Operational efficiency and sustainability in the Cold Chain Industry

2021.07.27 - GCCA 2

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OPERATIONAL EFFICIENCY AND SUSTAINABILITY IN THE COLD CHAIN INDUSTRY

By Kristin Meikle and Zunaid Lundell

INTRODUCTION

The cold chain extends far beyond the ordinary supply and logistics operations. Ordinary consumers rely greatly on its scope, evolving capacities, modern solutions, and ultimately its operational efficiency. This short article aims to provide key insight into how cold chain industry players can maximise or at very least improve their operational efficiency and do so in accordance with the overarching goal of sustainability. 

SETTING THE SCENE

In essence, the cold chain industry involves specialised storage, logistics and supply of products, both locally and abroad. However, unlike the typical logistics and supply chain, the utility of the products flowing through the cold chain are reliant on temperature-controlled environments. The most obvious products within this cold chain include food, beverage, pharmaceuticals, and healthcare products, but extends further to include biologics, chemicals, and synthetic products.[1]   

The risk, warehousing, handling, and transport complexities concomitant of the maintenance and security of these products indicates the need for integrated solutions and strict operational oversight. However, the nature and demand for these products indicates the need for sustainable practices.  

WHAT REALLY COUNTS

So where is the starting point? Operational efficiency stems from the internal practices of an organisation and is directly correlated to an organisations internal driving factors, be it the structures, management systems or human capital. A robust and effective business practice within organisational frameworks has a direct effect on an organisation’s orientation to the market and to society. [2]  An organisation’s success therefore relies on the implementation of modern solutions and integrated strategies to ensure the efficacy of its service. These strategies therefore ought to inform daily operations, streamlined processes, standard operating procedures, technical systems and the mapping out of the value chain – all with the view of mitigating risk and establishing scaling opportunities. 

However, an organisation’s operational efficiency extends beyond these core factors to include other micro environmental considerations such as supplier and customer relationships and functionality. In this regard, organisations ought to ensure their operational efficiencies and expectations are matched by their business partners and that customer expectations, services, management, priorities, and responsibilities are common cause and integrated. [3] Service level agreements (SLAs) and Key Performance Indicators (KPIs)  are a great means to this end. SLAs are aimed at ensuring integrated thinking, compatible management, and streamlined operating procedures between the contracting parties. [4]  Whereas standardised KPIs are an objective mechanism used for gauging service performance against benchmarked customer expectations, internal operational excellence frameworks and factual metrics. [5]  Together, SLAs and KPIs are foundational in ensuring service level management– the knock-on effect being operational excellence and increased return on investment. 

CONCLUDING REMARKS

By considering the demands of the market and deploying modern solutions, organisations will remain competitive and scale abreast innovative and sustainable practice. This author posits that operational efficiency mirrors a synergy-driven approach to corporate sustainability and responsibility – such that well-balanced and functional solutions create value within the socio-economic realm of corporate performance.[6]

REFERENCES

[1]  Roambee ‘Cold Chain Logistics Management and Monitoring – the Ultimate Guide’. Available online at: https://roambee.com/cold-chain-logistics-management-and-monitoring-an-ultimate-guide/ [Accessed: 3 June 2021].

[2] Daniel Wojtkowiak and Piotr Cyplik ‘Operational Excellence within Sustainable Development Concept-Systematic Literature Review’ Sustainability 2020, 12, 7933. Available online at: https://www.mdpi.com/2071-1050/12/19/7933 [Accessed: 3 June 2021).

[3] Charles Intrieri ‘Service Level Agreements: Clarifying the Concept’ Meetlogistics (2015) Available online at: https://meetlogistics.com/cadena-suministro/service-level-agreements/ [Accessed: 2 June 2021].

[4] CA Technologies ‘White Paper: Leveraging Service Level Management to Improve Service and ROI (2015) Available online at: https://docs.broadcom.com/doc/leveraging-slm-to-improve-service-and-roi-a-guide-for-msps  [Accessed: 17 June 2021]

[5] Symbia Logistics, 17 April 2019, ’10 Key Supply CHain KPIs You Should be Measuring’ Available online at: https://www.symbia.com/blog/supply-chain-kpis-you-should-be-measuring [Accessed: 17 June 2021].

[6]  Marcel van Marrewijk ‘The Cubrix, an Integral Framework for Managing Performance Improvement and Organisational Development’ Technology and Investment (2010) 1 1-13 (Available online at: https://scholar.google.com/citations?user=RjWFiDEAAAAJ&hl=nl# [Accessed: 2 June 2021).

[7] Alexandra Walsh ‘Standardising KPIs is key’ Cold Facts Magazine, Global Cold Chain Alliance, November – December 2019. Available online at: https://www.gcca.org/cold-facts-magazine [Accessed 3 June 2021].

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