Cold Link Africa March / April 2021 | Page 31

INCORPORATING COLD CHAIN

FEATURE

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‘ futuristic like ’, the combination of AI and ML will change many sectors in the future – and this is already here now in many aspects as a multi approach to management means that risks can be navigated using the past , present , and future . Past meaning evaluation , present indicating real time decision making and future that by recognising patterns partnered with historical data will automatically predict the likelihood of an incident per facility , plantroom , piece of equipment and even a person . This will allow a new management protocol to be applied accordingly and how circumstances could be dealt with .

The combination of AI and ML going forward further holds the potential for systems of the future to suggest to managers or business owner ’ s the appropriate actions and measures to generate better operational efficiencies . With better pro-active systems and technology , a lot of third-party insurance claims would be eliminated because documented evidence can substantiate conditions etc . The cost benefit of this alone on the industry is significant and costs related to risks can in turn be reduced ( under certain conditions ).

Training is another potential avenue derived of technology . An example would be the AI and ML providing fleet drivers real time observations and guidance while on the job , thus uplifting the skill of the individual .

Automatic re-routing in cases of traffic and weather conditions may also be seen very near in the future or avoiding accident incidents causing costly delays . Optimised routing will add value back to the customer and the entire supply chain in fact .

From an alternate perspective , the viability of the insurance sector is wholly based on the ability to underwrite profitably . In order to tackle all of the existing and new challenges around risk , the use of data will therefore become more and more influential over time – affecting how policies and best practices will be identified and handled in future .

Several industry providers continue to work closely with insurance companies in terms of data transfer . Although this function is primarily intended to better the industry , each insurer has a different behavioural model , and uses this data to calculate the relevant risk factors . Because data can be generated into various reports , it has also become common that quarterly reviews will happen to evaluate incidents and the condition of plants or fleets at customers .

The power of monitoring and tracking directly related to the cold chain have led global logistics giants to generate significant data volumes from as far back as ten years ago . Climate impacts have a significant effect on the global cold chain in terms of ocean patterns and weather conditions . Scientists will in future be able to gain a better understanding of what is happening “ on the ground ”. This could be in the region of around 10 000 inputs every day that can be fed into a global service to avoid such risks to supply chains generally . Also , taking the changes that have occurred in the world over the last decade into account , insurance providers have been forced to alter business models to include the impacts of extreme weather-related risks and climate change that affects all classes of insurance .

With climate change playing an increasingly prominent role in weatherrelated damages in South Africa ( and globally ), it is crucial that the insurance industry becomes knowledgeable of developments in the climate and weather factors that play an active role in mitigating the risk it poses to the quantum and severity of short-term insurance claims in the region .

Further , insurance companies , who have a great potential to influence outcomes , may also find it in the insurance industry ’ s best interests to promote and drive a green agenda that seeks to support their clients in transitioning to more sustainable , environmentally aware business models , for now and future generations .

Technology-use and data sets will be aiming to predict and mitigate any types of catastrophic losses in vulnerable areas by estimating frequency and severity before they even occur . This will aid insurers to prepare in terms of capital reserves , assessment arrangements , expertise and staff required to handle or manage claims .

The future for both technology devices and insurance will also involve creating a cost-effective environment where additional costs do not have to be passed onto the consumer – who is already under pressure . What makes Africa unique ( not just South Africa ) in terms of technology related to risk management , is that this region is not orientated around large upfront capital investment , and this then allows opportunities for service providers to also generate rental models for all monitoring device types – tying into the global phenomenon of ‘ product as a service ’.

This holds a lot of benefits for both businesses and insurance providers – businesses have more affordable operational costs and insurance companies have clients more likely to implement technology to manage their risks and ensure correct and adequate monitoring of the cold chain . This model could also offer global services where African companies can participate anywhere in the world .

USE OF QUALITY PRODUCTS AND SERVICE PROVIDERS What continued to come up throughout this series is the use of service and product suppliers that have not only good products but understand the dynamics of the industry very well – as each industry has its own nuances of course . This leads to believe that there is in fact an underlying challenge when it comes to sector specific dynamics .

South Africa , that has for example more telematics devices installed than what is found in Europe having such a large road transport sector for one ( most recent estimate is in excess of two million delivery vehicles ), makes the local expertise and data collection some of the best in the world . South Africa also ranks very highly in recovery of vehicles and stock related to crime syndicates making an additional case for world-classed expertise on a day-to-day operations point of view .

In South Africa , the cold chain has seen extensive growth over recent years and reports further indicate that growth will continue with double digit figures for the next five years – this opens up a significant local value for products and services and with that the opportunity to make use of quality providers . No one wants to see an industry under pressure owing to a lack of long-term vision or where unsuitable technology has to be replaced within a mere few years of supply . This too has direct implications towards insurances .

The biggest risk moving forward is said to be the risk that exists by not implementing the use of technology and then keeping up to par with global trends . It is a welldocumented fact that once a business gets behind , they find it difficult to impossible to gain that ground back – not to mention the potential loss of market share to competitors who do . This is particularly important as trade and services today in the cold chain really need to be aligned to what is happening around the rest of the world as inter-continental trade will continue to grow within the perishable goods space .

There are of course business partners that would fit any particular model - be it that you prefer the personal attention of a smaller business or the research and development capacity of larger companies sticking to the forefront of trends . The use of service providers is also very dependent on the individual business model – should a company want to use a telematics device or install monitoring systems for the actual benefit of position in the market and the generation of data is naturally very different from purely executing this based on “ insurance requirements ” where it does not really matter if you use a quality product or the cheapest service as a tick box exercise .

The depth and breadth of service required must be directly linked to the expertise of the service provider , their reputation , and their knowledge of various laws or legislation related to maintaining the cold chain . There is today a lot more to it than just having a vehicle tracked on a map

Two-way communications allows drivers to report to control rooms from the ground and the latest technology enables re-routing to ensure delivery times are subject to as little delays as possible . or making sure that temperature variations are within the required range . Technology not only allows a level of comfort through peace of mind around a multi-million-rand investments , but you also have the ability to know if something is going wrong and options on a clear action plan to remedy any challenges thus making sure the consumer gets a product at the right time , at the right temperature and at the right quality .

THE COLD CHAIN IN FOODSTUFFS VS PHARMA : What are the commonalities and differences between the food and the pharma cold chain ? Although both product types are sensitive to temperature , there are significant differences :

Food products are often ‘ open ’ and exposed to bacteria , chemicals , and humidity . They are therefore sensitive to various environmental parameters . Shelflife of food products vary widely from a few days to many years depending on the product and the temperature range ( frozen , fresh , or controlled ). Therefore , the lengths and complexity of the supply chain has a great variance . Most food products are in fact much more sensitive to temperature than pharmaceuticals and must therefore have shorter supply chains . For example , freshly cut roses are produced in India and must reach the consumer in Europe within seven days before they fade and lose their commercial value . They are highly sensitive to temperature , start fading fast at temperature above 10 ° C and cannot be frozen at all .

Pharmaceutical products are “ packaged ” ( at least as commercial product ) and are therefore protected from bacteria , chemicals , and humidity . Most commercial pharmaceutical products have shelf-lives of 18 – 36 months and they are often less sensitive to temperature compared to food products . The big challenge with most pharmaceutical product is that the quality and level of degradation is not visible to the patient : you cannot see or smell if a vaccine has been frozen and has lost its efficacy ( or might even have become harmful ).