Whatever industry you are in, modern business requires strong justification for any investments in solutions or technologies that enhance the main business. Often the question is about ‘return on investment’, or ROI. Typical questions asked by senior management are, ‘What benefit would we get in monetary value from this technology?’ and if they are convinced of the benefit, then ‘How much does it cost?’
So is there a case for investing in real-time temperature monitoring and analytics? The answer is almost certainly yes, and we’ll explain why. We’ll also explain why the cost becomes insignificant compared to the losses that might be incurred from not doing it.
The business case
Containers regularly ship products that are temperature sensitive. These products can be anything – it could be food, medicines, vaccines, active pharmaceutical ingredients, retail products or even high value products like semiconductors. There is also a recent report about the global healthcare logistics market, which talks about increasing trends in clinical trials outsourcing which adds additional steps in the overall supply chain for shipping materials like drugs, blood samples and tissue samples between different countries, as the contract research organization and the sponsor are often in different regions.
The value of the products in these containers could range from a few thousand dollars to 10s of millions of dollars. In one example we have seen, the value of products in one container was just under US$10m. In this latter example, if the shipment is not properly tracked or monitored, and the temperature deviates for extended periods, the whole shipment could be written off. Obviously they won’t let this happen, but there is a risk that temperature or humidity is not monitored for a short period of time, and the product may not be useable – depending on the customer specifications or the regulatory requirements.
In the case of foods, as is seen in some countries, the wastage is quite high. In India for example, one recent report on the cold chain industry in that country highlights how 30-40 percent of horticultural produce is wasted annually in India. A large proportion of this wastage could be avoided with the appropriate low cost monitoring and business analytics and intelligence systems.
Often, the cost of implementing a monitoring and analytics solution for the containers or the cold chain is a tiny fraction of the actual value of the products in the container. Typically you might install wireless sensors to measure temperature, relative humidity, CO2, power consumption or even door open/closed sensors. This is the easy part – the hardware is a one-off cost and almost a commodity. In fact Dyzle’s solutions actually integrate any hardware from any vendor, including Dyzle’s, making it what is called an ‘open platform’ solution.
The really significant part of the solution is in the software to monitor the temperature and the business intelligence and analytics. The latter is important as it’s not just about gathering data (which there is a lot of nowadays), but also to understand what the information means very simply – for example a chief financial officer of a company might just want to know from their logistics manager or quality manager only the value of the goods that have been wasted as a result of a temperature digression beyond what’s expected by their customer.
The monitoring solution needs to be able to report in real-time at any point when there has been a deviation from the accepted range of temperature or other variable – which it can do by email, phone or text message alert. This can be simple cloud (internet) based software which can be used on a subscription basis to provide business process monitoring and analytics (such as that provided by Dyzle).
This type of web-based solution is typically very low cost compared to implementing your own software solutions, because like many software products today, it is available as ‘software-as-a-service’ or ‘platform-as-a-service’. This often provides only the solution you need, where you need it, and without the significant investment required in software that might have been expected in the past.
The combination of cloud-based subscription service, together with relevant analytics (dashboards) make a very good business case for implementing real time monitoring and analytics, without huge investment, and ultimately providing a good return on investment by providing the ability to significantly reduce wastage.