Leveraging IoT solutions for last mile cold chain visibility: Balancing technology and costs

Cold chain management   29 Aug 2018

Cloud technology, IoT, and smart analytics are key to addressing challenges and improving efficiencies in the cold chain.

The last-mile of the supply chain is often overlooked in those discussions, but has become increasingly critical as regulations require stricter visibility and traceability of food and pharmaceutical products. Despite these efforts, the last mile—the transport to the final point where the products are intended, whether that’s a restaurant, grocery store, pharmacy, hospital, or health clinic—remains one of the most fragile and prone to cold chain breakdowns.

According to CB Insights, more grocers are investing in last-mile logistics efficiency to optimize delivery services to their customers. In the last mile, product integrity must be maintained for safety and regulatory reasons (companies must comply with a variety of regulations—GDP, GMP, DSCSA, 21 CFR Part 11, FDA, FSMA, and so on), but managing and controlling delivery can be a challenge. Vaccines and other pharmaceutical products need to be kept in temperature controlled conditions (2-8°C or 15-25°C) from the moment they leave the manufacturing site until they get into the patient. Frozen and fresh food products have strict temperature ranges, beyond which food becomes unsafe to consume, the risk of foodborne illness increases, and food quality and freshness is compromised. 

The challenges faced in last-mile distribution depend on a number of factors, including the type of product, geographical nature and infrastructure—particularly in rural and developing areas—country and commercial models, and regulations. 

Traditionally, the cost of technology to monitor temperature and product movement may not have been justified, given that the value of the products being shipped to the final destinations may be substantially lower than the value that was initially shipped in bulk from the original starting point. In contrast, at the beginning of the supply chain, when a full truck load might be worth millions of dollars, a smaller shipment at the end of the cold chain might be worth a fraction of the cost.

Today, it’s possible to gain cost-effective, real-time visibility over the last-mile, for open-loop and closed-loop shipments.

Technology solutions and services designed for the last-mile

How does IoT technology address the challenges throughout the cold chain? At the starting point, there are less likely to be too many changes. However, in the last-mile, there have been newer solutions developed with limited functionality to meet the cost challenges. Most current IoT solutions do not provide real-time temperature or location visibility, and are not reusable.  

Open-loop versus closed-loop supply chain

Whether products are shipped in an open-loop versus a closed-loop has traditionally factored into which technology is used. This may mean that a business juggles multiple temperature monitoring technology, preventing a single source of truth over their entire cold chain.

In an open loop system, the carrier delivering products to the final destination may not return to the original point of a journey. For this reason, companies have opted for disposable temperature sensors, if they use any technology at all. These increase risk and provide limited data.

In a closed loop last-mile delivery, the carrier returns to the original destination. This opens up the possibility of deploying a reusable temperature monitoring solution. However, the cost of purchasing and maintaining hardware has historically been prohibitive.

Next generation cold chain visibility

While there are temperature monitoring and traceability technologies available on the market, most all are fully validated and compliant solutions, nor do they provide sufficient protection over the last-mile to mitigate against the risk points.

Our end-to-end solution supports real-time visibility through the last mile, both for open-loop and closed-loop delivery systems. In an open-loop system, our wireless IoT data technology can be placed inside a cooler or place on a palette. Upon reaching its destination, our reverse logistics team manages the collection of the devices and returns them to a fulfillment center to be used again.   

In a closed-loop system, our IoT devices can be attached to the inside of a truck or trailer, or placed on the granular level inside boxes or coolers, or on the palette, and, at the end of the shipment, are returned to a starting point for reuse.

With either system, environmental conditions are measured in real-time and data is automatically sent to the cloud. Analytics provide a complete view of delivery routes at any point of time. Shipment analytics are available on demand through a web-enabled dashboard, which displays and sends real-time notifications if environmental deviations start to occur. GPS provides geo-locating traceability, and can reveal key behavior and risk points to factor into route planning. Our monitoring and response team is available 24/7, 365 days per year to facilitate immediate corrective action.

Our solutions and services are delivered on a subscription-basis, and the costs of running open-loop or closed-loop programs are typically substantially less than the CAPEX costs associated with purchasing single-use tools.  

Last-mile distribution is often the most complex part of the supply chain. Since products have already travelled for thousands of miles, the risk factors are significant. If products do not make it in time and under the right conditions, this can have a serious effect on consumers and patients. Since compliance and costs are both at stake, businesses have an added incentive to identify and mitigate risks. This includes identifying where infrastructure is lacking and employing the right technology and services to ensure an unbroken temperature-controlled cold chain.

Read the Distica case study on last-mile delivery of pharmaceutical products.

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Contact us for a demo or to get started with a pilot.

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