Why is the Cold Chain Logistics still stuck with old technology?

As my first column in Cold Link Africa, I thought it would be appropriate to start off by addressing this subject that is highly relevant as the sector is in a strong growth phase but to top that, a lot of storage stock systems have reached their end of life term and it’s time for system replacements and upgrades. There are certainly several reasons for the mindset of facility owners and managers in regard to ‘Evasion of Technology Adoption’, and If I had to talk honestly, the majority of businesses in the local environment have this view. I like to think about it that we don’t need to continue to ‘Trade like a Third World Country’ because we already have access to great advances made in Europe here and available now to all Facilities in Africa.

One of the major factors that we see in logistics and storage solution designs is the fact that decision makers are just not aware or familiar with what is actually available as a solution, and what is already adopted widespread in other countries around the world. They may have seen a Video or heard about the Technology, but have not actively embraced the thought of investigating the Technology and understanding how these advanced Systems in Cold Storage Technology will set them apart from their Competitors. In many cases, it is due to the fact that they may be very focused on the day to day, and no one has provided them with the understanding of how this will change their business short, medium and long term. Coupled to that lack of knowledge for a roll out of technology in this country is the disadvantage that there are very few companies that can design and deliver any specialised and integrated handling and storage systems. Limited experience or exposure to international trends and technology of course means an equal result in the solutions that engineers can provide - even if they can conceptualise a great idea – there are a lot of intricacies involved other than just the storage of goods. So, the typical situation for local projects is that because of these two factors there is a total disconnect between clients and service providers, and the proposal process is turned on its head. The various pitches from suppliers cater to their individual thoughts on a solution rather than the client specifying exactly what they want, and then each supplier proposing appropriate technology related to their ability what they can offer as their company scope and offering, omitting the true Client Centricity approach. If it is a Logistics Consultant, and not an Expert Storage System Engineering Firm, or Storage Solutions Engineering Expert, and the reality is that in many cases, the DCs all look like the same Cookie Press Solution of a Competitor they have done, which Add no Value to the Customer seeking advancement in Technology. In my follow up Columns and Contribution, I will explain this resistance to change by Logistics Consultants, Customers in a larger context to ensure the mould can be broken, and SA can gain greater efficiency in Warehouse and Cold Chain Storage Technology, and not play leapfrog to their Competitors. The major reason is that the Consultants in many cases play it “save”, and design what they themselves are familiar with due to them attempting and in some cases rightfully protecting their own Reputation, but regretfully and without a doubt, this means they are not giving the Customer and User the advantaged of Technological Advancements made in the Intralogistics Equipment Sector made daily, which they need to be more efficient, safer, faster, and have a better OPEX than any of their Competitors. When this happens, the inevitable is that the client doesn’t get what they

want - or indeed need as they are now informed about what they need - and automation and technology get a ‘bad name’ as we have seen, even within our borders as many white elephants are installed that the designer and supplier just supplied what they had, impressing Customers and End-Users with that what they have available, and at the time of the Roll Out, Customer’s true needs and true bottom-line savings are not understood and addressed.

I have visited thousands of installations where systems that were supposed to provide the Customer with the Leading Edge, became the Bleeding Edge, not because of the Technology that cannot achieve the Outcome, but just because the complete Holistic Process from Concept to Completion was not executed in the manner that it could and should have been.

When technology and automation numerous systems don’t work, or perform poorly because a holistic view was not considered, and progress can’t happen because of the obvious failures, it is obvious that and then because other Companies and End-Users that are indeed interested in technology; don’t have any suitable working sites that they can then refer to, and use as motivation for advancement of their own Businesses.

In such cases, you may then wonder why international Sites cannot be used as an example and replicated here locally. Well, in simple terms that comes down to the reality that conditions, regulations and standards, efficiency, productivity and most importantly cultural differences and values are evident. It is well documented that the South African workforce comparatively to its international counterparts is far less productive. This then means, for example, a system adopted from China or Eastern Block where the worker-picking is in excess of 2500 items an hour, would not work effectively locally with an average picking rate of perhaps 400 or 600 items an hour pick rate, for the same case.

On the converse, when a Customer, client or End-User is interested to embrace Semi-Automation and Full Warehouse Automation and loves the idea of going for a high spec system, another problem arises that we see, particularly when a supplier itself, even having the agency or a derivative of what the new Solution will entail, doesn’t have an explicit and definitive very good understanding of these systems they are intending to manufacture or promoting. The impact on a business is the result that there is an unintended effect on the facility that was too severe to handle while a comprehensive change management strategy should have been included to be implemented. Another outcome, as one example, is an unfortunate result of the general South African mannerism of always choosing the cheapest solution; while time and time again it has been proven that this strategy affects facility operational expenditure significantly long term. The decisionmaking process ends with the facility owner or management but is also influenced by other role players such as consultants or suppliers claiming to be experts, but the reality remains that if such contributors to decision making don't have international experience of the various systems and techniques available, they will only recommend what they know and are familiar with – even when better solutions exist. Logistics Consultants, for the lack of a better word, and in many cases Integrators, therefore show savings upfront, and Customers and Users are excited to see the lower CAPEX, but do not get the filtered OPEX Costs to the right EXCO that will sit up straight if they realised what this approach to finding the perfect balance of CAPEX vs. OPEX and the Company’s BottomLine would mean for them.

Today, and in the future, much more thought needs to go into the operational aspects than saving a few per cent on capital costs. Storage facilities of any nature would generally have a life expectancy of 20 to 30 years and operational effectiveness will, without a doubt, become a major element in the increasingly competitive environment and speed of throughput requirements - as we have already experienced industry changes like the growth of the e-commerce sector that can already deliver your preferred wines to your favourite fresh fruits.

From a holistic facility view one would need to consider control systems, warehouse management systems, component communications, types of equipment required such as bespoke storage systems, “intelligent” mobiles, “advanced new aged” shuttles, pallet and box conveyors, reach trucks and the range of material handling equipment, etc. All aspects working in unison, gains larger importance the greater the proportion of automation that is implemented at a facility that owners and managers need to be aware of. And of course, fixing an incorrectly designed or supplied system is also far more costly that the “savings up front” which seldom get acknowledged. In 22 Years I have yet to meet a Decision-maker to acknowledge that a System, Solution and/or Supplier was chosen incorrectly, as that will greatly affect their reputation and stature. The common statement of: “It was the right decision at the time”, has to be changed and for this, a Cultural Change has to take place within South Africa where Decision-makers are incentivised not to spend less, but improving a proven bottom-line to their Organisations. The Expert Intralogistical and Storage

Lifting Africa - Sep/Oct 2022 41

System Engineering Company must be the Role-player that gains buy-in from the Shareholders, Executive Teams, and all the Customer, Client and End-User. All of these circumstances, and many more actually, contribute to people becoming ‘afraid of automated systems because they have heard about all the problems or themselves been bitten before – perhaps many years prior when the particular automation or technology was in its infancy. In fact, in many cases, they also just stay with whom they have known and the resistance to change is evident in South Africa, contrary to the evolution in the Sector Globally. And, as we know full well, it takes a lot to change that mindset - especially when decision makers ‘never want to touch technology again’ because of perhaps an incident where an automated vehicle tipped over and caused damage, or their mobile racking solution didn’t take into account certain placing and picking parameters – all thoughts of times when they nearly had to close their businesses down or were in a worse position after tech upgrades. And yes, in truth, as new technology is developed the reality is that 10 or 15 years ago compared to what is available today, the technology of those years was indeed horrible and riddled with troubles.

Certain equipment for example had no acceleration and deceleration controls, they were prone to jerking motions that led to toppling, and so forth.

Today however there is a new era of technology and solutions that are reliable, efficient, and seamless to implement and managed remotely at low cost and high efficiency, providing unthinkable visibility into the system’s performance which was not possible 5-10 years ago, and, given the partnership of the correct experienced professionals -well proven installations around the world that can be looked at for relevant case studies across multiple industry sectors and handled goods similar to one’s specific operational requirements. This has to be high on the agenda of any Facility Owner and Operator. The application of better operations is a key element for long term sustainability and country trends – one of which locally is labour and this item’s relationship to operational costs on financials. While there may be resistance to higher capital costs, the continued risk associated with the uncertainty around labour – be this availability, productivity, attendance or even industrial action, all have a dramatic effect on a company’s capacity and output over the lifetime (where even part-automation has shown to be two and a half times more economical to run cheaper). For large companies, this equates to huge impacts and improvements on the bottom line, which in the end, is what drives Business Success and Sustainability.. Failure to adapt is actually impeding effectiveness, and in the current economic environment as well as what we can expect to see in the future, is a strategy that produces another stressor whereby the consumers have to be burdened by paying significantly higher costs for products than they need to. Profitability can also only be achieved by becoming more efficient as well as providing greater Customer Service. Satisfied Customers, which is complex to measure the true financial impact in SMEs, have been proven to create loyalty and that is only achieved by the Facility Owners, providing greater efficiencies. Efficiencies may be deemed to cost money, but in fact, strengthens the bottom-line. When it comes to the supply and demand equation in the food supply as an example, generally speaking, one can only buy for a certain price deemed right, and sell at a rate based on demand as the market will only pay up to a certain price point. Every chain would have more or less the same conditions to work with.

How companies then compete is based on that middle portion where logistics, storage and warehousing, distribution costs, marketing, and of course profit margins, amongst other inputs, need to be covered. Better operational efficiency is a direct benefit to a business’s bottom line – you don’t need to be a scientist or economist to work that out.

With the adoption of better technology, savings can be realised immediately, but more significantly the possibility arises to decrease facility footprints with increased speeds or increase speeds and capacity – all scenarios that add directly to revenue or savings respectively. It also enables far less human involvement. This is another particular challenge where the thought process usually reverts to job security, but again, as we have seen in countless examples from other countries – automation does not mean job losses – it means a shift in skills and increased opportunities for higher wages which then, in turn, means a country’s population gains better living conditions. Japan and India are very good examples of how adaptation to technology has increased the population’s living standards threefold already above our country’s over the same reporting period. Technology in logistics, product handling and storage related to facility operations has advanced so much that it can deliver much more when handled correctly and it just makes sense on many levels. Role players need to adapt their mindsets and adopt the right partners to implement the right systems to remain competitive, make money and be able to transfer savings to consumers.

By Fred Albrecht, Managing Director of Logistics Systems Engineering

sales@lsegroup.co.za, www.lsegroup.co.za

Giovenzana International T: +39 039 5951 1277 E: giovenzana@giovenzana.com W: www.giovenzana.com

HIAB SA (PTY) LTD C: +27 (0) 11 865 1425 E: sales@hiup.co.za

Condra Cranes T: +27 (0) 11 776 6000 E: sales@condra.co.za W: www.condra.co.za

LLSM Hydraulics & Pneumatics T: +27 (0) 15 250 0335 C: +27 (0) 81 206 5124 E: admin@llsmhydraulics.co.za

Fastlift Cranes & Services T: +27 (0) 21 140 1514 (CPT) T: +27 (0) 10 141 0237 (JHB) E: bradley@fastliftcranes.co.za W: www.fastliftcranes.com

ST Cranes T: +27 (0) 82 292 1148 E: ricky@itlgroup.co.za W: www.stcranehire.co.za

Liebherr Africa T: +27 (0) 11 365-2000 E: info.laf@liebherr.com W: www.liebherr.com

Bell Equipment Southern Africa T: +27 (0) 11 928 9846 E: susanmy@bell.co.za W: www.bellequipment.com

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Kemach Forklifts T: +27 (0) 11 826-6710 E: info@kemachjcb.co.za W: www.kemachjcb.co.za

Morris Material Handling SA T: +27 (0) 11 748-1000 F: +27 (0) 11 748-1093 E: sales@morris.co.za W: www.morris.co.za

Yale Lifting Solutions T: +27 (0) 11 794-2910 F: +27 (0) 11 794-3560 E: crm@yalelift.co.za W: www.yale.co.za Yale Lifting Solutions T: +27 (0) 11 794-2910 F: +27 (0) 11 794-3560 E: crm@yalelift.co.za W: www.yale.co.za

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Yale Lifting Solutions T: +27 (0) 11 794-2910 F: +27 (0) 11 794-3560 E: crm@yalelift.co.za W: www.yale.co.za

Levi’s Trio Engineering T: +27 (0) 11 907 9258 F: +27 (0) 86 742 9410 E: admin@levistrio.co.za W: www.levistrio.co.za Premier Load Testing & Services T: +27 (0) 14 596-5100 / 5026 C: +27 (0) 72 711-9510 E: savannahm@premierload.co.za W: www.premierload.co.za

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AJM Engineering T: +27 (0) 11 453-0728 E: info@ajmengineering.co.za W: www.ajmengineering.co.za Yale Lifting Solutions T: +27 (0) 11 794-2910 F: +27 (0) 11 794-3560 E: crm@yalelift.co.za W: www.yale.co.za

By Carpel SRL - Italy T: + 39 (0) 39 532-0952 F: + 39 (0) 39 532-0825 E: info@bycarpel.it W: www.bycarpel.it

Condra Cranes T: +27 (0) 11 776 6000 E: sales@condra.co.za W: www.condra.co.za

Econo Flex T: +27 (0) 16 933 5705 E: econoflex@econoflex.co.za

HP Cranes Consulting T: +27 (0) 11 740-9725/28 E: donavan@hpcranes.co.za W: www.hpcranes.co.za Polokeho Lifting & Testing Services T: +27 (0) 10 822 6611 E: eben@polokeholt.co.za W: www.polokeholt.co.za

Giovenzana International T: +39 039 5951 1277 E: giovenzana@giovenzana.com W: www.giovenzana.com

J Express Crane Services T: +27 (0) 11 864-8402 F: +27 (0) 11 864-8408 M: +27 (0) 83 425-5535 E: jexpress@telkomsa.net

IY Safety & Inspections T: +27 (0) 82 773-7019 C: +27 (0) 82 956-3176 E: bianca@iysafetyinspection.co.za W: www.iysafetyinspection.com

Morris Material Handling SA T: +27 (0) 11 748-1000 F: +27 (0) 11 748-1093 E: sales@morris.co.za W: www.morris.co.za Kemach Forklifts T: +27 (0) 11 826-6710 E: info@kemachjcb.co.za W: www.kemachjcb.co.za

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Levi’s Trio Engineering T: +27 (0) 11 907 9258 F: +27 (0) 86 742 9410 E: admin@levistrio.co.za W: www.levistrio.co.za

Haggie T: +27 (0) 11 601 8400 E: distribution@haggie.co.za W: www.scaw.co.za

Fastlift Cranes & Services T: +27 (0) 21 140 1514 (CPT) T: +27 (0) 10 141 0237 (JHB) E: bradley@fastliftcranes.co.za W: www.fastliftcranes.com

Jekko s.r.l. T: +39 0438 1410083 F: +39 0438 1710123 E: info@jekko.it W: www.jekko-cranes.com Haggie T: +27 (0) 11 601 8400 E: distribution@haggie.co.za W: www.scaw.co.za

Combi Lift T: +27 (0) 11 900-8010 E: victor@solutions-4u.co.za W: www.combilift.co.za

Kemach Forklifts T: +27 (0) 11 826-6710 E: info@kemachjcb.co.za W: www.kemachjcb.co.za

Liebherr Africa T: +27 (0) 11 365-2000 E: info.laf@liebherr.com W: www.liebherr.com LMI Academy T: +27 (0) 11 475-5876 E: info@lmi-academy.co.za W: www.lmi-academy.co.za

MH Dawood Plant Services T: +27 (0) 11 496-1007 F: +27 (0) 11 496-1198 E: info@mhdawood.co.za W: www.mhdawood.co.za

LMI Academy T: +27 (0) 11 475-5876 E: info@lmi-academy.co.za W: www.lmi-academy.co.za

Phakamisa Safety Consultants T: +27 (0) 11 462-9620/1 F: +27 (0) 11 462-9620 E: potto@icon.co.za W: www.phakamisasafety.co.za HIAB SA (PTY) LTD C: +27 (0) 11 865 1425 E: sales@hiup.co.za

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Smith Capital T: +27 (0) 11 873 9830 E: mail@smithcapital.co.za W: www.smithcapital.co.za

Dymot Engineering T: +27 (0) 11 970-1920 F: +27 (0) 11 970-1979 E: pa@dymot.co.za W: www.dymot.co.za