The release of Coronavirus vaccines has shone a spotlight on the importance of cold supply chains; however, I want to discuss what happens to supply chains when the weather turns cold. When most of us think about the onset of winter, we envision shoveling sidewalks and driving on slippery roads. Supply chain managers, however, must think about much more than clearing away snow and poor road conditions. John Luciani, chief operating officer of LTL solutions at A. Duie Pyle, explains, “With the first winter weather of the coronavirus pandemic bearing down across the U.S., shippers are looking to ensure their supply chains aren’t further disrupted by freezing temperatures. Shippers may face challenges protecting vulnerable products from freezing this winter, with predictions calling for a cold, snowy winter in the northern half of the country. As the temperature drops, shippers must take steps to ‘winterize’ their supply chains to protect shipments from damage.”[1]
Journalist JP Morris adds, “Long-haul trucking and last-mile delivery can face road closures and dangerous conditions from blowing snow and high winds. And even airports struggle to operate smoothly despite de-icing systems and advanced forecasting technology.”[2] Unlike so-called “black swan” events, we know winter will come and we generally understand how it will affect supply chains. Jeff Newman, Vice President of Global Supply Chain Sales at CalAmp, writes, “Every winter companies look for new ways to avoid the potential supply chain risks that lie ahead. While there are unexpected challenges like geopolitical issues, labor disputes and even terrorism, there are seemingly consistent challenges that can be prepared for such as weather and communications.”[3]
Dealing with extreme weather
Like other seasons, winter is being affected by climate change. Morris reminds us there is a difference between weather and climate change. He explains, “The distinction is that weather consists of the day-to-day events, like high and low temperatures, rain or drought that can fluctuate wildly. And climate is the long-term weather pattern for a particular region. When there’s climate change, a long-term pattern is altered and can affect the daily weather in different areas. So global warming can heat large areas of Earth, causing wild swings in hot as well as cold temperatures in areas that once had a more consistent climate.” Supply chain risk managers must deal with both day-to-day weather as well as prepare for contingencies associated with climate change. In this article, I want to concentrate on weather rather than climate change.
PwC analysts Brian Dunch (@Brian_Dunch) and David Sapin (@drsapin) note, “The number of [extreme weather] events continues to climb every year, begging the question: Do you know your supply chain well enough to be prepared for the potential disruption caused by extreme weather?”[4] Although tornadoes and hurricanes may be the first extreme weather events that come to mind, extreme winter storms can also cause havoc. Dunch and Sapin note, “Any disruption can result in organizations and consumers worldwide feeling the impact via loss of suppliers, delayed or destroyed goods, new product releases delays, and ultimately, customer dissatisfaction and brand damage. … A company’s ability to adapt to potential risks is a reflection of its supply chain management sophistication. A mature supply chain operation will take a data driven approach to create visibility, truly understanding their vulnerabilities and creating capabilities and contingencies to be more resilient.”
Bracing for winter
Newman observes, “To stay competitive and deliver top-notch service, companies must invest in and have supply chain technology that goes beyond tracking and monitoring to provide visibility that ensures products are secure, intact, on time, and safely handled across land, sea and air. During winter months, a myriad of factors can contribute to delivery delays, asset loss or misplacement, but most are completely avoidable.” Luciani agrees that proper preparation and supply chain visibility can prevent or mitigate many of the challenges winter presents. He explains, “Winterizing operations is a full-spectrum effort: protecting employees with the right equipment and training, ensuring preventative maintenance is current on all power and trailing equipment, preparing warehouses for freezing temperatures, and offering services that protect temperature-sensitive shipments help form a solid groundwork for success.”[5] Below are few ways supply chain managers can brace for winter.
Implement freeze protection programs. Most of us have sat quietly on airport tarmacs waiting for the aircraft we are in to be de-iced prior to take-off. It’s a smart safety measure that airlines take to ensure our safety. Ground carriers need to take similar measures. Luciani notes, “Not all freeze protection programs are created equal. A carrier with true protection from freeze capabilities invests in appropriate infrastructure, uses technology and focuses on training and accountability. … A carrier that values freeze protection makes appropriate investments in infrastructure and equipment to include heated trailers, docks, service centers and warehouse facilities, as well as specialized dock training and temperature-sensitive load planning software to protect every shipment. This infrastructure eliminates the need for a transportation provider to embargo freight or refuse pickup during extreme conditions.”
Invest in the right technologies. Some cargos are temperature sensitive and must avoid hot temperatures in the summer and freezing temperatures in the winter. Newman writes, “The latest cold chain technologies monitor temperature, humidity, light, shock and movement, as well as the duration of a disruption that can increase risk of theft. During winter travel, mother nature can have her own agenda and interfere with the delivery of a cold chain shipment and without proper insights and data, millions of dollars could be at stake. Reliable technology in remote places could be the difference between a usable shipment and an unsafe shipment with potentially significant loss in revenue.” Although Newman talks about “proper insights and data,” the order needs to be reversed — data must be collected before proper insights can be provided. Given the right data, cognitive technologies can provide actionable insights throughout the year.
Supply chain visibility. Supply chain visibility is a continuing challenge for supply chain managers. Knowing where a truck might be stuck during a winter storm and how the delay will affect delivery are important pieces of data. Newman insists smart pallets can help. He explains, “In this age of one-day delivery, the supply chain performance is under the microscope. Knowing where your cargo is and when it will arrive is crucial as more suppliers are experimenting with and pursuing faster delivery schedules. Much of the logistics industry has focused on RFID and barcodes for pallet tracking, but Bluetooth-enabled tags monitor for compliance, handling, and environmental changes, and can more effectively inform decisions based on real-time supply chain insights than the former approach.” Luciani adds, “A carrier that uses technology for optimized routing and shipment visibility from the time of pickup through delivery allows shippers to track shipments from origin to destination, giving them peace of mind that their shipment is on track and moving smoothly.”
Personnel training. Most business leaders understand the importance of people, processes, and technology. Up to this point, the discussion has mostly focused on processes and technology. Luciani reminds us that people also play a vital role in ensuring the supply chain is winterized properly. He writes, “The most effective carriers embed training into every aspect of their operations, including training customer service representatives to provide accurate and timely information, and drivers and dockworkers on top-notch safety practices for monitoring their equipment and handling freezable products.”
Concluding thoughts
The late comedian Carl Reiner once stated, “A lot of people like snow. I find it to be an unnecessary freezing of water.” That sentiment is probably shared by a majority of supply chain managers. Mathew Elenjickal, Founder and Chief Executive Officer of FourKites, insists this winter will be “like no other.”[6] As a result, he writes, “Supply chain leaders will need to manage through a uniquely challenging time.” He notes that the pandemic has required organizations to strengthen their supply chains with good results. He concludes, “Thanks to better planning, investments in technology, process improvements and a spirit of optimism and community. I think this will see us through to next spring — and beyond.” Let’s pray he is correct.
Footnotes
[1] John Luciani, “To Winter-Proof Your Supply Chain, Consider These Three Factors,” SupplyChainBrain, 29 December 2020.
[2] JP Morris, “Cold Weather Offers Lessons on Supply Chain Risks and Climate Change,” Spend Matters, 30 January 2019.
[3] Jeff Newman, “How to Outsmart Winter Supply Chain Hurdles,” IoT Evolution, 20 February 2020.
[4] Brian Dunch and David Sapin, “Supply Chain Risk: How prepared is your supply chain for the inevitable disruption caused by extreme weather?” PwC Bits & Bytes, 2017.
[5] John Luciani, “Managing risk to survive the 2020 ‘polar coaster’,” FleetOwner, 7 January 2020.
[6] Mathew Elenjickal, “Winter Is Coming — Are Supply Chains Ready?” Forbes, 30 November 2020.
