Copy Cold Supply Chain Project 5k5x2h

Table of contents:

Description

Page No.

Contents

2

Executive summary :

3

Company profile

4 5-6

Cold chains role

6-7

Benefits of cold chains implementation Costs / risks of cold chains practice

7-8

Key issues of cold chains design and implantation

8-9

Cold chains in practice

10-11

Successful examples

12

References

13

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Executive summary Globalization is phenomenon in which the whole world became a small village thanks to the communication revolution, information technology , digital money and digital media, globalization also has created the concept of marketing worldwide , today it doesn’t matter how far the destination between the suppliers and the final customer. Have you ever thought of what it takes to bring you the fresh milk you mix with your corn flakes or your coffee, the cheese in your sandwich, the delicious salmon steak in your dinner plate, or even your medication and fresh flowers. To get a fresh bottle of milk all you have to do is to go to the supermarket or the cold store, pick one bottle from the shelf, pay the price and it’s yours. But to reach the shelf a bottle of milk has to travel long journey starts from the farm, to the manufacture, then to the supermarkets. Behind this journey there's a complex process which we call Cold Chain. But what's the cold chain? What it is used for? "A cold chain is a temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of storage and distribution activities which maintain a given temperature range. It is used to help extend and ensure the shelf life of products such as fresh agricultural produce, frozen food, photographic film, chemicals and pharmaceutical drugs". [1] In the next few pages this report will provide sufficient detailed description of the cold chain logistics, this description and through the profile of Agility company , Agility is one of the leading companies in the supply chain market globally, this report would cover all the aspects of the cold chain industry such as, the operation including the deg and implementing the practice , the market , and cold chain logistics key elements and role as a part of the overall supply chain Furthermore report moves analysis the cold chain benefits , risks and cost, through examples from the local market which have successful cold chain practices Finally I will provide a list of my references.

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Company profile: Agility is one of the leading companies worldwide, that provides the clients with very reliable integrated logistics service in order to help the clients meet their rapidly increasing needs for reliable logistics and supply chain services. In 1979 Agility was established in Kuwait and by 2004 Agility dominated the biggest market share in the Middle East. But the remarkable period in Agility history was between 2004- 2008 the company pursued an aggressive merger strategy, acquiring many global brands; All those acquired firms were unified into a seamless global network under the Agility brand name in 2006. Today with a team of more than 25,000 employees operating in over 550 offices and 100 countries. Agility brings efficiency to supply chains in some of the world's most challenging environments, offering unmatched personal service, a global footprint and customized capabilities in developed countries and emerging economies.[2] Products & services: 

Freight forwarding    



Freight Forwarding

Logistics :   



Agility Logistics Air freight. Sea freight. Air/sea freight. Road freight.

Logistics solutions. Warehousing and distributions. System and technologies.

Specialty services:    

Fairs & events. Chemicals. Project logistics. Fuel logistics.

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Logistics Specialty Services

Cold chain role: What's the cold chain: A cold chain is a temperature-controlled logistic refers to maintain the ideal storage conditions for perishables products through the packing and shipping system from harvest / farm/source to the final consumer, food supply chain is an ideal example of the cold chain, it's one of the chains that needs to start at the farm point and continues to the consumer point or at least to the retail point.[1] The Cold chain logistics infrastructure generally consists of:  Information Management systems used to Trace and Tracking etc.)  Pre-cooling facilities  Cold Storages  Refrigerated Carriers  Packaging  Warehousing Cold chain logistics role: Cold chains logistics provides supply chains for the vital products such as:    

Floral products (Fruits & Vegetables, cut flowers, herbals act). Dairy products (Milk, Yogurt, Cheese, Chocolates, Ice Cream act). Meat, Poultry & Fish sea food (fresh / frozen).. Chemical and pharmaceuticals.

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As we are living in a global business world today, where Retail is largest industry with market share over 40 per cent of the global market retail businesses started with corner stores and have extended to supermarkets, hypermarkets and modern retail stores. With the fact that food retail is the largest retail chain worldwide, the need for a reliable cold chain logistics rapidly increases due to developments taking place in food and retail industry. The cold chain is very essential element of a successful and an efficient food supply chain specially the food retail industry, with the growing demands to distribute and store temperature sensitive products in an ideal condition , and be able to supply the aggressive demand on ready meals, frozen products , fast foods components , dairy products and fresh food , those different types of products ,require several temperature levels, vary from cold chilled, medium chilled, to frozen, and exotic. These items are available in supermarkets around the world are just a few examples of fresh /processed products shipped over great distances by virtue of cold chain logistics.[3] Nevertheless cold chains have a vital contribution in some major industries such as Pharmaceutical industry oil and gas industry and petrochemical industry. A prove on the importance of the cold chain logistics role in those industries would be the rapidly increased investments in the cold chains made by the biggest companies in those fields. For example the demand on the cold chain logistics has been raised in the past 2 years, as increases have been seen in the global market, due to the spread of the H1N1 virus which known as Swine Flu, made the pharmaceutical companies whom producing and distributing the vaccine to consider investing in their cold chain operation / seeking a long term partnerships with specialized companies and cold chain providers. In addition Cold chain plays one of the basics elements roles in the oil& gas and petrochemical supply chains, since most of the chemical products are temperature sensitive and rely on the cold chain logistics to be transported to distant markets, combined with the previously discussed roles, all the above explains the vital role that cold chain plays today among all international trading countries in general and UAE in particular.[4]

Benefits of Cold chain logistics: Cold chain logistics is a system, the implementation of the cold chain system to the concerned industry increases the Efficacy, Efficiency and Effectiveness of the industry. Efficacy: does the system achieve its purpose? Since the overall purpose of implementation the cold chain is to provide the ideal storage conditions for perishables food and products during a supply chain from the origin point to the consumer/ retail point and insure that those products are delivered in a perfect condition, a well organized cold chain guarantees a perfect delivery condition. |Page5

Efficiency: how well does the system achieve its purpose? In a technical sense, efficiency compares the amount of beneficial effect with the inputs costs. in the cold chain case we should compare the financial cost of the cold chain system implementation due resulting actions with the financial benefits achieved, in another words , to prove the operation efficiency we have to compare the operation outcomes with cold chain implantation with the operation outcomes without the cold chain, and since cold chain is an essential element for some industries such as diary , food, and pharmaceutics, those industries will fail to make any profits without the cold chain logistics, however a well organized cold chain leads to:    

Reduces spoilage. Retains the quality of the perishables products. Extent the shelf life of products. Guarantees a cost efficient delivery to the consumer.

Effectiveness: A streamlined, well maintained cold chain     

Reduce costs. Reduce wastage. Reduce returns of expired stock. Improve product integrity. Increase customer satisfaction.

Major risks/cost of Cold chain logistics: As said before cold chain is a temperature-controlled logistic refers to maintain the ideal storage conditions for perishables products through the packing and shipping system from harvest / farm/source to the final consumer, There are various links in the cold chain, and all play a vital role temperature controlled Any break in the cold chain could negatively impact the quality of perishable products result in substandard quality,[1] such as:     

Bacterial growth. Softening. Unwanted ripening. Bruising. Texture degradation.

With the new Food & Drags Safety legislation now in force, a poor/weak cold chain leads to food/drags -safety issues, however this not everything , since cold chain consists of various links ,each link plays a vital role , therefore the main characteristic of the cold chain is that if any of the links is missing or is weak, the whole system fails, as a poor cold chain leads to poor quality , the poor quality leads to rejection of the consignments , high wastage , high returns of expired stock, which leads to health and finance failure. |Page6

Cold chain costs: The high cost of the cold chain facilities is a key issue and major challenge in the logistics industry, for the cold storage trucks , the price depends on model, capacity size , ACT , likewise most of the other cold chain facilities prices always depends on the requirements. But with the 3PL companies and logistics providers in the industry, the cost of cold chain logistics service became competitive, however for some companies they hire 3PL only when its necessary, depending on their own fleets and facilities to run their daily operation, for example Al-Marai dairy is the biggest dairy producer in the whole regain, the contribution of the 3PL/ logistics providers in Marai distribution process , doesn’t exceed 5% , the company dominating the Saudi local market and has the biggest market share over the GCC market with fleet over 2000 cold storage trucks and refrigerators, but not all the companies and producers are able to build their own cold chain fleet, therefore 3PL and logistics providers have to study the services cost in order to compete. Taking into consideration that air and sea forwarding required huge facilities that usually owned by very few numbers of companies, makes the 3PL and logistics providers the best options in the market.

Key issues of deg and implementing cold chain logistics: Cold chains logistics providers are seeking better solutions to maintain and monitor cold chains networks due to practice design and implementing. But the success of implementing cold chain takes more than seeking, and arises many issues; here comes the utilization of the cold chain quality indicators, but what's the Cold Chain Quality Indicator and what it used for? Cold Chain Quality Indicator: or CCQI has been established by the Cool Chain Association (CCA) it is typical an industry standard used to measures quality, and reliability, of the temperature-controlled logistic like Floral products (Fruits & Vegetables , cut flowers, herbals act) Dairy products ( Milk, Yogurt , Cheese, Chocolates , Ice Cream act) Meat, Poultry & Fish sea food ( fresh / frozen ) Chemical and pharmaceuticals also the human blood, by using a benchmarking system to assess transparent and comparable quality measures. The aim of the CCQI is to improve the consistency of cool chains across the globe. The CCQI has very similar requirements close to any other quality management system of the ISO 9000 type. The importance of meeting the CCQI standards is to help companies and logistics providers to:        

Identify the weak points in the chain designs and implementations. Identify the implementations risks. Increase the practice efficiency. Build a reliable reputation. Increase their market share. Increase the effectiveness of the marketing activities. Gain the customer trust. Increase their profits margin.

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As mentioned before cold chain is very complicated linked logistics network, the Cold chain logistics infrastructure generally consists of:  Information Management systems used to Trace and Tracking etc.)  Pre-cooling facilities  Cold Storages  Refrigerated Carriers  Packaging  Warehousing Effective Cold Chain Logistics is critical to many facts, such as measurement , control, and validation , success cold chain management involves continual monitoring of consignments temperature during the chain from origin point to consuming point and having proper action plans in place combined with technical in case of errors. The assurance that such transport of shipments is heavily temperature controlled is indigence required certain design and system requirements Measurement and Control: RFID Temperature Sensor Tags: Radio-frequency identification is a modern developed technology that uses communication through the use of radio waves to exchange data between a reader and an electronic tag attached to an object, for identification and tracking purposes.

Monitoring: Is a major issue and a continual need in the cold chain practice, RFID temperature sensor tags, is a priceless asset for cold-chain visibility and recordkeeping, enabling logistics providers to ensure cold chain quality assurance, identify problems, assign liability and take preventive measures. Besides temperature logging capabilities, RFID-Sensor tags enable automatic identification and tracking of individual products, cases, pallets and containers. Providing logistics with electronic documentation, automated track& trace capabilities, streamlined business workflow and increased efficiencies. Control: Besides identification and locating, Temperature Sensor Tag collects real time temperature of items, and transmits to reader for recording. Products temperature can be monitored and logged en route, and alarm once beyond the reasonable temperature. And it's useful to identify the exact time of temperature change. Despite the high costs of the RFID technologies , today more and more companies and logistics providers are turning to RFID-Sensor solutions, not only to meet increasing quality and safety demands and pressures from customers and regulatory sides, but also to be able to compete in an aggressive competitive market.[2] Validation is a Quality assurance process targeting establishes evidence that proves a high level of assurance that a product, service, or system accomplishes its intended requirements. This usually involves acceptance of fitness for purpose with end s and other product stakeholders. Is the process of checking that a product, service, or system meets specifications and that it fulfills its intended purpose. These are critical |Page8

components of a quality management system such as quality indicators which have been discussed earlier.

Cold chain logistics in practice: Who should implement? As mentioned before cold chain provides a supply chain for temperature sensitive products such as:  Floral products (Fruits & Vegetables, cut flowers, herbals act).  Dairy products (Milk, Yogurt, Cheese, Chocolates, Ice Cream act).  Meat, Poultry & Fish sea food (fresh / frozen)..  Chemical and pharmaceuticals. With accordance of the products needs a cold chain logistics service , industries related to those products, like producers, importers , exporters , traders , suppliers and retailers , should implement cold chain logistics. Food industry: Cold chain is a must basic element in the food industry ,in fact food chain is the major industry worldwide , food chain can be divided into two categories , fresh food and processed food , both categories involving cold chain logistics system for the fresh food such as fresh fruits and vegetables, the need for cold chain starts from the origin point , farm / harvest , and continue to the consuming point or at least the retail point. Companies / individuals whom producing/ trading fresh food must implement cold chain logistics, some of the processed food don’t need cold chain just like canned food for example, but most of the processed food involves cold chain.[1][2] Food retail: food retail is the largest retail chain worldwide, with rapidly increases demand , food retail is an extremely branchy net starts from the corner grocery, to the hypermarket, with millions of different fresh /processed products get shipped over great distances by cold chain logistics.[1] [2] fast foods restaurants: cold chain logistics is a must for fast food operation, with huge amount of fresh and frozen food that needed to maintain the daily operation of the fast food restaurants, and wither those restaurants relay on suppliers to maintain their needs of food, or they are self supply, in both cases cold chain involvement is an unavoidable.[2] Dairy producers: cold chain involvement in the dairy supply chain is an assumptive fact, it doesn’t make any difference if you are a supplier, producer, or retailer, if you are a part of the dairy production/ trading, cold chain is the only way to deliver your products. Air lines and hotels suppliers: to be able to supply such a huge demand, suppliers whom working with airports / airlines and hotels needs an extremely reliable supply chain, cold chain is an integral part of this supply chain. Pharmaceutical industry: |Page9

cold chains have a major contribution in Pharmaceutical industry, since most of drugs and medications are temperature sensitive products, producers, exporters and importers who involved in the drugs trading , must implementing a cold chain logistics , also hospitals need cold chain logistics in order to maintain their needs of drugs.[4][6] Blood banks: human blood might be the most temperature sensitive product; cold chain is a must in order to transport human blood. Petrochemical industry: most of the chemical products are temperature sensitive and rely on the cold chain logistics to be transported, suppliers in the field must implement cold chain logistics.[4][5] In addition Cold chain plays one of the major elements roles in the disasters supply chains management, that’s why all the organizations in charge to deal with disasters have logistics chain facilities and cold chain facilities, in order to be able to deliver, food medicine and human blood to places affected. While cold chain plays a vital role in some industries ,in which without cold chain the whole industry get paralyzed, for other industries the cold chain contribution is negligible, for example cold chain has no involvement in the clothes productions , automobiles & cars industry , computers manufacturing , electronics operation and supply chain and furniture industry.

Examples of companies in the local market that are successfully implementing cold chain logistics:

Al – Kabeer group: With history over 30 years, the Group has evolved into a multi dimensional, multiproduct business with offices, processing lines and cold storages in over 10 countries. It takes spared in distributing a range of over 300 products to 8,000 retail outlets. Al Kabeer producing a wide range of products covers all types of palates with one thing in common – good taste, The range includes meat and poultry products, seafood products, vegetarian products and ready meals. To be able to supply the increased demand on their products reach and open new markets, Al kabeer relay on very organized effective cold chain logistics, including sea / air and road forwarding , implementing effective cold chain logistics system to their operation makes the group able to cover the GCC and north Africa market, supplying number of the hotels , restaurants , and thousands of retails outlets. Gulf & Safa Daires:

The factory started its function since 1978 with a production capacity up to 3,000ltr/hr, developed and enlarged and by 2002 Safa was dominating the local market with capacity up to 16,000ltr.hr and covering most of the GCC market, Gulf & Safa dairies company is specialized in the production of Dairy Products such as | P a g e 10

Yoghurt, Flavoured Milk, Labneh, Akkawi Cheese, Halloumi, Majdellah, Double Cream from fresh milk in the Gulf region. Besides to Dairy, we have juice made from fruit pulp of all different fruits. With shining reputation and strong stable business Safa considered as the most outstanding plant supplying consumers with milk, curdle milk, yoghourt and cheese. Through perseverance and hard work, today the company has five major distribution centers around UAE and a fleet of more than 50 refrigerated trucks to ensure prompt delivery status within 24hours. This supply is not only reaching the hypermarkets but even to the small groceries. Every year the level of performance rises and Safa keeps on expansion and playing its active role in the development of local industry. Safa factory has actively contributed in the development of dairy products, implementing very reliable cold chain logistics system, makes the company able to supply huge number of retails outlets inside /outside UAE,

Best practice: It is sort of hard to evaluate cold chain practice in the local market, and find whom implementing the best practice, based on my point of view Dnata have the most organized efficient and effective supply chain in general and cold chain logistics in particular, From Dubai, Dnata has grown to become an internationally Ground Handling Agent, now with a presence at 21 airports across 9 countries. Starting in 1959 with just 5 staff, Dnata has played a significant role in the development of Dubai airport where they now handle a colossal 1.6 million tons of freight, 140 different carriers and more than 40 million engers annually. To do this, Dnata employs some 7,000 skilled staff, a fleet of over 6,200 pieces of equipment and some of the most advanced technology in the industry.

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References:

[1] Food and Drug istration (2007-06-22). "FDA Issues Dietary Supplements Final Rule". Press release. Retrieved 2010-06-04.

[2] Kohli, Pawanexh. "Fruits and Vegetables Post-Harvest Care: The Basics" (PDF). Crosstree Techno-visors. [3] Meyers, T (June 2007). "RFID Shelf-life Monitoring Helps Resolve Disputes". RFID Journal. [4] Pharmaceutical Press. "Rules and Guidance for Pharmaceutical Manufacturers and Distributors - Edition: 2007" Retrieved 2010-03-01. [5] "Real Time Location Systems". clarinox. Retrieved 2010-08

[6] Riva, Marco; Piergiovanni, Schiraldi, Luciano; Schiraldi, Alberto (January 2001). "Performances of time-temperature indicators in the study of temperature exposure of packaged fresh foods". Packaging Technology and Science 14 (1): 1– 39. doi:10.1002/pts.521. [7 ] Singh, S. P.; Burgess, Singh (January 2008). "Performance comparison of thermal insulated packaging boxes, bags and refrigerants for single-parcel shipments". Packaging Technology and Science 21 (1): 25–35 doi=10.1002/pts.747. doi:10.1002/pts.747 U.S.

Extra reading:

[1] Arabian Business.com, line 21-22. [2] Cool Chain Experts.com, line 6-8. [3] Arabian Supply Chain.com, line 16-17.

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