Current trends and practices in the industry are requiring a change in the way refrigerated and cold storage facilities operate. Order sizes are shrinking while the frequency of orders, as well as SKU counts, are growing. At the same time labor, space and energy costs are still growing. Couple this with the looming issues around Health Care Reform, CFAT, Truck Driver Certification and where current legislation is on Card Check and FoodSafety, and further operational costs can only continue to rise. With all of these issues, it is more and more difficult for companies to maintain their traditional profit base, let alone receive board level approval for large capital investments.
There are no two refrigerated or cold storage facilities alike. Operational issues around commodity, distribution and import/export environments present vastly different handling requirements. Therefore, the point solutions for one may not work well for another. However, all refrigerated and cold storage operations share a common incentive to drive down costs associated with L.E.A.D.S. (Labor, Energy, Accuracy, Damage & Space).
In general, refrigerated and frozen food warehouse and distributors look for short-term, rapid payback solutions that can be implemented within existing facilities. The problem is that educating the market on available automation options has traditionally been poor and hyper focused on large scale automated systems rather than smaller scale solutions with justifiable ROI / IRR.
When it comes to material handling automation, there is a general industry perception that if you are going to consider automation it has to happen when you are planning a new, very large greenfield project. There are, in fact, many automation “point-solutions” that can be implemented within an existing facility. They provide a justifiable ROI, will adapt to changes in your business conditions and have proven successes in refrigerated and frozen environments; effectively reducing your operational costs by 20-30%. With automation you can do more within your existing footprint, expand and add automation or build new. Each approach has its own unique justification based on your unique operation.
This past year, in conjunction with the Global Cold Chain Alliance, I led a research/survey initiative to better understand where the Public Refrigerated Warehouse (PRW) industry was in its readiness to implement automation. One of the more interesting findings was that there appears to be tremendous opportunity for automation point solutions for existing facilities within this segment of the refrigerated and cold storage industry. This is a finding that we are now seeing as a trend throughout the industry as a whole.