A new Americold cold storage facility in Western Australia is designed to mitigate food supply risks presented by supply chain disruptions.
Global cold storage specialist Americold is helping increase investment in Australian food and beverage cold storage to help offset supply chain risks posed by unforeseen circumstances.
Richard Winnall, Americold’s President of International, highlighted the risks associated with underinvestment in cold chain storage and the impact that is having on the industry.
“Cold chain storage has been affected in several ways. Notably, consumers are experiencing stock shortages in supermarkets due to reduced inventory across the supply chain,” said Winnall.
“This reduction in capacity means that logistics and planning managers are operating with minimal buffers.
“As a result, any disruption, such as a rail outage or shipping delay, can lead to lost sales at retail stores. This situation poses challenges for both retailers and manufacturers.”
Winnall said key stakeholders within the cold storage sector were aware of the negative impacts being imposed by current cold storage levels and unforeseen disruptions.
“If it’s not a cyber event, it might be a natural disaster,” said Winnall.
“It could be a range of different things, but we still have to try and plan around those disruptions.”
Winnall said it all came back to the need for more investment in the cold storage and cold chain spaces.
“Cold chain storage hasn’t been a compelling enough business case to deploy what is very large amounts of capital,” he said.
“And what customers are prepared to pay at the moment has not been able to substantiate the capital investments into new capacity.”
Winnall highlighted that Americold boasts a customer base in the Australia and New Zealand markets, which recognise the need for further investment in the cold chain industry.
“That results in customers signing on to long-term contracts, us going to our shareholders to raise capital, and then deploying that into the market to get that capacity built up,” he said.
This type of action is what led to the development and construction of the new Americold cold storage facility in Western Australia, a state that routinely suffers food shortages due to unforeseen disruptions in the supply chain.
“We had a small parcel of land in Western Australia that we were able to build on, which allowed us an opportunity to look at ways of maximising storage capacity, and in the most efficient way,” said Winnall.
“Generally, in these cases you look at how automation can help.”
The automation systems Americold ultimately settled on for the facility already had a proven track record to lean on.
“It’s been around for many years, but not necessarily well used inside the cold chain industry,” he said.
“We kept it simple to ensure that it works and that we can reduce the lead time from building it to actually deploying it.”
Winnall said striking the right balance between speed to market and complexity of automation is important for these types of solutions.
The facility was also designed with some of Americold’s biggest customers in mind.
Winnall said Western Australia was chosen because of the disruptions that can take place due to its supply chain placement.
“Western Australia is unique in that it sits at the end of a very long rail line, some 4000km long,” he said.
“And this rail line experiences disruptions constantly, from washouts
to derailments.”
Because of this disruption, Winnall said, it was obvious greater cold storage capacity in Western Australia would be of extra benefit to the area by mitigating stock shortage risks.
“The worst we saw it was when stock availability on the consumer shelves was at something under 50 per cent, which is incredible,” he said.
“So, we’ve built a facility that can protect our customers with storage so they can build as much inventory as they can.”
The facility’s automation allows for the rapid unpacking of goods brought over on the rail line, before being brought in to a 50-metre-high automatic storage system.
“And those systems now hold more inventory than ever before, protecting against those disruptions,” said Winnall.
Then, when an order for that stock is received, an automatic storage and retrieval system is activated.
“That particular solution is designed for sitting at the end of a railway line, and we would perhaps build something different in a different location based on customer needs, but that one is suited perfectly to the location,” said Winnall.
And due to the success of the ‘go live’ of the Western Australia facility, ground was broken in Western Sydney as part of a major expansion for another of Americold’s customers.
“We think that a combination of what we’ve done in Perth and what we’re doing in Sydney, is slightly exceeding market growth. We believe we’re on track with our mission,” said Winnall.
He said the role of digitalisation in cold storage and supply chain could not be understated and was improving all the time.
“We are heavily invested and extremely capable in software deployments across how we run our operations,” he said.
“How we run the warehouses, our people, our productivity, our customer service, our finances, all of the above.”
Winnall said in the modern age, a business couldn’t afford not to leverage every asset available to it.
“Americold, I think, do that exceptionally well,” he said.
“We are protecting inventory accuracy, and we’re protecting our ability to recall products as might
be needed.
“Our customers always know exactly what is occurring inside the Americold supply chain. And digitalisation helps with that.”
Outside of the digital side of things, lies what Winnall calls ‘physical automation’.
“I think you need real experience with your customers and real experience in the markets you participate in to know what problems you’re trying to solve,” he said.
“Thanks to that, we are able to deploy appropriate automation to address land or space constraints, labour costs, or the speed that we require in a facility.
“You have to know exactly what is required. For example, something small like an automated wrapping machine can exceed $400,000.”
Winnall said Artificial Intelligence was another key area where rapid advancement and innovation was taking place, and something Americold
already leverage.
“We are learning how to deploy AI across commercial practices, across our operational practices, and inventory management practices, so that we can continue to improve every day,” he said.
Winnall boiled it down to a simple formula when talking about the current market and Americold’s role within it.
“The pressure on Americold is we must, as a minimum, meet the market growth demand each year,” he said.
Part of this approach lies in Americold’s research and development of staff and solutions.
Winnall highlighted that Americold invest heavily in its team and recognises the importance of a balance between automation and people.
“We’re always increasing our spend on learning and development, there wouldn’t be a week that goes by that we aren’t deploying a frontline leadership training program or an executive leadership training program, because we want to be the best in the industry,” said Winnall.
“Our customers love seeing us invest into our people, because it means that they’re going to get good outcomes
as well.”
Americold is also further increasing investment into sustainability and efficiency.
“Our deployment of solar power has had a massive positive impact, and morally it’s good, for business it’s great,” said Winnall.
“We have exhausted our opportunities in Australia on deploying solar panels across roofs of our facilities, so now we are embarking on using any excess land or land that we have got saved for future expansion.
“The creation of a solar farm at our Laverton, Victoria site, is a classic example of this.”