coolinsights TH E V I EW F R O M G EO R G I A TECH ’S I F C CENTER
Making The Case For Cold Chain
he need for an effec- benefit is in the area of product cold chain is not operated effec-
tive cold chain makes quality enhancement. This tively, there will often be a high
intuitive sense to most ensures that maximum shelf degree of temperature variability
participants. An effec- life is attained for the product. within the distribution process.
tive, fully integrated cold chain is When maximum shelf life is At vulnerable points of the
required to mitigate food safety attained, inventory is optimized, chain such as at the handoffs
risks, but at the same time is product waste is lessened, prod- between cold chain partners,
needed to ensure that product uct return costs (if applicable) the temperature may increase
quality is at its highest levels. are impacted positively, and the beyond acceptable levels. At
Most participants (produc- cost of customer complaint reso- other points, the temperature
ers, packers, transporters, lution is decreased. The benefits may then be lowered and the
processors, distributors and achieved can range significantly product brought within proper
retailers) would readily agree depending upon the actual prod- temperature. By David M. Sterling
that an effective, fully func- uct and the industry segment. The incremental energy costs
tioning cold chain process is Companies lose billions of to bring the product to proper dollar impact of these benefits.
needed. However, when invest- dollars in product waste every temperature are significant com- While percentages of product
ments must be made to make year. Proper replenishment plan- pared to the cost of maintaining waste, replenishment impacts
this happen, then the reality ning within an uncertain product the product at proper tempera- and other factors are often
of competing priorities often shelf life environment becomes ture with minimal variability. In quoted, there has been little
requires companies to make almost impossible. Building addition, many times as the empirical research to date of the
different assessments. additional inventory into the product is delivered to the store, full economic impacts that may
plan to account for potential it is common to experience an be obtained when the fully inte-
Economic Beneﬁts shelf life issues has obvious increase in product temperature. grated cold chain is achieved.
Like so many other areas costs in the additional inventory For example, in multiple stop
we evaluate in our businesses, and product waste. distribution made to stores, the Looking For The ROI
the investments we make in On the other hand, revenue product being delivered in the Companies must be able
improving our cold chain must loss associated with not hav- final stops may be especially vul- to make decisions to invest in
either drive economic benefit or ing product available for sale nerable to higher temperatures their cold chains based upon
meet regulatory requirements because of reduced shelf life because of several factors such such economic benefit data.
needed to conduct ou