When the U.S. Centers for Disease Control and Prevention took the unusual step of warning people not to eat romaine lettuce last November, it was a rare and dramatic measure for the agency to take. And one that impacted many food service industries across the country.
It happened because the CDC and the Food and Drug Administration knew they could not immediately pinpoint exactly where the lettuce had come from. An outbreak of the bacteria E. coli had been linked to romaine consumption, but neither the agencies nor the food industry companies had a clear view of the supply chain that would allow them to quickly pinpoint where the problem originated. The outbreak was finally resolved in early January.
It’s one of the problems that Deloitte hopes to eliminate with its Cold Chain solution leveraging SAP S/4HANA, SAP Fiori, and SAP Cloud Platform. The Deloitte solution uses Internet of Things (IoT) sensors and geo-location data at a truck or pallet level to help ensure that temperature remains within desired parameters. Data is translated to SAP Cloud Platform in real time and integrates with the core ERP systems of customers, particularly in the food or pharmaceutical industries where temperature control is imperative for many goods.
“Historically, by the time a company gets a shipment where there has been a temperature issue, they may have to throw away hundreds of thousands of dollars of inventory in the truck,” said Darwin Deano, SAP chief technology officer, Deloitte Consulting LLP. “Our solution allows companies to make informed decisions on recall or replacement of shipments based on current location to avoid customer relationship impacts due to spoilage.”
Reducing Waste, Improving Compliance
The global cold chain market is growing, almost 14 percent annually through next year when it’s expected to surpass $270 billion. Cold Chain, like many solutions developed by Deloitte, comes from seeing a need in the market, according to Vadhi Narasimhamurti, SAP Supply Chain leader, Deloitte Consulting LLP. “This was developed based off client data. Roughly 20 percent of food inventory is lost after production and before consumption due to temperature issues. Also, companies need to meet growing compliance standards for food and drug safety, such as the Food Safety Modernization Act,” he said.
Maintaining a stable temperature is imperative to maximize food quality and shelf life, statistics that Deloitte believes Cold Chain can improve. Leveraging intelligent enterprise machine learning qualities from SAP technologies, Deloitte’s Cold Chain can learn behavioral patterns over time to better predict temperature fluctuations that may need to be resolved.
“Maybe it’s a certain route trucks should avoid or the way something is packaged. The main benefit is that it allows customers to be proactive, not reactive, to an issue,” Amit Mittal, SAP Innovation Delivery leader, Deloitte Consulting LLP, said. For example, if inventory needs to stay below 60 degrees, Cold Chain can send an alert once the vehicle or storage facility hits 55 degrees, giving the customer time to take appropriate action.
Pinpointing the Problem, Identifying the Solution
It also allows customers to have complete visibility of every package in the supply chain. That means customers would have immediately been able to identify where the E. coli-tainted lettuce had originated.
“Instead of having to recall all the romaine in the United States, you could have limited it to a specific farm or crop. That traceability is important to identify where the product has been but also what may have happened from the distribution center to the table,” Gautam Mylavarapu, SAP Supply Chain Innovation leader, Deloitte Consulting LLP, said.
Likewise, pharmaceuticals requiring temperature control can benefit from Cold Chain. “Awareness of a problem allows a customer to act that much quicker. They can monitor in real time and take appropriate action right away,” Deano said. “That leads to safer sourcing of product, less waste, and lower overall costs.”
Beyond temperature, Deloitte uses the sensors and SAP Cloud Platform to track data on humidity, pressure, and other variables that could also impact the sensitivity and value of food and pharmaceuticals. “This kind of solution is critical to help reduce the risk of food poisoning or other health-related incidents to consumers. It also can have a dramatic positive impact on the companies that might hold liability for the inventory as well,” said Thorsten Leiduck, global vice president, SAP Cloud Platform Ecosystem. “Deloitte’s solution can help identify what the root of the problem is and help create a safer, more secure environment for everyone.”’
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