Discovering broken links in the cold chain cuts food waste, saves money
Some cold-chain problems require common sense, but others need some science-based thinking to repair
Tippmann Innovation of Fort Wayne, Ind. recently completed a cold-chain assessment for Wawa Inc., one of the nation’s leading convenience store chains. Over the last 60 years, Wawa has developed a reputation for the highest quality products in the country.
In fact, I consider myself fortunate to have several Wawa stores near me, and when I want a deli sandwich, Wawa is likely to be the first place I go. For us “locals” Wawa got its start as a dairy located in…Wawa, Pa., about 15 miles west of Philadelphia. Ranked as America’s favorite convenience store by a Market Force 2017 survey, Wawa operates over 800 stores along the East Coast and Florida.
Nick Pacitti manages business development and heads up the consulting team for Tippmann Innovation. He has a long-standing relationship with the Pennsylvania based Wawa. In fact, he grew up near the original Wawa as a kid. For the past 20 years, Nick and Wawa have worked together to find solutions to broken links in the cold chain.
This past summer Pacitti and the Tippmann Innovation consulting team created a customized process in quantifying cold chain performance for product quality, from packaging to store delivery and merchandising. More important, the cold chain assessment has led to a wide array of operating improvements. As the cold chain performs more precisely and well within narrow control limits, opportunities expand for distribution and store delivery improvements. The Tippmann process ensures the system works as designed and, as such, provides optimal quality products for consumers, at a much lower cost.
I was eager to learn about some of the issues that Pacitti and Tippmann’s team study when trying to fix their customers’ cold-chain problems, so I asked Pacitti a few questions. What I found is the story is really more complex than I had first thought, and cold-chain issues can result in reduced quality and potentially severe financial losses—not counting lost consumer purchases due to quality issues that ultimately hurt the brand.
FE: What are some of the “broken links” in the cold food chain that have been issues over the years?
Nick Pacitti: To “tee” this up, we have been assessing cold chains for many of the largest grocery and foodservice chains, and many food and dairy processors of all sizes and types. We have also worked with distributors and logistics providers. And, we have been doing cold-chain assessments for over 20 years. Incredible as it may sound, the “links” begin to break down right in the warehouses of processors. With promotional spikes, production can’t keep up with demand and many times, products cannot chill long or quick enough before they have to be shipped.
With warm or “out-of-temp” products being shipped, there is no refrigerated trailer that can pull heat out of the product, so when the product is delivered to a customer it is many times refused due to out-of-spec temperature. The cold-chain segment is fraught with delays, distortions, differences and disputes. To provide for a more efficient and friction-free cold chain, we have installed quick-chill and quick-freeze systems that can cut product chilling or freezing time by 50 percent or more. For whatever reason, we continue to observe shippers loading “warm” products onto a pre-chilled refrigerated trailer, thinking products will chill down to their own standard. We continue to find shippers have loosely defined standards, and many times those cold-chain standards are not followed.
With poorly defined or followed standards, we are often called to investigate why products seem to be spoiling well before shelf life expiration. Through our testing protocols, we see products beginning to spoil at the receiving door. As quality compromise is an accumulation of abuse or mishandling, it does not take long for product to be compromised early in the supply chain. With extended supply chains, shippers and receivers are becoming more vigilant, but more work is needed in assuring optimal product quality throughout the entire distribution process.
One of the most problematic delivery methods is DSD, or direct store delivery. It is not unusual to see upwards of 85 percent of products being out-of-temp spec at store delivery. It is not unusual for these products to be either in a compromised or even worse, an adulterated state. Fortunately, these are quality issues, versus a foodborne illness concern. Nonetheless, consumers are quick to note the “quality promise” is not much of a promise. For clients like Wawa, who have perfected their cold chain, all of their products are delivered within a temperature range that ensures optimal quality. This happens day after day, delivery after delivery.
Retailers are better understanding these issues and are not only rejecting loads, but also fining shippers for out-of-quality-spec shipments and late deliveries. We work with companies that have paid penalties in the many hundreds of thousands of dollars annually. Many times, these shippers must dispose of those products, creating sizable spoilage and waste expense. Our goal is to eliminate the four “D’s” of cold chain management: delays, distortions, differences and disputes.
Another cold-chain break is how trailers are loaded, particularly for multi-stop loads. Many shippers are not familiar with hot spots inside refrigerated trailers. In addition, we have seen product on pallets stacked too high, obstructing air flow and warming product temperatures. This can be a challenge as the temperature indicator on the reefer unit will show an air temperature of—let’s say 38°F—but in selected areas of the trailer, temperatures can be well above 40°F.
It is not unusual to see warehouse temperatures warmer than needed due to poor circulation or when warmer products are placed in the warehouse. These sizable heat loads can wreak havoc on ambient warehouse temps, which ultimately have product quality implications, particularly for shorter shelf life products.
One of the most challenging temperature management issues is multi-stop store deliveries. It is not unusual for product temperatures to rise 10 or 20 degrees (F) from loading to delivery at the store. From our testing, this magnitude of out-of-spec can reduce shelf life by half, or more. This can certainly be a multi-million dollar impact on bottom line performance. In-store coolers and merchandisers can be problematic, particularly when they are over stacked.
For the most vigilant and quality focused companies, cold-chain links are evaluated, standards are set and they are related to the characteristics of the products and their ingredients. As you cannot design a cold chain to accommodate hundreds of thousands of products, you can design it to accommodate the most fragile and risky products.
FE: What, more specifically, is the process in quantifying cold-chain performance for product quality?
Pacitti: We collect, quantify, format and assess temperature data points, which can be hundreds of thousands of points for a typical assessment. We use temperature loggers that can track product and ambient temperatures every minute. We typically set the logger to retrieve a product and ambient temperature every five minutes. We select key products that are the most sensitive to temperature variations.
Our work is similar to the “canary in the mine” approach. When the canary would die, there was too high a level of noxious and harmful gas in the mine. As we select our products, we know the stability of that product. In other words, we know what temperature environment is optimal and how variations in the cold chain affect the quality characteristics.
Much of our work begins with testing the stability of perishable products. We do this by testing selected products in a food testing laboratory where we simulate various operating realities. From there we place probes in a statistically significant sample size that represents just about every type of delivery scenario. Once we understand the stability of products and how they behave in various operating environments, we develop an upper and lower control limit that becomes the cold-chain standard. When the cold chain performs as prescribed, we know we are better ensuring consumer loyalty.
As described earlier, cumulative average temperatures drive product quality. If not properly controlled, products can be exposed to varying temperatures throughout their life cycles: from production, to packaging through to storage, loading, delivery and in store merchandising. We compare these average cumulative temperatures to our science-based lab studies. This determines if product is delivered and merchandised in an optimal, compromised or adulterated state. Our work is very similar to establishing a mean kinetic temperature (MKT). Technically speaking, MKT is an expression of cumulative thermal stress experienced by a product at varying temperatures during storage and distribution. In other words, MKT is a calculated, single temperature that is analogous to the effects of temperature variations over a period of time.
FE: If you are consulting for a food or beverage processor and find there are spoilage problems due to temperature excursions in transit to a third-party warehouse, (e.g., the driver shutting off the refrigeration unit for periods of time to save fuel or door left open too long), do you also consult with the trucking company, or simply advise the food processor to find another trucking company?
Pacitti: We are often asked to solve this problem either by the distribution or trucking company or by the customer, which can be a retail grocer, foodservice operator, the food shipper or other affected members in the supply chain. Your question is more common than one would think. We have seen and continue to see the refrigeration unit turned off to save fuel. We also come across the turning off of the mechanical refrigeration unit by the driver as he or she says the sound is too annoying. This is more common among companies that have minimal, if any, cold-chain controls. The door of a trailer or delivery truck being left open for extended periods of time is typical of a lack of training. These occurrences, once again, contribute to the four “D’s” of cold chain management: delays, distortions, differences and disputes.
As claims accumulate against the trucker, which means penalties also accumulate against the shipper, a quick resolution has to be provided. In some cases, the trucker is “fired,” but with larger operations with contractual agreements in place, such as with a dedicated carrier, we will spend days, weeks and months in working around the clock in detecting and resolving cold-chain issues. We work with management and the drivers in providing declarative and strategic knowledge. By declarative knowledge, we instruct the driver on how to—or when to—defrost the ‘reefer’ unit, what are the required trailer temperatures, how to use the pass door of a bulkhead inside the trailer and the like. More important, we work with management and their drivers as to why these things should happen. Strategic knowledge assures the driver why products have to be maintained at 38°F (to assure maximum shelf life and reduce spoils) rather than saying, products have to be at 38°F.
With high driver turnover, training is becoming more and more problematic. However, it is necessary. As drivers become more knowledgeable, they become more motivated and perform at higher levels. In time, the quality orientation of truckers, distributors and 3Pls (third-party logistics providers) become institutionalized.
FE: What have been some of the operating improvements? Do they also save energy?
Pacitti: Once a client understands how well their cold chain works and how it can be optimized, we have quantified millions of dollars in annual cost reductions. Some of this comes from reducing spoils and waste, but most of it comes from productivity gains. When controls are in place, the proper equipment specification is in place, a formal monitoring process is in place, and most important, when associates are trained and understand the process in how it works and why it needs to work in prescribed ways, then all sorts of productivity gains can be made.
For example, for several clients we have developed a cold-chain management system where we have redesigned (and re-spec’d) their refrigerated trailers, prescribed loading practices and product placement in trailers, and implemented the use of bulkheads, we have been able to combine products in ways that increased warehouse productivity—as well as maximized trailer cube—in ways that save clients warehouse labor, reduce miles, reduce driver hours, reduce spoils and waste—and by extension, increased sales and revenue. In addition, we have reduced utility costs in being able to increase warehouse temperatures once controls are in place. With the placement of quick chill systems, we have also reduced inventory of bottled water and other beverages that are delivered at ambient temps. This can be extremely cumbersome in the summer as it can take days for this large mass of beverages to chill down. With an in-rack chilling system we reduce inventory by more quickly chilling product within eight hours (to 38°F) and not three or four days, and have product delivered to stores the day after it arrives at 90°F.
One of the most significant improvements that is realized by a well-controlled cold chain is product shelf life can be extended, particularly for fresh foods. An incremental one day added to a product’s shelf life can save a grocer or foodservice operator many millions of dollars in annual savings or margin improvement. For operators that can control their cold chains, there may be no need to lower temperatures to achieve an extended shelf life. As discussed, even a one-day extension will reduce spoils, waste and, most important, increase sales. We call this “maximum sell through,” which balances the maximum amount of product that can be ordered with the minimal amount of spoils, if any. We have also worked with clients in increasing their temperatures throughout their cold chain while ensuring their products can maintain their shelf life without compromise. In this case, utility cost drops with no impact on product quality.
As specialty foods and convenience are spiking in demand, the need to have the right product in the right condition at the right time and at the right price becomes a delicate balance. Cold chains are becoming the new strategic capability for all members of the food chain.
There are a number of technologies that can remotely control the refrigeration (reefer) unit of a trailer. These technologies can turn on or turn off a reefer, they can adjust temperature settings and dispatchers can also monitor trailer temperatures when the trailer is in the yard or are in route. For example, we have seen trailers being pre-chilled eight hours before they are loaded, when in fact, they can be adequately pre-chilled less than two hours prior to loading. When this can be done remotely, there is no need for a person walking the yard and turning on reefers hours before they are needed. We have also seen a wide range of temperature settings on trailers which can be highly problematic. These technologies save labor, save fuel and needless running of the reefer unit. For large fleets, six-figure annual savings are realistic.
FE: In our area, there are a couple more Wawa stores on the drawing board, pending zoning issues. Does Tippmann get involved at this level, or is it at a more macro level?
Pacitti: We have done much work at the store level in ensuring merchandising techniques are followed and equipment is functioning properly. Most of our consulting work is at the supply-chain level. Our main focus at Tippmann Innovation is in the design and construction of state-of-the-art refrigerated facilities.
About Nick Pacitti:
Nick Pacitti heads up Tippmann Innovation’s business development and consulting practice. As a seasoned supply chain executive, Nick has more than 40 years of extensive experience in designing, developing and delivering food logistics solutions. Pacitti’s industry and senior management experience with Kraft and Nestlé provides a true practitioner’s perspective in executing food logistics strategies required for efficient and safe operations. His successes include design and reengineering initiatives for a wide array of perishable logistics initiatives in improving product quality, service, cost performance and supply chain security. To date, Nick’s consulting work has helped more than 100 clients in managing close to 300 projects.
About Tippmann Innovation:
Tippmann Innovation’s consulting team is highly knowledgeable in the development, production, and distribution of perishable foods. The Indiana based cold storage construction company’s extensive experience in cold chain performance bring to the table knowledge and expertise that many processors and distributors do not have.