Automated Storage Systems And Cold Chain Distribution: The COVID Effect

When the coronavirus pandemic reached U.S. shores in January 2020 and a large percentage of the country found itself sheltering in place over the subsequent months, consumers rapidly shifted to online shopping. Among the industries most impacted, the food and beverage supply chain struggled to catch up with demand as shoppers dramatically increased their use of e-commerce for grocery delivery or curbside pickup (particularly for frozen foods, as consumers transitioned from dining out to warming up quick, ready-made meals in the microwave). Demand quickly outpaced supply, forcing both retailers and manufacturers to reevaluate their cold storage strategies. At issue, how to ramp up capacity and throughput in a tight labor market while successfully navigating the challenges of operating in a refrigerated or frozen environment. The answer for many is an investment in automated storage and retrieval systems (ASRS).

While some companies previously deferred investing in automation for their cold storage facilities, proven growth over the past year — coupled with anticipated growth from market analysts — is now enabling an easier cost justification. Market Data Forecast, for example, anticipates the global cold storage market to expand from an expected value of $203 billion in 2020 to $293 billion by end of 2025. Further, research from Mercatus and Incisiv anticipates an estimated $250 billion in U.S. online grocery sales by 2025, compared to $54 billion in 2019 as reported by Digital Commerce 360. And, according to Brandessence Market Research, the frozen food market will reach $387 billion by 2025. All signs that an investment in cold storage automation will pay off.

The benefits of ASRS solutions include high density storage that yields space savings; a goods-to-person picking approach that improves labor productivity and eliminates travel and search time; and enhanced sustainability, particularly in harsh environments (such as cold or freezer storage), as personnel no longer need to routinely enter and exit temperature-controlled zones wasting energy. All of these automation advantages can help a cold chain operation better maintain adequate inventory — as well as track it more accurately (with track-and-trace being a key concern for food and beverage) — as the ASRS’ operation is directed by software that seamlessly interfaces with any facility host system, warehouse management system (WMS), warehouse execution system (WES), or enterprise resource planning (ERP) system. This electronic integration ensures both efficient product flow and compliance as items move through the cold chain from manufacturer to consumer.

In a refrigerated or frozen environment, the advantages of an ASRS become even more pronounced. By installing automation in a high-bay cold storage warehouse, an operation can gain high density storage of a diverse array of product sizes and heights while the vertical space is fully utilized for maximum footprint optimization. This reduces the overall space that needs to be kept cold, including the roof area, which often represents the largest area of temperature loss. In addition to minimizing building costs, a more compact freezer footprint also reduces ongoing energy costs. Automation further removes personnel from a harsh, difficult environment where prolonged exposure can be dangerous. Instead, workers can be reallocated to perform more productive tasks elsewhere in the facility.

ASRS for Pharmaceuticals

With the U.S. Food and Drug Administration (FDA) issuing emergency use authorization of two separate COVID-19 vaccines in December 2020 — one developed by pharmaceutical manufacturer Pfizer in partnership with German biotech company BioNTech and a second developed by Moderna — the spotlight shone once again on cold chain.

Moderna’s vaccine must be stored at -4° Fahrenheit (-20° Celsius), allowing it to be held in more standard freezers. That makes it a candidate for automated storage solutions, which typically function in temperatures as low as -22° Fahrenheit (-5.5° Celsius). On the other hand, the Pfizer vaccine must be held at -94° Fahrenheit (-70° Celsius), well below most automation application ranges. (That’s likely one reason why Pfizer invested so much in its own packaging and distribution methodologies for its vaccine.)

While ASRS solutions offer many of the same advantages to pharmaceutical operations that they do for food and beverage handlers, in the case of the COVID-19 vaccines, current demand means they are being distributed directly from the point of manufacture to the point of use — with no intermediate warehousing storage needed at this time. In the future, however, as the coronavirus is brought under control, it is likely that COVID-19 vaccines will be stored alongside many vaccines and medications that require cold or freezer environments, including in pharmaceutical warehouses that utilize ASRS solutions.

Want to learn more about ASRS and its use in cold or frozen storage applications? Consult with the members of MHI’s Automated Storage/Retrieval Systems (ASRS) group for information about potential solutions.