Gearing up for the Cold Supply Chain

The cold supply chain is a multi-billion dollar business with more companies in Asia now positioning themselves to be part of the industry. The growth of retail sector throughout the region has driven the demand for cold storage facilities, and 3rd Party Logistics (3PL) companies focusing on cold storage and distribution.

For the Asia Pacific region, this industry is still in its infancy, although one can see changes quickly being implemented – traditional “wet markets” being replaced by new super- and hyper-markets; life styles and eating habits changing; and as Asian economies grow more affluent, retail spendings set record highs. However, the cold supply chain industry falls behind other industries when it comes to the provision of modern warehouse systems and logistics.

Cold-storage

For a start, the investment cost to build and run a cold-store can be up to 10 times higher than the cost of running an ambient temperature warehouse. Since variables such as higher operating costs are inevitable, the common approach is to try to reduce the initial set-up outlay. Further, space optimization and higher productivity due to using modern storage systems will pay for themselves with lower running costs and increase profit margins.

Cold-stores in the retail trade and food processing industries carry a wide variety of products that are time sensitive with limited shelf life. Thus, stock rotation is a fundamental requirement in the industry. With the high costs of building and running a cold store, it is essential that storage solutions offer maximum volumetric utilization.

Therefore, instead of conventional storage systems, use the electrical mobile racking system that provides operatives 75 to 80 percent storage capacity with 100 percent selectivity. This allows any pallet to be removed or cartons to be case picked on demand.

Once considered too expensive, mobile bases can double the storage capacity of the cold-store, while providing all the facilities of selective racking.

As illustrated in the Cost Justification Table 1, considering the total investment cost of land building with the cold store iinfrastructure, against potential storage capacity of alternative systems, mobile racking achieves the highest number of pallet slots and at the lowest investment cost per pallet position.

Going green

The secret is to inspire the concept when planning is still at the green-field stage. One can then tailor design the cold rooms to the exact size, planning sufficient aisles to meet operational requirements. Cost control and more precise budget planning can then take place.

Once the storage capacity is increased, the electrical mobile racking systems would have contributed to a more environmentally friendly plant. This is because the electrical condensers would require a comparative lower demand on electricity to refrigerate per pallet location, and hence release lesser pollutants into the atmosphere while reducing operating costs.

Mobile racking systems are not the latest innovation. They were first marketed over 20 years ago. For example, a new generation of SSI Schaefer’s electrical mobile racking system uses modern technology and comes equipped with safety features that meet European Federation of Material Handling (FEM) and “Euro Norm” (EN) specifications. The systems are standard selective racks mounted on electrical mobile bases that run on tracks laid into the floor slab. The rack aisle can be closed, leaving one aisle per bank of up to six or seven double entry racks for access, thus doubling storage capacity. The racks can then be moved using wireless radio frequencies with the user remote mounted on the forklift truck or handheld.

To further enhance efficiency by increasing the operational cycles of pallet movements per hour, in- and out-bound conveyors with high-speed doors can transport pallets in and out of the cold-store.

Industry operators appreciating additional storage capacity, which can be achieved together with real cost savings, are now retro fitting mobile bases into their existing cold stores. By hacking some 30 to 35mm into the floor surface, low profile rails can be mounted and leveled. High-density grout can be applied below the rail and an additional floor screed poured to bring the floor level flush to the rail.

A more recent example is the retrofitting project for Seven Seas Shipchandlers situated in Dubai Investment Park. It had three existing chambers with selective racking retro fitted with the SSI Schaefer electrical mobile system, which doubled their original storage capacity.

Automated solutions

With land prices rising in urban areas close to city centers and demand rising for cold store facilities, it is a growing trend for larger operators to seek fully automated solutions up to 40 meters high. Survival within the cold stores competitive market is dependant on the ability to modernize and extend existing storage systems.

Case Study 1: Beijing Lurou Berry juice

Beijing Lurou Berry Juice Company is the latest investment by Nordfrucht AG Switzerland, a subsidiary of Bayernwald GmbH from Germany. The company was established in the Yanqi Development zone in December 2004, occupying a land area of 30.1 hectares.

The company produces Individually Quick Frozen (IQF) juice concentrate from strawberries, raspberries, blackberries and boysenberries, and exports its products to Europe, America and Southeast Asia. The total investment of 20 million euros ($31.49 million) was split into three phases. The first phase went into the building of the low temperature warehouse; second was used to establish the production plant, and the last phase of the investment went into setting up the juice-bottling factory. Expected annual production is about 500 tons of juice, valued at about RMB 5 billion ($0.23 billion).

SSI Schaefer’s mobile racking system was installed in the cold storage warehouse, for storing raw materials and finished products, at -20 deg C. A total of 6,700 euro pallet locations (European size pallets) in 25,025 m3 space were designed, in order to maximize space. The mobile racking system rails were built on timber-blocks, while the control panels were placed outside the cold room, with carefully insulated cables. Installation work was completed in less than three months.

Case Study 2: Integrated Cold Chain Logistics Sdn Bhd (ICCL)

Integrated Cold Chain Logistic (ICCL) is a based in Bukit Minyak, Penang, Malaysia. Having commenced operations in October 2006, the company provides temperature-controlled storage and logistics services to processors, distributors, food service providers and retailers across Malaysia.

ICCL is a total logistics provider offering full supply chain management services. The company operates centralized refrigerated warehouse with a storage capacity of 2200 m3/mt at -25 deg C. SSI Schaefer provided the electrical mobile racking system that maximizes volume capacity and product selectivity.

ICCL intends to continue expanding through growth of its existing business and strategically improve its supply chain by further strengthening infrastructure and information technology. It has more than 8,000 square feet of area for future expansion.