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00:00:15.679I want to clarify that this podcast is distinct from my responsibilities as a professor in the CMM Walton College of Business.
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00:00:31.120Nonetheless, it aligns with my aspiration to provide practical insights to professionals and business by showcasing companies and people that can enhance your ability to manage, lead, and strategize and market effectively and the retail value chain.
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00:00:34.079And now without further ado, let's get into the exciting episode.
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00:00:41.280I have with me today Sandy Parker, who is Director of Operations for Americold.
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00:00:45.759So thank you so much, uh, Sandy, for joining us today.
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00:00:46.320Yeah.
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00:00:54.000I think this is the first time I've covered cold chain uh directly uh on this podcast.
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00:00:55.600And it's so important.
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00:00:58.159It's surprising I haven't done it yet.
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00:01:04.480So um and it's great to talk to Analama with Walton College about this.
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00:01:18.400Uh but for people who aren't familiar with cold chain logistics, would you mind explaining a little bit about modern cold chain and also how it has changed over the past 10 to 15 years?
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00:01:23.200Aaron Powell So, you know, in in years past, it was more about just a cold box.
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00:01:28.159It was more about just holding temperatures and you know, shipping and receiving product.
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00:01:32.799Um recent in recent years, it's more become more about value-added services.
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00:01:36.799What else can we provide a customer while their product is in our care?
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00:01:44.000And, you know, that could be blast freezing or exporting or, you know, a lot of uh copacking or things like that.
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00:01:52.480So it's it's about being a partner, not just storing your product, but being a partner and being a a third leg maybe of your production facility.
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00:01:55.920I would think copacking would be a cold job.
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00:01:58.959Isn't that co-packing kind of a labor-intensive?
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00:02:03.120Yes, we and we normally do it on our docks, which is at 35 to 38 degrees.
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00:02:05.359We don't do it in the in the minus five freezers.
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00:02:09.520We bring it out to the dock in a in a kind of a production, more of a production area.
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00:02:14.319Because if you go into a a poultry production facility, it's going to be 35 to 38 degrees.
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00:02:16.400So we we can bring it out in that area.
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00:02:19.599We just have to make sure that we don't leave it in in that area for very long.
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00:02:22.240Once we get it co-packed, it has to go back in the freezer.
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00:02:25.280What companies do you primarily support?
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00:02:28.800I mean, food, grocery, pharmaceuticals, frozen, fresh.
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00:02:32.319Um we we support all nodes of the supply chain.
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00:02:36.479Um we do a lot of grocery, primarily food and grocery.
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00:02:42.879Um we do either uh we support on the ingredient side.
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00:02:51.199We can supply a facility with ingredients for their production, or we can have um we can store the finished goods on the other side.
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00:03:01.840At one of our uh facilities here in Arkansas, we have a customer that our we have two places there close to the their production facility, and one of our facilities has their ingredients.
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00:03:09.919Our the ingredients go to their production, and then once the finished product is done, it goes to another one of our facilities and we store the finished product for distribution.
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00:03:12.159Um we also do export-import.
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00:03:14.719I mean, every node of the supply chain we cover.
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00:03:23.199Um we are getting more into the pharmaceuticals, trying to get in that area and the in the not traditional cold chain areas.
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00:03:26.159But yeah, we're we're trying to branch out into those as well.
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00:03:30.719So, Cindy, what are some misconceptions about cold chain?
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00:03:42.240Um, it would be that that um sometimes our customers think that if they it's just everything's push of a button, that if they give us something that we should be able to just push a button and it's just gonna magically happen.
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00:03:48.479But there's a lot of scheduling and planning and things like that that go into us being able to support what they're asking for.
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00:03:49.840That's great.
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00:04:00.879Um so how have the expectations of large retailers like Walmart, for example, changed in recent years when it comes to cold chain performance?
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00:04:04.639They used to, as long as we shipped it, it was okay.
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00:04:10.000But now it's more about did we ship it on time and how much did it cost?
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00:04:14.159It we really got to focus on the things that are matter to them.
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00:04:21.920They've got they want to make sure that it's a good quality, is it's it's arriving on time, and um, how much is it gonna cost me?
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00:04:28.800They don't they don't want to that's our part of the the the supply chain is very cost um centric.
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00:04:32.399You know, they they're not getting anything out of it except for the delivery of it.
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00:04:33.519Got it.
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00:04:41.439And where do suppliers most often fall short when trying to meet retailer cold chain requirements?
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00:04:45.199Um a lot of times we have a problem with packaging.
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00:04:53.839Like if it's in the warehouse and it's gonna sit for a long time, maybe they what the the boxes or whatever they're using are is not exactly the best quality.
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00:05:01.439So we can have leaning pallets or compressed boxes, and um, that causes a problem for us, obviously.
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00:05:16.720Which suppliers are from your perspective, uh what separates suppliers that are easy to do business with from a cold chain perspective uh versus ones that are difficult to do business with?
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00:05:18.319Um communication.
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00:05:20.160It if it's all about communication.
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00:05:25.040The more they communicate with us, the better we are, what better we can handle their product.
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00:05:39.920Um we like to call it the good partners that they if they see us as their partner and they're willing to communicate with us, give us a heads up on things that are coming down the road, you know, good forecasts and things like that, that's really where we And is EDI a key part of that as well?
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00:05:41.120Oh yes, for sure.
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00:05:41.680Yeah.
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00:05:48.720Um we we most of our customers now, our larger ones, do all operate via EDI, you know, on the inbound side and the outbound side.
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00:06:04.079But way before EDI gets in the picture, we need if you can give us a forecast of what you're expecting your production to be two or three weeks down the road, that gives us a chance to plan our labor, plan our warehouse, and make sure we can handle your product rightly.
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00:06:04.639Correctly.
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00:06:14.720Aaron Powell How early should um suppliers be engaged in with the cold chain planning uh when they're introducing, say, a new product?
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00:06:17.199Aaron Powell From that from the concept conception.
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00:06:28.079You know, if they are planning to launch a new product, let's say for a holiday, and they wouldn't need us to store that product um if they're just thinking about it, go ahead and let us know.
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00:06:29.839You know, this is what we think we're gonna have.
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00:06:34.160And if it does even if it doesn't come to fruition, we can still plan for it.
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00:06:38.959And then if it gets down the road and they don't use it, don't do it, we still have planned for it.
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00:06:41.199And that that just is being proactive.
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00:06:49.600What are some of the biggest challenges associated with operating a cold chain facility these days?
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00:06:52.879Um it's always going to be people in power.
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00:06:57.439I mean, that's our two biggest problems or expenses even.
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00:07:06.480Um having the right labor to do the jobs that we need to get done, and then uh making sure we keep our power and utility costs low.
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00:07:12.000And um and you know, we are we're always trying to partner with our customers on their sustainability goals.
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00:07:16.639A lot of companies now have they don't want um things going to landfill.
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00:07:20.639So we try to partner with them and make sure that we can keep food out of landfill.
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00:07:20.879Trevor Burrus, Jr.
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00:07:23.759Capacity is always a concern in the supply chain.
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00:07:27.920Um where do you see the biggest bottlenecks forming?
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00:07:31.120Space, labor, transportation, energy?
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00:07:33.120It's secular.
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00:07:34.639Um things go up and down.
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00:07:40.480Right now there is a an overcapacity of a capacity, an overabundance of capacity.
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00:07:43.279And that a lot of that stems from COVID.
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00:07:49.199Um, because a lot of people got into the industry after COVID because there was a spike in inventories.
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00:07:54.560And so we uh right now there is a lot of capacity on the market as far as cultureing.
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00:08:03.839Um, but American has been in the business for 125 years, and we um always want we we have a lot of associates that have a lot of tenure.
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00:08:05.920I mean, I've been with the company 32 years.
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00:08:16.240We have a lot of people that have been around 40 and 50 years that we have the expertise to make sure that we are the best in the business and that we can give our customers the best service.
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00:08:25.199How does seasonality and promotional activity from retailers affect cold chain planning?
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00:08:34.080Uh specifically for the sites here in Arkansas, um we do a lot of of protein for uh the holidays for Thanksgiving and Christmas.
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00:08:39.440And um we'd like to call the the six weeks leading up to Thanksgiving our Super Bowl.
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00:08:45.519We plan the entire year to to execute that for those um holiday turkeys.
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00:08:55.039We um staff for it and warehouse our warehouses and to so we can ship those turkeys out efficiently.
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00:08:57.120I hadn't thought about that.
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00:09:02.399I can see yeah, turkey would be a big issue around Thanksgiving.
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00:09:02.879Yeah.
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00:09:19.759Um so I'm really familiar with warehouse operations, distribution center operations, cross-docking operations, fulfillment operations, but not very familiar with cold chain warehouse operations.
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00:09:31.360So in the cold chain uh operations, what looks simple on paper but is more difficult to execute in the temperature-controlled environment?
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00:09:31.679Trevor Burrus, Jr.
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00:09:35.120Well, you've got to uh make sure you're keeping your associates warm.
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00:09:40.879I mean, and that that means that um you've they've got bulky PPE on.
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00:09:44.080You know, they've got a warehouse, I mean a freezer suit on.
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00:09:46.799So they we've got to make sure that they're taken care of in that area.
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00:09:51.039And maybe if they're in their case picking, they may not be able to move as fast.
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00:09:59.279We have to make sure we have support them as far as ergonomics go and make sure they're doing the right lifting techniques with all this bulky equipment on.
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00:10:02.080And then also um equipment life.
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00:10:10.320You know, your batteries in a minus five environment, your batteries on your forklifts are not gonna last as long as they would if you were in 70 degree weather.
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00:10:18.159So that's just an extra layer of um complexity when you're in a cold environment.
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00:10:24.080Are there some technologies that have emerged that are really helping the cold chain environment?
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00:10:25.039For sure.
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00:10:31.360Um we here in Arkansas, we have uh just opened up an automated facility in Russaville.
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00:10:39.600Um it's I think we opened it last year or the year before last, I actually that that takes the humans out of the cold.
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00:10:43.120So that that that facility is 100% automated behind the wall.
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00:10:43.759Wow.
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00:10:44.159Yeah.
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00:10:52.639So the only reason people have to go in there is if there's a an issue with a pallet or a breakdown on mechanics or a PM and the machinery or whatever.
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00:10:57.120So that that takes a little bit of the um complexity out of it.
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00:11:01.519Now, there's a different set of complexity because you've got to make sure that the automation is all running correctly.
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00:11:02.240Sure.
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00:11:05.679Um, but but it takes the human element out of that part of it.
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00:11:07.919Um we are leaning on AI stuff.
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00:11:17.279That's another initiative that we're going into is trying to do more with AI and predictabilities and labor planning and all that kind of thing.
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00:11:21.519Um then we're also using some in the uh safety part of it.
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00:11:34.240Um we have some companies that we're talking to that uh can look at video of our of our workers and identify if they're not lifting correctly or if they're not doing the right things that can be on the on the safety side of it.
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00:11:51.759And then also with um on AI with um noticing heat, like if you if you have a camera and there's um a heat escape from the from a roof because of a bad roof from the yeah, from the roof because of a bad roof, then we can identify that and be proactive about getting that replaced.
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00:12:02.960How important is real-time temperature monitoring as well as um information sharing um with retailers and suppliers?
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00:12:04.320Aaron Powell It's very important.
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00:12:08.960I mean, that our customers want real-time data all the time.
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00:12:17.360Um a lot of our customers we we have a um right now, we have a actually our new version of it is launching on Monday.
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00:12:19.200It's called American Compass.
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00:12:23.200And it's a real time interactive with our customers.
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00:12:28.480They can log in and see their real-time inventory right there on their on their screen.
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00:12:37.039Um, and also we have customers that we put data loggers on their trailers so they can monitor the temperature of their loads as they're going down the road.
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00:12:41.759They can see where their loads are at and what the temperature of that load is as it's being delivered.
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00:12:42.720Neat.
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00:12:50.399Where do you see suppliers underutilizing the data that cold chain providers could give them?
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00:12:57.440So American has obviously we have a supply chain solutions department.
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00:13:14.879So we can go in with our customers and look at where they are producing the product, where they wanted to deliver the product, and give them the optimum solution to where they want to store, where they should be stored and what real time where they should uh where it should be along the supply chain.
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00:13:37.679Like we had just had a customer uh recently that we worked with in our supply supply chain solutions department looked at every one of their shipments from 2025, where it came from, where it was produced, where it came to us, and where it was eventually shipped to and said, okay, this is where you're underutilizing, this is where you could do better on utilizing our warehouses.
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00:13:39.039That's great.
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00:13:39.360Yeah.
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00:13:44.639How close are we to true end-to-end cold chain visibility?
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00:13:52.720With the the new um VSMA 204 rule that's farm to table, farm, farm, yes, farm to table.
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00:13:54.879Um, it's it's very close.
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00:14:01.279Um with these new technologies and the new guidelines that are coming out, and it's the guidelines are already there.
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00:14:03.120It's already in in practice.
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00:14:18.559We have, I believe, until the middle of next year to actually implement it, but it's going to give us a lot more visibility where we've got a standardized uh lot and a standardized um expiration date on products to where we can have a lot more traceability on products.
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00:14:27.679From your experience, where are the most common causes or what are the most common causes of temperature excursions?
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00:14:32.480It's usually in the transition between transportation and warehouse.
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00:14:42.240That's where you can have your temperature abuse with products sitting on the docks too long, or maybe there's an issue with the trailer in in that area.
00:14:42.480 -->
00:14:45.679But normally, if it's in the warehouse, it's going to be maintained.
00:14:45.759 -->
00:14:47.679Or if it's on the trailer, it's going to be maintained.
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00:14:49.200Those things are being monitored.
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00:14:59.360Um I mean, we have things that if there's a if there are we have rounds, and then if there's an area in the freezer that goes out of range, it gets reported immediately.
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00:15:00.480The same with the trailer.
00:15:00.559 -->
00:15:07.200I mean, those drivers are always checking their trailers and making sure that the product is the right temperature on the trailer.
00:15:07.360 -->
00:15:09.519It's that that transition between the two.
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00:15:14.960If something sits on a dock too long or um somebody's not paying attention, that's where you can really have exposure.
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00:15:20.960How should suppliers think about risk sharing if something goes wrong in the supply chain?
00:15:21.440 -->
00:15:24.960It's it's really about uh well, we know these things are gonna go wrong.
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00:15:26.639Think things are gonna happen.
00:15:26.879 -->
00:15:31.360But it's thinking about um how you handle the situation.
00:15:31.600 -->
00:15:43.120Um suppliers want you to know what happened to the product, they want you to investigate it, they want you to develop a root cause and then tell them how you're gonna mitigate it going forward.
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00:15:51.600What compliance or food safety requirements are getting stricter and how should suppliers prepare for these?
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00:16:02.799Going back to the FSMA 204 rule, um that's we've already we're already engaging with customers about how we can make sure that we meet the requirements for that rule ahead of time.
00:16:02.960 -->
00:16:14.080Like I said, it's not it's it's inacted, it's active, but we don't have to be compliant for another year and a half, but we're already ahead of the game on it and trying to make sure that we're ready for when it's we have to be compliant.
00:16:14.559 -->
00:16:20.639How do recalls or quality incidents play out on the cold chain side?
00:16:21.039 -->
00:16:23.600Um most of the time it's generated from our customers.
00:16:23.759 -->
00:16:31.840They will tell us um when there's an issue with the product based on a specific lot or a specific specific day of production.
00:16:32.000 -->
00:16:39.279And then our WMSs are very good at being able to track that information and give them the cut the information that they need.
00:16:39.759 -->
00:16:42.320So cold chain is expensive.
00:16:42.639 -->
00:16:49.440Um where does it make sense for suppliers to invest more or and where are they overspending?
00:16:49.919 -->
00:16:50.879The communication part.
00:16:51.039 -->
00:16:56.080You know, give us the giving us accurate forecasts so that we don't get caught in a pinch.
00:16:56.159 -->
00:17:03.600You know, that if we have the the labor and the things we need to handle their product down the road, that save them money, you know.
00:17:03.759 -->
00:17:17.039Um also on the packaging, going back to that, um, if they are using good good quality packaging, they could have will have less damage of their product from it sitting in a warehouse longer.
00:17:17.200 -->
00:17:20.880Um, and usually utilizing the best forms of transportation.
00:17:21.039 -->
00:17:32.079Um they there's a lot of things that we can do to help them mitigate their cost on the transportation side, whether it's looking at trucks versus rail or the other way around.
00:17:32.160 -->
00:17:48.160Um we just implemented um a facility in Kansas City that um and we partnered with CPKC, the railroad company, and we will be able to export product directly to Mexico without it stopping at the border.
00:17:48.400 -->
00:17:51.599So that we have uh America, I mean, that we have U.S.
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00:17:59.359and Mexican inspectors right there in-house in Kansas City that will inspect the inspect the product before it goes on the rail car.
00:17:59.440 -->
00:18:02.319And so that way when it gets to the border of Mexico, it doesn't have to stop.
00:18:02.480 -->
00:18:05.200So that saves them time and money once they get to the border.
00:18:05.680 -->
00:18:06.319That's great.
00:18:06.640 -->
00:18:19.039So, Cindy, you know, when we think about supply chains, you know, there's um the transportation costs, the inventory cost, and um stock-out costs.
00:18:19.279 -->
00:18:24.079Um there's so many different costs, labor and material handling costs.
00:18:24.240 -->
00:18:40.480And it's been really interesting to talk to you about cold chain, because cold chain makes everything a little bit more expensive from in the supply chain, both transportation, warehousing, which also makes the inventory holding costs higher.
00:18:41.039 -->
00:18:46.799And so I can see you you emphasize the importance of communication quite a bit.
00:18:47.039 -->
00:19:00.319I can see why communication, forecast, all of this is even more important in the cold chain than it is outside of the cold chain, especially when you're talking about really expensive items like pharmaceuticals.
00:19:01.039 -->
00:19:02.799Uh so this was really informative.
00:19:02.960 -->
00:19:05.279Thank you so much for taking time to visit with us.
00:19:05.440 -->
00:19:06.079Really appreciate it.
00:19:06.400 -->
00:19:07.119Thanks for having me.
00:19:07.279 -->
00:19:08.240It's been fun.
