As a blast of freezing air meets you at the door, insulated apparel is the only protection from the surrounding negative-Fahrenheit environment. This marks your tenth visit today into the sub-zero zone where pallets of product await.
No, this isn’t Antarctica, but rather a cold storage distribution center in Arizona in the middle of summer. Regardless of where you’re located in the cold chain, these conditions are a daily part of DC fulfillment operations.
Cold Storage Complexities
Harsh, complex, and interconnected describes cold storage distribution. Managing operational costs within these facilities is paramount. Automated cold storage DCs with several temperature zones requires real time monitoring of doors, loading docks, compressors, warehouse equipment and the like to ensure efficient use and allocation of resources.
Refrigerated storage spaces require temperatures between 32- and 42-degrees Fahrenheit, while freezer storage zones maintain temperatures at 0 degrees Fahrenheit and below. Star Energy says a study of annual energy intensity found that cold storage facilities register 101,000 BTU/per square foot, an amount three-times higher than non-refrigerated warehouses.
Temperature control is only half the equation in a cold storage DC, however. The other half is regulatory compliance. When dealing with food and pharmaceuticals, U.S. Food and Drug Administration (FDA) regulations abound—even more so in a cold-storage facility.
The FDA extended food safety regulations in 2011 with the passage of the Food Safety Modernization Act (FSMA) and its seven rules to further prevent against food contamination and recalls, but also to enhance track and trace procedures when recalls occur. Adhering to regulations to prevent cross-contamination, maintain temperature requirements, and ensure proper material handling are all but expected in a cold storage DC.
At the cornerstone lies a digital warehouse management system (WMS) providing support toward those duel efforts (temperature and regulations), while also orchestrating product flow and fulfillment.
How dependent are cold storage DCs on their warehouse management system? Shifting supply chain dynamics provide an answer—much more heavily dependent based on changing consumer behavior. Consider the evolving frozen food market. UnivDatos Market Insights (UMI) says the global frozen food market is projected to increase in value from US$232.42 billion in 2019 to US$320.06 billion by 2026, and doesn’t even take into account home delivery meal kits.
“Rising demand for convenience and Ready-to-Eat (RTE) food products is a major growth driving factor for the global frozen foods market. The longer shelf life of frozen foods without decay is also boosting its demand across the globe,” says UMI. “In addition, the easy availability of these foods in different types has also catalyzed the demand further.”
A more immediate demand shift is online grocery ordering due to COVID-19. The strain on cold chain distribution channels cannot be denied with most supermarkets experiencing stockouts of frozen food and many other grocery items. Based on the results of its Brick Meets Click/ShopperKitOnline Grocery Shopping Survey, overall monthly online grocery order volume has increased 193% in March 2020 compared to August 2019 levels.
“COVID-19 is changing the way many Americans shop today, but will this increase last? When asked how likely they were to continue using a specific online grocery service after the COVID-19 crisis subsides or ends, 43% of the survey respondents indicated that they are either extremely or very likely to do so,” reveals Brick Meets Click.
What does this mean for cold storage DCs and the warehouse management systems that coordinate them? According to CBRE, “Considering that 95% of food produced in or imported to the U.S. goes through third-party distribution centers before reaching consumers, this shift undoubtedly will impact the cold storage sector.”
CBRE’s Food on Demand Series: Cold Storage Logistics Unpacked, reveals an “additional 75-million to 100-million square feet of freezer/cooler space will be needed to meet demand for D2C (direct to consumer) food delivery and BOPIS (buy online and pick up in store). The COVID-19 pandemic is accelerating this trend.”
Optimize Your WMS
The strength of a WMS is its real-time inventory management and visibility capabilities. Due to SKU variety and temperature-sensitive attributes (e.g., producer, lot number, expiration date), appropriate product tracking and fulfillment decision-making are essential— helping you lower operation costs while processing orders for fast and accurate delivery.
Amid the growing trend toward grocery e-commerce and the uncertainty surrounding COVID-19, how can a cold storage facility leverage its warehouse management system in this new, evolving environment?
As an article in Food Logistics points out, a WMS should provide a real-time snapshot of product anywhere along its route in the distribution center from the point of arrival through shipment. Automated data capture of product temperature and location throughout the DC is a best-in-class function and provides greater efficiency and transparency—all critical to alerting operators about temperature fluctuations or if a product recall is necessary for a specific lot or batch.
“A WMS should enable users to sort by lot, supplier lot, dates, job, customer order, etc. In situations where the manufacturer is the distributor, backward lot traceability is also relevant. You must know what ingredients went into finished goods and be able to initiate steps to recall products based on that knowledge,” according to the article.
Integration of your WMS with automated material handling equipment, such as AS/RS and automated guided vehicles, provides greater pick efficiency for temperature-sensitive product, while also addressing labor challenges. Should a product recall occur, this automation can quickly retrieve the batch or lot affected.
While automated equipment is valuable inside a DC, integrating a WMS with other system technologies, such as WES, EDI, ERP, TMS, and others, extends traceability beyond the dock doors. Temperature data, product barcode information, and other critical datasets ensure that perishable or frozen food meets regulatory compliance throughout the supply chain and that shipments are traced end-to-end.
As stated in a Food Logistics article, “Best-of-breed WMS and supporting supply chain technology, while a significant organizational investment, holds the key to success for food and beverage distributors in today’s omnichannel world. Simply put, it’s impossible to satisfy the complexities created by emerging distribution channels, new regulatory requirements and demanding consumers without these technology solutions.”
There’s no doubt that the coronavirus pandemic has impacted cold chain distribution centers, their suppliers and customers. A survey by the Global Cold Chain Alliance, 2020 COVID-19 Cold Chain Business Impact Survey Summary, indicates that 54% of respondents experienced some type of revenue decrease when comparing actual Q1/Q2 revenue versus Q1/Q2 pre-crisis revenue expectations.
According to the survey, the leading business response to COVID-19 was taking extra measures to protect the cold chain workforce with staggered shifts, social distancing, and remote work. In fact, the percent of at-home-workers increased from 4.5% pre-crisis to 19.8% thus far during the pandemic.
While the majority of workers perform their job onsite, cold chain DCs are using their WMS to better protect the workforce as well as comply with Centers for Disease Control and Prevention guidelines.
Social distancing (six feet or more) within the warehouse is occurring on a few different fronts.
First, zone picking helps keep workers within a specific area of the warehouse to pick orders. As an article from IT Supply Chain suggests, rather than workers traveling across the warehouse to pick orders, there’s a structure to how they’re stationed.
“Then, once orders are picked from their designated locations, they can be transferred to a central marshaling area for consolidation. By organizing operatives to be well spaced along a marshalling line, or expanding the number of marshalling areas, warehouse management can maintain or even exceed the 6 feet social distancing guidelines. Here, the stock items picked can be sorted into individual orders and sent off for dispatch.”
Second, using technology such as hands-free voice picking can provide safer working conditions and quicker pick speed within designated zones or sections of the warehouse. Another benefit is that workers have their own headsets. While there may be shared processing devices, those can be sanitized between shifts.
“When fulfilling bulk orders, process safety becomes even tighter as palletized stock can be transported by FLT and requires no direct handling.”
Third, providing warehouse workers with personal protective equipment (PPE), hand sanitizer, and signage for where these resources are located and guideline reminders are essential. A WMS can now help enforce social distancing guidelines within the DC by monitoring aisles, pick zones and packing areas.
COVID-19 continues to present challenges for cold chain DCs. It has also provided opportunities as demand from grocery e-commerce accelerates. A robust WMS like WAMAS from SSI SCHAEFER can help bring balance between the two and protect your workforce in the process.