Chillers are typically bulky, noisy energy-intensive devices loaded with toxic chemicals with a very high climate change potential. We use them all the time in supply chains to keep goods in a particular temperature range.
What if you could make chillers another way? That is what Phononic has done. They have created solid-state chillers which run virtually silent, using a fraction of the power of standard chillers, and are so small they can fit in regular retail totes.
To learn more I invited Dana Krug, Phononic's General Manager to come on the podcast to tell me more.
We had a fascinating conversation, where Dana told me how their chillers work, how they can be utilised in supply chains for more reliable cold chains, and some results their customers have had. I learned loads, I hope you do too...
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Having the ability to understand exactly what the temperature is in every one of our totes all the way through, and then have the documentation. So if anything was to go wrong, we've got complete traceability back all the way down to that actual tote. And that's done without having human intervention, it's all automatedTom Raftery:
Good morning, good afternoon, or good evening, wherever you are in the world. This is the digital supply chain podcast. The number one podcast, focusing on the digitization of supply chain. And I'm your host global vice-president at SAP Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me on the show today, I have my special guest Dana. Dana, thanks, a million in for joining us. Would you like to introduce yourself?Dana Krug:
Tom, thanks for having me on, my name is Dana Krug. I'm the senior vice president of cold chain for Phononic. Phononic, if anybody is not aware around the world, we're based outta Durham, North Carolina in the US. And, we are really focused on being the sustainable leader in cold chain, and using solid state technology to do that.Tom Raftery:
Okay, so thank you, Dana. We will have to dig into that a little more because, there are a lot of people who, put out sustainability claims, and we don't really want to be accused of greenwashing. So what about the Phononic's solution, in cold chain makes it sustainable?Dana Krug:
Yeah, Tom, it's a good question. And there is a lot of greenwashing out there, so I think it's important to call it out. So there's a few things that, really, highlight that area. One is, that we use for our refrigerant in our cooling system. We use actually CO2 in water as our refrigerant. So if you think about CO2, it's got a greenhouse warming potential of 2 versus, other, refrigerants that are out there that could be in the hundreds or in the thousands. And if you look at some of the statistics the average, if you go even back to 2015, the average greenhouse warming potential of refrigerants was almost 2000. and again, we're talking about two. What they believe that the greenhouse warming potential will be going out to say a, 2030. You're still looking at an average of about 400, but again, we're at two.Tom Raftery:
Amazing. And how are you doing it? I mean, how are you managing to use CO2 when everyone else is using? I dunno, whether are they using H CFCs or something like that or PFCs or some of these ridiculous chemicals?Dana Krug:
Yeah. So Tom, we use, solid estate technology. It's it is semiconductor based technology, that allows us to use the CO2, in a, a relatively low pressure as well. So our technology actually is the solid tech technology and without the need for the compression, capabilities that you have to use with most of these refrigerants, we can use water and CO2 in an environment, that allows us to get down to freezing. So what you won't hear in the market today because solid state technology for freezing has actually been around almost as long as the compressor. The problem is, is that nobody in the world has had the ability to get down to the temperatures using the refrigerants that, Phononic uses, to be able to achieve that, in a sustainable environment.Tom Raftery:
And what kind of temperatures can you get down to with your system?Dana Krug:
So we actually run our freezers, in our cold chain at a minus 20 C. and what you'll find mostly in the world today, when you talk about, this type of technology, the best that they can typically do is, like wine chillers, where you're, you're just trying to chill either a bottle of wine or a bottle of champagne they don't have the ability to get below freezing.Tom Raftery:
Okay. So very good. That's minus 20. That's nice and cold. I gotta think and correct me if I'm wrong here, Dana, but I gotta think if you're not using a compressor and you're just using solid state, there's gotta be a huge energy saving there as well, no?Dana Krug:
Yeah, there really is. And, and when we look at our sustainability story you know, when we look at our cold chain and, and the elimination of compressors using what we call on demand, cooling meaning you only cool what you need to cool when you need to cool it and for the temperature that needed to cool it, you' will actually reduce your energy consumption. One because you're not actually running the system all the time. especially when you start getting into supply chain, right? So supply chains typically will only run in maybe two shifts a day. Which means that about half of the day, they're just cooling or freezing just air and not a product. So we're actually able to shut our systems off and run only when we need to. So that's one area where we really shine when it comes to power savings. The other is, is that we're only cooling what needs to be cooled. So if you think about some of these warehouses we are only freezing the food that's actually in our totes versus again, a big, huge warehouse where you're cooling just air. So it gives us a pretty good ability there to reduce our, our energy consumption. And then when you're looking at across the board, when we start looking at like a, a grocery And when we can eliminate dry ice in the delivery side, if we can eliminate the, the need to cool an entire warehouse, if we can move from, toxic refrigerants to CO2 and water, we on a per store basis, we can typically reduce your carbon footprint by about 2.6%. So it doesn't sound like a huge amount until you start adding that up. So in a 50 store sample you're actually eliminating 8.6 million pounds of, of carbon or CO2. So you start extrapolating that out to where we believe that we will be in the next four to five years. We are looking, our goal is 20% penetration into this marketplace. And if you can get to that 20% penetration rate, we believe that we can reduce that carbon footprint by 1.5 billion pounds per year. So pretty significant.Tom Raftery:
Amazing. And okay. Carbon footprint is, is fantastic. And I'm a huge believer in sustainability and sustainable solutions, but can you translate those that savings into energy and therefore money?Dana Krug:
Yeah, there's actually a, a few things that we look at when we look at ROI. So energy is one of those. So we can, we can show an actual cost savings on the energy side for some of the reasons that I, I referred to. But the, the solution that we use when we're doing this type of cooling actually unlocks a lot more from the return on investment. Right. So, we're seeing it in labor. We're seeing it in efficiency. We're seeing it in speed to curb. We're seeing it in the ability to, to actually do last mile delivery using our totes and eliminating the need for tri temperature trucks. We have the ability to eliminate the, the warehouse cooling. So all of those systems in the high capital costs that go into building these fulfillment systems in the warehouses, and then having to recreate that same cooling environment in three different temperature zones throughout the entire fulfillment process from a, a micro fulfillment center for grocery to the middle mile kind of hub and spoke out to the store. Inside the store and then last mile out for delivery. What is happening today is they have to recreate that environment, the frozen, the refrigerated, and the ambient. Using our totes. They actually can use the exact same tote that's being used in the warehouse, in the automated robotic systems all the way out to the customer's front door. And there's a huge savings because of that.Tom Raftery:
Okay. Fantastic. And you've talked about these totes several times, but you haven't explained what they are just for people who might not be aware.Dana Krug:
Yeah. So, so what we're talking about is if you think about a tote that is roughly a foot foot and a half tall about two feet wide and about a foot, foot and a half in depth and those totes today, you'll see not our totes. In particular, but you'll see totes that are used to carry groceries. Whether that be in an automated environment, it's usually just a transport mechanism. So that transport mechanism today is just an ambient basic I'll call it a holy tote. It doesn't have any intelligence to it. It's just a storage container. So, what we have built Tom is, is a, an active, intelligent tote that actually has the ability to cool, to the temperature that is required for specific food. So if it's, if it's a a chilled tote, Or if it's for vegetables, which may be a little bit different temperature we actually have the ability to chill to that level. These totes are closed lid totes, obviously, cuz you gotta keep the cold in. But the tote is actually has IoT on them. So we actually have the ability to track cold chain from the point again that you put it into a, warehouse all to the customer. So I can tell you and assure you, Tom, that if you order something from a grocery store, And you want your ice cream to, to end up at your doorstep, still ice cream and not pudding then I have the ability to assure you and actually show you the temperature that, that ice cream was kept at from the point in time that it went into the, the warehouse to the point in time that it hit your doorstep.Tom Raftery:
Fantastic bit of a left field question here dana, can you do the same for heat? Can I get my pizza delivered and and know how hot it's been all the way.Dana Krug:
Yeah, Tom it's the, the technology's kind of interesting because it actually has the ability to do both heating and cooling. So we can actually reverse the, flow of the current and, and produce the hot on the other side. So the way that the technology actually works today is you have a couple of pieces of metal that actually by running the current through, you're pulling heat away from one side and rejecting it out the other side. And by pulling heat away, you create cold, right? We have the ability to do the same thing. If you want to heat one side, all you're really doing is reversing that flow. It's not an area that we've gone heavy into yet. We're really mainly on the cold chain side. But what you're really talking about is, is being able to control temperature both high and low.Tom Raftery:
And is it just the retail sector? You're going after?Dana Krug:
No, it's not. So there's, there's a few things. So from our company's perspective, there's actually three areas that we use this technology. One is in micro cooling. So think about data centers where you have to be very exacting on, on keeping temperatures actually warm or cold, right? Cause there is a warmup phase that you have to do in some areas. We also do this in healthcare. So think about labs pharmaceutical, where you're trying to keep the temperature of the, medication or the vaccine. Very, very consistent. Our technology will actually hold that temperature about 0.4 degrees plus or minus of what your set point is so very different from compressors, right? So compressors, you might swing 8, 10, 12 degrees from your highs and your lows because compressors are brute force. Is kind of how they do things. Blow a lot of cold air in, let it warm up, blow a lot of cold air, let it warm up. So, that's another area that we're, very um, prevalent in, in the healthcare side and then the cold chain side and the retail side, we're doing point of sale refrigerators as well as point of sale freezers. So think about getting your ice cream treat right at the cash register. And the reason why we can do that is again, the technology very small the compressor replacement that we use, which we call a heat pump is actually about a half the size of an iPhone. So think about that, replacing a compressor itself so we can put treats at the counter, give the interior capacity of, of a freezer or of a tote. To maximize that interior capacity cuz we're not using it for the compressor itself.Tom Raftery:
Okay. Very cool. Literally um, I assume as well, because there's no compressor, it runs silent.Dana Krug:
Yes, it does. So the only thing that's moving on, any of our products are fans. So think about your, fan in your, computer. That's really the type of fans that we're using. And that fan is really being used to just pull the heat away from our heat pump. And. It actually rejects the, heat very, very slowly over time versus again, a compressor might kind of store the heat and then reject it. We will actually do it very, very slowly over time. So we're only two to four degrees above the ambient in the room. So you don't get that huge warming effect. If you think about having, a bunch of refrigerators or freezers in a room and having them all turn on You don't have that same effect with our technology.Tom Raftery:
I'm sure the, the lack of noise is appreciated by the people at the checkout.Dana Krug:
Yes, it really is. And that's one of the reasons why we can be at checkout. You can have a normal conversation without having to talk over the, compressor turning on and off. And if anybody's ever heard a compressor going bad they can get pretty loud. And then if you think about it from what we're doing in the cold chain side, Tom, you know, if you've got 3000, 4,000 of these totes running in an automation facility, you can't have that level of noise nor can you have that level of kind of energy pull on and off, cuz if you remember, or you probably have seen that when a compressor turns on your fridge, turns on your lights kind of dim a little bit. Right? So it's, it's that startup phase is, is drawing a lot of power. The way our technology works is we get to a steady state. We just maintain that state with very small amounts of energy to keep the heat levels or the cooling level perfect inside the tote. So we can, we can do that in a very, very, very quiet environment.Tom Raftery:
Okay, very good. And the, the cold chain that you're talking about, I mean, that's gotta be useful for, as you said, healthcare and retail. And you said their IOT enabled as well. So they're constantly talking back. How important is that? Is the traceability in cold chain for your customers?Dana Krug:
It's very important and it's becoming more and more important. Uh, So if you think about the what's happened over the least, the last three years and delivery has accelerated by probably five years the whole curbside pickup eCommerce grocery is accelerated by, by at least five years. And what's happened is everybody is trying to figure out how do you get groceries to the customer? And I think they're using just about any means possible to do that. And I think this is where, everybody in the world has been so innovative on trying to make sure that they can get food to people. The only problem that you start running into is some of these, some of the ways that they've done that may not be following the best guidelines for safe food or safe quality or good quality food. Having the ability to understand exactly what the temperature is in every one of our totes all the way through, and then have the documentation. So if anything was to go wrong, we've got complete traceability back all the way down to that actual tote. And that's done without having human intervention, it's all automated. So it doesn't add to the cost for the retailer or for the, distributor. It's something that's done automatic. And if you ever have to go back, it has the ability to alarm. So if something was to go wrong. Then we have the ability to notify and actually pull that out of the system, which is quite a bit different than if a warehouse has a problem. If a warehouse has a problem, you may lose the entire warehouse. If our tote was to have a problem you're gonna lose one, one totes order, right? Much, much smaller. So not one point of failure as you would have with some of the other systems.Tom Raftery:
Fascinating. And are there any customer outcomes that you can speak to? Any, any big wins of where you can speak to, X customer saved Y amount of carbon or Z amount of, of money or all of the above?Dana Krug:
Yeah. So we do. We've, got I can't give you specific names cuz we're, we're we're not able to do that. We've talked to our customers about this. Um, But we're, we're seeing some really extraordinary results. So we've got a, one of the largest grocers in north America that we are actually seeing where placing the totes in the store. So this is actually doing the fulfillment from the store itself. And what we're seeing is because of the flexibility of our tote and the ability to either pick directly into the tote or store the order for the customer on a single shelf. So think about when you drive up, which I think everybody's experienced having to drive up to a grocery store to have them bring groceries out. And what typically will end up happening is as soon as you get there, they will start assembling that order. And, what you don't see behind the scenes is somebody takes a cart and they, grab all of the ambient stuff off a one shelf. Then they, roll their cart back to a, a reach in or a walk in refrigerator. They pull some stuff out of that area after searching for it. And then they kind of roll their cart to a freezer area. They, they do the same there. And then kind of get it ready to, to be sent out to the car. What we're doing is actually giving them the ability to put your entire order on one shelf. There's no searching. So what we're seeing with that is we're seeing a 335% reduction in that search time. And what that really equates to when you start really diving into it is we're able to get the, customer's order out 35% faster than what they could do before. And what's really impressive, Tom, is that we can do consistently. We can get the order out to you when you come to the, curb in under two minutes. So customer satisfaction's very, very high from doing that. And quite honestly, there's a revenue opportunity there for the, grocers, because they can turn over those parking spots and get the customers moving 35% faster. That means that all of those pickup slots that everybody, really covets that they wanna be in that one specific time slot. They've just opened up 35% more time slots, and that means more revenue and, better customer satisfaction.Tom Raftery:
Very nice. Very nice. Okay. Dana, we are coming towards the end of the podcast now. Is there any question I haven't asked that you wish I had, or any aspect of this, we've not touched on that you think it's important for people to be aware of?Dana Krug:
Yeah, Tom, I think just to talk about uh, more What we look at as an ecosystem on how our totes run. And I think it's important for the audience to understand that if you're a grocery store and you're just doing a manual, picking in the store and trying to get it out to the customer, we've got a solution that has a fantastic ROI that is fully sustainable. If you are looking at last mile and you want to use electric vehicles, for your last mile, because you're really trying to push that sustainability side instead of adding to the carbon problem that we've got or the carbon footprint problem. We have a solution that allows you to turn a, a electric vehicle into a tri temperature electric vehicle with our totes and you do it completely sustainable. And what I think a lot of people might think is, well, that's gonna kill the range of my electric vehicle. And, and the answer is it's about a two to four mile impact on the total range for delivery of that vehicle. So you have a very strong story there that is not just a story about sustainability, but the ROI can increase. And then kind of going a little bit more up the, up the chain, the ability if you're just running automated micro fulfillment centers. We have a fantastic solution because the problems in a, automated center are quite different than what they are in, in a retail or a last mile because automated centers right now typically will not run any of their frozen through an automated system, which sounds kind of funny. You've got an automated center. You put it in because you need your UPH or your units pick per hour to be at the highest level possible to get that efficiency, to get your cost down. They'll run their ambient, they'll run their chilled, but they won't run their frozen and they won't run their frozen because robots don't like frozen. They actually don't like chilled um, you know, so the ability to run now, all of your entire order in your automation system, which is why you put it in to begin with, we enable that capability. So I think that's, that's something important for your, for your audience to hear.Tom Raftery:
Oh, very good. Very good. Super Dana. That's been great. If people want to know more about yourself, Dana Krug about Phonics or any of the things we discussed in the podcast today, where would you have me direct them?Dana Krug:
Tom, I'll send you, I'll send you some links that you can put up on your site. And we'll make sure we get that over to you quickly.Tom Raftery:
Phenomenal. Great. Dana. That's been really interesting. Thanks a million for coming on the podcast today.Dana Krug:
Thanks a lot, Tom. I appreciate the time.Tom Raftery:
Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, head on over to sap.com/digital supply chain, or, or simply drop me an email to Tom dot Raftery @sap.com. If you like the show, please, don't forget to subscribe to it in your podcast application at choice to get new episodes, as soon as they are published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks, catch you all next time.