Given all that has happened in the last 12 months, the importance of cold chains management in supply chain has jumped to the fore.
With this in mind I invited Deloitte's Subit Mathew to come on the podcast. Subit is a Managing Director in Deloitte’s Enterprise Performance Consulting Practice and as such manages Deloitte's cold chain solutions.
At the end of our interview Subit mentioned this page on Deloitte's website for people to find out more about Deloitte's Digital Supply Chain Solutions.
We had a fascinating conversation - and I learned lots about this aspect of supply chains _ hopefully you learn lots too...
If you have any comments/suggestions or questions for the podcast - feel free to leave me a voice message over on my SpeakPipe page or just send it to me as a direct message on Twitter/LinkedIn. Audio messages will get played (unless you specifically ask me not to).
To learn more about how Industry 4.0 technologies can help your organisation read the 2020 global research study 'The Power of change from Industry 4.0 in manufacturing' (https://www.sap.com/cmp/dg/industry4-manufacturing/index.html)
And if you want to know more about any of SAP's Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don't forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.
And remember, stay healthy, stay safe, stay sane!
How do you harness the power of the sap ecosystem to go beyond the boundaries of your organization, and really steward your products all the way to the hands of the consumer with high quality is really kind of the focus of where we try to go with that without cold chain offering and cold chain applications.Tom 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 of 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 Subit. Subit, would you like to introduce yourself?Subit Mathew:
Sure. Thank you, Tom for for having me on the podcast. So quick intros, Subit Matthew, I am a managing director in Deloitte's SAP practice. I've been in the sap space for about 18 years now, you know, working with clients of of all industry backgrounds, helping them through their SAP transformation journeys. internally at Deloitte, I also lead our SAP Supply Chain Management market offering. And what that really means is focused on the supply chain management stays focused on bringing our best thinking innovations and assets to clients that are looking at supply chain trends. So happy to be here and spend some time talking to you.Tom Raftery:
Superb, and thank you for coming on the podcast, I'm excited to, to have the conversation that we when we were talking in the setup for this podcast, we were talking about the importance of cold chain logistics. And I mean, we know now it has been highlighted, particularly with the likes of the Pfizer, and less so but also with the Moderna vaccines that cold chains are important. Can you talk to us a little bit about why they are important? What's so important about them? And you know, what can we do to a, you know, increase their resilience?Subit Mathew:
Absolutely. So maybe before I go to cold chain, specifically, Tom, let me kind of maybe start with just what we've been observing, right. So if you look at supply chains from four or five years ago, they were all very focused on efficiency, cost reduction, you know, being reactive to demand profiles, how do you do more for less etc, right? Yeah. And, and cost centres exactly right. And topics such as cold chain, and how do you do transportation and logistics when your product has environmental sensitivities around it, you know, be it temperature, pressure, etc, was certainly, you know, important supply chain considerations. But I think everything's kind of come to a head with what we've seen with the pandemic in the in the last year of finding right. I think suddenly, our our clients supply chains have become much more risk averse, right? agility and operational flexibility as has risen to the surface, right? You know, portfolios are getting disrupted, clients are looking for more intelligent virtual supply chain. And I think it's all of those things coming together that is really highlighted the importance of, of cold chain for industries that it applies, right? So when you look at clients that are in pharmaceutical manufacturing clients that make refrigerated consumer products, chemicals, etc? How do you harness the power of the sap ecosystem to go beyond the boundaries of your organization, and really steward your products all the way to the hands of the consumer with high quality is really kind of the focus of where we're trying to go with without cold chain offering and cold chain applications. So, you know, that's, that's kind of the impetus behind it.Tom Raftery:
Okay, and how do you?Subit Mathew:
Good question. Okay. So, so, so maybe I'll start by by walking us through a scenario or a use case, and then we can step a little bit into how it really comes to life, right? So, so imagine you're a pharmaceutical manufacturer or a vaccine manufacturer in this instance. And you're looking for a mechanism to manage the temperature parameters of your product. When it's in your warehouse. You're looking for a mechanism to figure out how to effectively plan the load of that product as it goes from your warehouse to a customer or a forward deployment and see if How do you track that product as it's making its way through that journey and ensuring that it is fitting within whatever the whatever the environmental parameters are? And most importantly, around all of this? How do you react when there is an event or a situation? And what are some of those follow on actions you can you can take, right. So, if you were to, if I were to dissect that down what they've done with the cold chain application and and that entire process is utilize the power of the SAP Cloud Platform. And some of the IoT machine learning capabilities that are in the platform, is start with allowing clients to manage the product when it is in the warehouse, building apps that allows you to build loads intelligently, depending on where the product is going to what might be the temperature conditions that exist along the way. And then using some of the capabilities around, you know, map management, route management, etc, to actually track that shipment along the way. So imagine being able to get alerted if the trucks refrigeration system isn't working. And because of that your product is starting to approach a dangerous level. But also, if I extend that out, it's not just about getting an alert, right, it's actually being able to then act on it, maybe that means trying to find the nearest old warehouse that you can route the product to, so that it can be housed there till the issue is resolved. or finding an alternate route or an alternate truck for you to be able to continue the shipment of the product, etc. So it's, it's those kinds of features that really are cold chain app and offering are kind of bring to life, right? And then, you know, what this really means to organizations is inventory efficiency, inventory, leakage is a is above and beyond a quality issue. It is also something that directly impacts your bottom line, right? There's actually a statistic that says that in the pharmaceutical industry on a yearly basis, about $35 billion worth of product is lost because of you know, cold chain transportation principles not being applied or the product higher temperature excursion. That's the Wow, that's huge.Tom Raftery:
That's huge. And the the app that you guys have developed, what are the the main business outcomes of that?Subit Mathew:
So it is primarily focused on increasing supply chain traceability, increasing operational agility? So if you run into an event or a situation, how do you react to it improving your inventory efficiency and reducing your inventory leakage and shrinkage costs, which then obviously directly impacts your, your working capital. Right. And I think particularly these days with the situation that's underway with vaccines, etc, I think there's also a intangible impact it has on society at large that, you know, I think we're particularly proud of soTom Raftery:
nice, nice and is pharmaceutical The only industry that this applies toSubit Mathew:
so not not not really actually pretty much the although it's called cold chain, but if you step away from the cold aspect of cold chain, it is any kind of logistics processes that have environmental parameters that impact the product, right? So, pharma is a great example vaccines, medication, etc. It could also be parameters such as shock, pressure, etc. It doesn't have to be temperature, right. So, think of chemicals manufacturers that have to ship the product under specific pressure conditions, because it stays liquid during transportation as opposed to becoming a dangerous gas right as an example, okay. Certainly your consumer products companies that make ice creams and things like that need for example, food items that need to be moved under specific conditions. So I say chemicals, pharma, consumer products, industrial products, pretty much any place where there is a environmental parameter that has to be managed, is this worker focused?Tom Raftery:
Okay, okay. And then what kind of if people want to, you know, kind of roll this out what what, what do they need to consider for implementationSubit Mathew:
So, I'd say like this, right. So I think the the technology itself, which leverages the SAP Cloud Platform, the app and the ecosystem around it is already built and ready to go. We can deploy an app like this for a client that is using sa ps4 hana, it can also be used with clients that are using maybe versions of ECC, it truly adheres to the principle of a kinetic core or a clean core, where you take your existing DRP footprint operated side by side with the SAP Cloud platform to to get some of these additional database. Right. So that's as far as the the application or the software side of things. Now, certainly are some of these tracking and management processes might be new for a client. And so so there's certainly some degree of, you know, process alignment that has to be done around enabling cold chain transportation. And obviously, there's some hardware considerations in terms of being able to deploy IoT sensors and hardware gateways, that can actually measure these parameters, both inside your four walls, but also, as it makes sense with your supply chain. I'll, I'll go so far to say that, you know, you can deploy something like this within an organization in as little as six to eight weeks or beyond, depending on sort of where the organization is in their journey towards something like this.Tom Raftery:
Okay. Yeah, I assume then it it hooks into telematics? To get, you know, details from trucks and warehouse to get details from warehouses? and all those kind of things as well.Subit Mathew:
Absolutely, I would say. So all of the above and right. So certainly, telematics or sensors that exists within warehouses, sensors that fit on pallets, products, trucks, all of the above to mu Tom, maybe the other thing is that gold chain is just an application of a of a sensor enabled construct. Right. And so you can extend this construct to beyond just cold chain transportation. So let me use an example. Right? Sure. Imagine being able to collect this data over a period of time. And it gives you some unique insights and KPIs. Are there specific trucks in your fleet that seem to hit problems more often than not? Are there specific products in your portfolio that seem to have an issue more often than not? Because that might imply that maybe the packaging of that product needs to be re evaluated from a design standpoint, right? Maybe the fleet needs to be maintained, or maybe you need to change how you approach some of your maintenance schedules. So it's really the expansion of that sensor driven ecosystem construct that that that really is the is the foundation of thinking, I'mTom Raftery:
okay, there is a real burning platform for this now in pharmaceutical, and more so than many of the other potential industries that it can be used in. So I can see that driving huge adoption there, potentially. But what about the other industries? You mentioned? there? Isn't that much of a burning platform there? So are they likely to take it up? Have they taken it up? Will they take it up? What do you think what's adoption like there are likely to be like,Subit Mathew:
perfect. So I'd say in the immediate what we see around us, obviously, pharma is a big focus, for obvious reasons. In fact, we are also in talks with SAP but SAP is vaccine collaboration hub, the initiative to see you know, how a tool like this could support that. With a lot of the other industry segments like consumer products, chemicals, it is more of an opportunistic, sort of transformation, be B are in a lot of conversations with clients that are experiencing, you know, inventory leakage and bottom line impacts, right. What we're also seeing is a lot of the habits that our society has developed over the COVID period are likely here to stay, for example, direct to consumer sitting at home and ordering product and having it show up at my doorstep, it slowly began to become more common than Not right. And that's then driving the need even in consumer products to start considering things like this for that traceability, right. So more opportunistic in other sectors, obviously, pharma, there's an immediate need that, that needs to be adapted.Tom Raftery:
Okay? And what about, you know, moving forward? Where, where is this going? We see where we are right now. But, you know, talk to me about, you know, three, five years time, where will this be?Subit Mathew:
So, then I look out at the next, you know, three to five years over the chain, or what we just talked about, it is probably one amongst a portfolio of business issues that organizations are trying to solve, right. So we actually see this and some of the other kind of apps that are out there as really just the start of a portfolio of applications that drive beyond the ER p core, right? So when you look at other sort of issues, such as, you know, smart warehouse capabilities, smart factory capabilities, or you know, intelligent maintenance, predictive maintenance, etc, we really see this entire ecosystem of, you know, SAP capabilities, such as the cloud platform, in and around the SRP core just continuing to evolve, right, and I think, specific the goal chain, you know, as we as we go out bed more, I can see us continue to add a lot of capabilities into it. But But really, I think it's leveraging that ecosystem to solve more use cases.Tom Raftery:
Okay, and are there you know, barriers to adoption to these kind of technologies and organizations? Are they clamoring for it?Subit Mathew:
Ah, I think there are perceived barriers, as opposed to actual barriers. And, and, and what, I'll explain what I mean by that. So I think traditionally, a lot of organizations out there have been very kind of focused within what they can influence within their supply chains, right? When you look at capabilities like this, there's often this perceived impression of, or that requires me to invest in a lot of hardware to enable this kind of information. audit requires me to go back and fundamentally change how I do some of my logistics processes. And the reality is that, you know, actually not the case, right? Because there are, there are ways in which you can quickly deploy this kind of technology at fairly optimal costs. And without massive disruptions in your supply chain, these can be incremental step changes, and therefore allow you to get to some of the early value as opposed to a full sort of, you know, reformat of your supply chain. And that's why I say this perceived barriers versus actual values in production.Tom Raftery:
Okay. We are coming towards the end of the podcast notice, is there anything that I haven't asked you that you kind of wish I had any topics that we've not discussed that you think it's important for people to be aware of?Subit Mathew:
I'm going to put my philosophical hat on for a second, so humour me. Specific to cold chain, we obviously you know, there's a lot of materials and things like that, that we can share that go into the details. But to me, what is really exciting is the potential these kinds of technologies have to really change how supply chain operates. Right. And it's, it's that I think, more than anything else drives us and I'm sure drives thinking and at a lot of our client organizations. So I guess I guess that's the promise, if I may I'll take my philosophical hat off.Tom Raftery:
Okay. Okay. Okay. Subit if people want to know more about yourself or Deloitte, or any of the cold chain things we've talked about today, where would you have me direct them?Subit Mathew:
Absolutely. So certainly, you know, going out to deloitte.com. On there's an entire section that talks about SAP supply chain management, some of our innovations. Certainly, that's an avenue for a lot of info, and then you have my contact information. So certainly happy to, you know, chat more questions.Tom Raftery:
Okay. Can you send me a link to that section of the Deloitte site, Subit, and I'll include it in the show notes of so for people then to get it that way.Subit Mathew:
Absolutely. Happy to do that. Tom.Tom Raftery:
Fantastic. Great. Subit, that's been great. Thanks a million for coming on the podcast today.Subit Mathew:
Thank you, Tom. Thank you for the opportunity and certainly good to spend some time talking about this. Appreciate it.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 slash digital supply chain or, or simply drop me an email to Tom dot email@example.com. If you'd like to show, please don't forget to subscribe to it and your podcast application of choice to get new episodes as soon as they're 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.