the dry ice containers is set at the environmental temperature which is usually higher than the product desired temperature. In another scenarios if the container is under low temperatures then the inside properties installed in the container will be exploited and the inside temperature will fall bellow the desired point. But what is the maximum time a container can be exposed to different levels of temperature? As a standard the longest period of times can be eight hours and the shortest period of time is one hour times , a short time period can easily be controlled but a long time is difficult if the temperature was -20’C then the product temperature will drop because of the system failure. For this situation a solution called "Sop" is used in the dry ice containers case to measure the target container temperature for handling, transporting, and storing.

One of the major risky operation at the supply chain logistics is handling the containers as it related to human scope of work, humans must supervise and control the process of dry ice containers while handling, transporting, and storing, training human resource must be a step 1 to face this huge challenge second is by applying new customized techniques by the manufacturer and the shippers to go over any human mistake. Some of the latest technologies that are handled by the Active temperature control solution are:

Dry ice cooling and battery powered heating elements.
Battery powered electrical heating a compressor cooling.
Peltier powered cooling and heating.
Fuel cell powered system.

Bellow is some devices that are dealing with monitoring and recording the temperature in a Cold Chain Logistics operation.

TRANSI-TEMP II-RH

This is a product have three LED lights(yellow/ green/ red) to indicate the status of the products, its specialized to monitor and record temperature and humidity of the wine products in the shipments, all sensors in this device are internally installed.

EasiCool

Is a air conditoner that is quit and easy to install, its basically used in Data Centers that required an isolidated enviroment to ensure the safety of the servers, cables, and fire system in a high tech area where performance and relibale are essential. EasiCool is also controlling the air in the possible foot print beside calculating the area and power concumed in the data center room in order to decrease the temprature of the equipment. In the Cold logistics markets information technology devices are very imported to be cooled down and manitain a situable humidaty level to prevent the humadity and water leaking from making short circuit in the mini chips installed in the data center devices.

ULTRA-SHOCK – EB

Ultra shock – EB is a battery that operates data recorder of temperature, pressure, and humidity, through a 3 axial shock. It operates continuously at 500 Hz, every shock sensor can record date and time at peak acceleration at user defined intervals. Another device is coming with the ULTRA-SHOCK which is the MADGE-TECH software that calculates the statistics for maximum, minimum and average values for all the requirements.

TEMPRETIEVER-RH

This device includes a LED display that easily show a light or an alarm if one of the sensors detect any different temperature or humidity, its useful for insulated containers and huge warehouses to track big shipments.

The UAE is a huge global market that deals with all type of supply chain because of its geographical location in the middle of Asia, Africa and Europe, beside the flexible economic policies that engorge exporting and re-exporting. There are so many companies in the UAE that deal with Cold Chain Logistics strategy and equipment; some of these companies are listed bellow.

GAC Logistics Park FZCO :

GAC is a global provider of Logistics located at Jabel Ali Free Zone, it provide sea shipping, marine and related services, it provides outsourcing as a third party logistics provider for companies, GAC ensure the safety of customers storage, minimum inventory required and efficient response time.

GAC also provide trained labour and specialized warehousing facilities that have control on temperatures from +18’C to -30’C

AL- AIN Dairy:

Is basically a dairy farm that was established in 1981 by H.H Sheikh Zayed Bin Sultan Al-Nayhan , AL-AIN Dairy control their own Cold Chain Logistics operations which concerns with supplying fresh milks, this process conclude of eight steps starting from the cow farm to the customers. The main target is to keep bacterial pollution at the minimum levels; temperature degree is set to +4 Celsius through all the processes stages.

The first step after the milk is produced and extracted from the cows, it is sent to the diary processing plant where they make laboratory experiments on the milk freshness and quality on standard bases.

Then they store the milk under +4'C before pasteurization, after that he milk is homogenized to prevent the fat from gathering, the last step is by packing the milk and distribute it to retailers keeping the product at the required cooling level while delivering. Or by sending the milk to different dairy plants to transform it to another products like yogurt and chess.

AL-AIN Cold chain operations ensure the validity of their products and provide confidence to customers of the freshness and quality of AL-AIN products because of the high conditions their products is being controlled and maintained.

Global Shipping and Logistics (L.L.C):

GSL is a premier distributor and deals with warehousing in Dubai and the Gulf. It offers controlling warehouses infrastructure that have a temperature control ranges from -25’C to desired environmental temperature and provides solutions for warehousing and distribution. GSL is a member of ALSHIRAWI Group that has been established in 1975.

GSL provide special services for the food and beverage industry, they store a wide range of candies, food, beauty products and medicines in the standard temperature and provide environmental stores.

GSL also interact with the healthcare Industry by providing air freight for different types of healthcare products and hospital deliveries through special containers that include temperature data records.