Bob Trebilcock: Welcome to The Rebound, where we'll explore the issues facing supply chain managers as our industry gets back up and running in a post-COVID world. This podcast is hosted by Abe Eshkenazi, CEO of the Association for Supply Chain Management, and Bob Trebilcock, Editorial Director of Supply Chain Management Review. Remember that Abe and Bob welcome your comments. Now to today's episode. Welcome to today's episode of The Rebound: Taking the Temperature of the Cold Chain. I'm Bob Trebilcock.
Abe Eshkenazi: I'm Abe Ashkenazi.
Bob: Joining us today is Matt Ott, President, and CEO of the Global Cold Chain Alliance. Matt, welcome.
Matt: Thanks so much for having me. It's a pleasure to be here.
Bob: Today, the day that we're recording this, the FDA is about to approve the Pfizer vaccine, which means the requirements for storing and transporting at sub-zero temperatures is back in the news. It's getting a lot of attention. Even before the pandemic, there was an uptick in the construction of cold storage facilities, both refrigerated and freezer facilities. It's driven in part, I believe, by the increase in e-commerce for refrigerated and frozen foods and meals that we might previously have purchased at the grocery store, eaten at a restaurant, or taken home.
Indeed, the ability to maintain the right temperature as product travels through the supply chain extends the shelf life of fresh food and ensures the safety of the supply chain. Let's take the temperature of the cold chain. Matt, I want to start with a simple question. What's the GCCA, who are your members, and what do you do?
Matt Ott: Great question. GCCA is the Global Cold Chain Alliance. Really, we're comprised of four different organizations. We've got three trade associations under the alliance, the International Association of Refrigerated Warehouses, or cold storage, if you will, the International Refrigerated Transportation Association, or cold transportation, the Controlled Environment Builders Association, all the folks who really are responsible for the building and maintaining of all the cold storage facilities across the world. Really, those three associations, they provide resources in the form of research or education, training, and even advocacy.
Really, each segment within the cold chain, we want to make sure that they're well-positioned to provide the safest, highest-quality goods across the world. We also have a fourth organization, which is our philanthropic arm. It's the World Food Logistics Organization. This is a foundation that's really focused on the development of the cold chain infrastructure across the world. We do a lot of projects in combination with other organizations to ensure that a good portion of the world that doesn't have the infrastructure to support cold chain can do so in the future.
Abe: Matt, you and I have been in the association industry for quite a while. Trying to explain what association professionals do has been a challenge. Trying to explain what supply chain did prior to the pandemic was a challenge. I'm sure that you may have some of that as well trying to explain to your family and friends what the cold chain is. Put it in layman's terms, what does it mean to have a cold chain? How does your company and how does the association view that for the industry and for the companies that manage this system?
Matt: Absolutely great question, Abe. I've only been at GCCA now for six months. Before I was at GCCA, I was at the National Groceries Association for about a decade. Certainly heard a lot about cold chain, but certainly, I've learned a lot in the last three months, even more so the last six months, just as everybody else has from the media. You can't get away from media without hearing cold chain probably at least once every couple minutes. I gave my staff an exercise. I asked them to go home over Thanksgiving, or if they were doing it virtually, think about how they would explain the cold chain to their friends or families, whatever it may be.
Really, the way that I always describe it is, the process of what we do is very complex, but really what we do is very simple. The cold chain is really just the distribution network that's required to move perishables. Whether that's food or pharma or non-consumables like say flowers, any of those things that require a temperature-controlled environment, we're responsible for moving it and storing it. If it needs to be cold from creation to consumption, we're probably touching it.
Bob: Matt, in my introduction, I talked a little bit about the amount of construction that's going on in temperature-controlled environments. How is the space changing? In other words, where were we? Where are we now? Where are we going?
Matt: Here's the deal. Everybody's always needed food. From that aspect alone, there's always been some semblance of a cold chain. We've always been there in some respects, and this even goes back to the turn of the last century. You've had caves that were converted into cold storage facilities and the transportation was wagons with ice or whatever it may have been. Just like any other industry, we've seen a tremendous amount of advancement over the years. For us, it first started with electricity and different types of refrigerant that were put into use to make the whole process more effective, more efficient.
We moved on to, most recently ammonia has been the primary refrigerant, which has been a huge accelerator in terms of allowing us to go further with product or keep product even colder. Now you're starting to see even more changes. We see more environmentally friendly systems like CO2 come into the fold and be utilized across the world. Just like any other industry, the pace of change is just so much greater today than it ever has been before. Technology has really, really provided us with some opportunities that we probably couldn't have ever even imagined possible, even as most recently as five years ago.
As our industry continues to make investments, we're really doing so to ensure that the cold chain is operating as effectively and efficiently as possible and making those advancements so that we can really, as I said before, try to provide the highest quality, most safe goods across the world.
Abe: Matt, you brought up the concept of technology. Obviously, within supply chain and the broader market, digital transformation is on everybody's agenda right now for organizations responding to the pandemic and trying to position themselves for sustainable success. When you take a look at technology, temperature-sensitive sensors, IoT, a lot of AI, a lot of robotics, when you take a look at technologies, which ones are you watching that are going to have a real impact on cold chain?
Matt: Great question, Abe. There has just been a tremendous amount of technological advancements in the industry and really touching every facet of the industry. I've actually been out there traveling and visiting some of our members' facilities and the stuff I've seen is just really, really cool, if you pardon the pun. Really, really innovative stuff, and stuff that really you can actually see a tangible improvement in terms of what it's doing. I say on the stuff that you can't see as much, but it's really, really important, the use of business intelligence and other software packages that are going to improve logistics, workflow management, and operations.
It's continuing to improve our members' ability to both track the product itself, but also maintain the quality. We're able to check in. You mentioned temperature monitoring software, that exists throughout the supply chain. It also allows us to provide our customers, whether it be the CPG companies, the producers, an opportunity to check in on their product that we're handling. On the other end, the retailers or foodservice distributors, or whoever it may be that we're handling the product over to, they have the ability to have a lot more transparency than they've ever had ever before. That's really as a result of technology.
Automation, key area of investment, once again, with a real focus on efficiency. I would also say safety. The more advancements we have in automation, the more we're able to protect our workers in the workforce. We have forklift monitoring systems that allow us to track whether or not the driver is operating the machine safely, and certainly provide reports on that. Even improvements like Mobile Racking that allow warehouses to make better utilization of space, fewer isles. I saw a couple of fully automated warehouses. They control the product literally from the time that it's checked to the time that it leaves.
Just all really amazing stuff. I just can't wait to see what comes next and all the improvements that we're going to see in the next 1, 2, 3, and 10 years, really. In 10 years, the whole industry, I bet, will look completely different just as it did 10 years ago from today.
Abe: Let me follow up on that. Are people ready? The technology investment is there and we're seeing it across the board. Are organizations ready with their talent? Because oftentimes, when you talk to somebody about storage or transportation, they think of it's either repetitive, dull, or dirty work in a warehouse. Obviously, as you're talking about robotics and technology, this is a tremendously different environment than what I think most people would think of when they think of a warehouse.
Matt: Sure. I think that ultimately if they're not ready, they're making an investment so they will be ready. We're utilizing this as an opportunity for workforce development across the industry. This is a great recruiting opportunity because generally speaking, if you think cold storage, if you think cold transportation, you probably have a different viewpoint just based on whatever-- The first thing you think about is probably not robotics and automation and technology. This allows us to give a new lens on what the industry is and why you might want to work here. I think it allows us an opportunity to be an employer of choice in the future. We're definitely looking at it from all angles and certainly, we think it's going to be a differentiator for us.
Bob: If I can weigh in there just one second because I read about the warehousing industry wearing my Modern Materials Handling hat. Cold storage is something that historically we didn't really pay a lot of attention to but have in the last five years because, as Matt said, you start seeing the footprint for the cold storage warehouses is getting smaller and smaller. The height is getting higher and higher. If you go down to Midway airport in your area, you'll see a preferred freezer warehouse off the highway. The big challenge they're facing is they can't get people to work in a freezer warehouse environment because it's just miserable.
Automation and fully automated warehouses, like Matt was talking about, is really becoming a thing. Preferred Freezer out in Washington built what is a 1.5 or 2 million square foot distribution center freeze for DC that they operate with 15 people a shift. It's pretty remarkable what I see happening in your industry, Matt. When we were coming on today, you were saying that you were doing some media interviews and I'm going to guess that it's related to what's involved in shipping the vaccine since we are about to roll this out. My understanding is that your members aren't directly involved in the rollout, but from your conversation with industry professionals or regulators, what role is the cold chain going to play in the rollout? Can you explain to our listeners what they need to know about this?
Matt: Yes, sure. We've actually been engaged in conversations with the Trump administration and Operation Warp Speed for a couple of months now. Really, I'm very impressed with everything they've done to get this going in the way they have and all the voices that they brought to the table to provide them with insight and expertise. Ultimately, our position has been, and you're absolutely right, most of our members are not dealing in pharmaceuticals, so they're not really going to have a role here. Our stance has always been, look, we are ready, willing, and able to assist the efforts whenever we are called upon.
We're on the sidelines of it, using the football analogy, we're on the sidelines and as soon as the coach gives us a call, we're going to go run the next play. Our members are ready to do that. What I'll say is they have really-- this is a more bespoke approach to what I would say a supply chain. A lot of what has been done over the course of the last six to eight weeks even to make this a reality was something that was developed by Operation Warp Speed and the partners. They're really controlling the distribution network. They're creating the "boxes ultimately" that are going to need to be utilized to ship some of these ultra-cold vaccines.
Certainly, there's going to be some of the other vaccines that don't require such strenuous demands in order to get them from point A to point B. Based on everything we're seeing, and I can certainly say myself, I'm very impressed with what I've seen and what I've heard and looking forward to seeing how they roll this all out.
Abe: Matt, last question. Maybe some of your board members are listening to this so you're going to give them some insight here. What's on the horizon for the industry? What's on the horizon for cold chain?
Matt: I think more than anything else, if you go back to February or March of this year while we were very important, not a whole lot of folks knew who we were and the spotlight has officially been shined upon the industry. Everybody's very acutely aware of the cold chain, first, with the food side of things, people questioning what our role was and ensuring that they got the food that they were looking for. Now, of course, on the vaccine side. I think you're going to see, A, because of that, that means that more and more folks are looking at it. I think you're going to continue to see more investment in the industry.
I think that you're going to see new business development opportunities. A lot of this is stuff that was already in place. Bob had mentioned upfront maybe there were some additional investments in the industry for a number of different reasons and certainly, e-commerce may be one of them. Also, just looking at the number of people in the world continues to increase, which means the demand for food and products, et cetera, continues to increase. We've got to serve that demand. There's definitely going to be, I'd say, not only increased investment in the existing facilities but probably additional facilities being developed.
A number of my members are currently in the process of developing new facilities not only in the US but across the world. I think you're going to see more and more of that. What I'll say is that we really, really are excited about the opportunity we have to continue to educate folks across the world about our role, the importance we play, and the fact that we are critical infrastructure and our employees are essential to everything that we need to do to ensure that everybody has access to the highest quality food day in and day out across the world.
Abe: Really exceptional and interesting and dynamic field right now, Matt. That is all the time that we have today. A special thanks to our guest. Matt, thank you so much for sharing your insight and some of your guidance, and some of the activities that GCCA is undertaking. We hope you'll be back for our next episode for The Rebound. Until then, I'm Abe Eshkenazi.
Bob: I'm Bob Trebilcock.
Abe: Stay safe and healthy, everyone.
Bob: The Rebound is a joint production of the Association for Supply Chain Management and Supply Chain Management Review. For more information, be sure to visit ASCM.org and scmr.com. We hope you'll join us again.
