Proper operation of the cold chain—coolers, refrigerators, and freezers—is critical to profitability in the food industry. According to the U.S. Department of Energy, cold chain systems account for approximately half of a retail store's energy consumption.
Managing these costs can be tricky, as they depend on many variables. When store traffic ticks up, for example, energy consumption will rise as more customers open the cold cases. Changes in weather can cause the thermal load to rise and fall.
Malfunctioning or mis-adjusted equipment is perhaps the largest concern. Inefficient equipment can drive energy bills higher regardless of conditions, seriously cutting into margins.
And when systems fail, the resulting spoilage can significantly impact the customer experience and the brand image. There are also environmental factors to consider. In American retail, wastage of organic goods adds up to 43 billion pounds each year. This ends up rotting in landfills, as part of the single largest component of U.S. municipal solid waste. Plus, food waste is the world's third-largest emitter of greenhouse gases into the atmosphere.
In short, managing and maintaining the cold chain is central to customer satisfaction, brand perception, and profitability.
Strengthening Weak Links in the Cold Chain
New Internet of Things (IoT) technologies can address these challenges – without needing to replace existing cold case equipment. By deploying digital intelligence within the store and across the food chain, retailers can streamline and automate operations, reduce energy demand, and optimize temperatures for perishable goods.
This new approach is exemplified by the IMS Evolve IoT Solution (Figure 1), which involves the following:
- Instrumenting the cold storage, HVAC systems, and other existing environmental sensors to capture operational conditions.
- Connecting cold chain equipment and other instrumented systems to a local IoT gateway.
- Deploying operational rules and processes, along with appropriate analytics capabilities on the IoT gateway.
- Integrating cold chain operational data with external and internal enterprise data, such as energy demand, weather, environmental services, work order systems, and more.
- Analyzing and distributing the cross-system data to enable new insights, informed decision-making and improved operations.
For this new approach to succeed, it must meet the needs of many stakeholders. In any given retail organization, multiple departments are responsible for customer experience, cold chain or otherwise. This includes equipment maintenance, environmental services, energy management, business accounting, information technology (IT), and more.
Often these teams work in a siloed manner, where business objectives are not aligned and data is not shared, reducing operational efficiency. This can result in inadequate work order tracking, poor reporting, and lack of service trends, adding up to more system failures and rising costs. Digital projects or IoT pilots that are undertaken tend to result in failure as they focus only on one area of the business instead of bringing them together.
Thus, cold chain optimization is about more than applying new technology—the process must transform the organization. “That process brings together departments to realize workflow improvements that, together with trend and predictive analytics, create insight for business transformation,” commented Jasmine Sampson, Marketing & Communications Manager at IMS Evolve.
In the case of IMS Evolve, solution architects work with store department personnel to integrate their various needs. They do not limit involvement with just a single team, such as energy, or maintenance and engineering; they work across the store's entire operations to create a holistic vision.
The solution acquires system data from existing assets, such as refrigerated cases, HVAC, and lighting, and integrates it with multiple data sources, such as CRM, ERP systems, and environmental data. Retailers have clear visibility across operations—both in-house and contracted. This means improved customer experiences, protecting the brand and enhancing store profitability (Figure 2).
“When we interconnect IT and OT,” said Sampson, “and contextualize internal and external data, our software delivers a level of insight that identifies new opportunities to save money, time, and resources, and enable new revenue models that can be reinvested into the business.”
Creating a Holistic Vision with the IoT
Also critical to success: analyzing the right data at the right time, in the right place. According to IDC, by 2019, 45 percent of IoT-created data will be stored, processed, analyzed, and acted on near or at the edge—and the cold chain is no exception.
To process that much information outside the data center requires edge-based solutions that can:
- Provide flexible connectivity, robust stability, and security
- Acquire data from new and existing systems
- Analyze and act on that data locally to minimize response times
- Create a foundation for future innovations
All of this must be done in a cost-effective, rapidly scalable manner to meet the demands of chain retailers—where margins are tight and costs can be multiplied across many locations.
That's why IMS Evolve partnered with Intel® and Dell. These technology leaders have a long history of providing scalable solutions for retailers. Their industry-leading, versatile technologies have enabled IMS to deliver their proven, cost-effective, edge-based solutions globally.
The end result is a solution with impressive ROI. “Our solution consistently delivers ROI within the first year,” noted Sampson.
“One of our major European customers achieved a 49 percent reduction in refrigerated stock loss,” explained Sampson. “The customer saved $7 million (U.S.) annually in energy costs across one application.”
The customer gained insight into system alarms and repair visits, resulting in operational improvements that reduced maintenance calls by 40 percent, and returning those repair costs to the bottom line.
For a large U.S. retailer, the solution reduced its alarms by 92 percent, allowing personnel to focus on accurate critical warnings that could translate to measurable benefits.
“Food retailers understand they have customer, fiscal, and social responsibilities that are impacted by store operations and the cold chain. We help them refine how they can optimize those responsibilities with enterprise IoT solutions,” concluded Sampson.