Thomson Reuters Corporation (TRI) Earnings Call Transcript & Summary

[Audio Gap] optimizing cold chain operations to maximize product quality, certainly a very personal topic at the moment and indeed across all supply chains for many years to come, I imagine. My name is Paddy Le Count. I'm the Product Director here at [ Reuters ] events. And today, I'm joined by Tom Plungis, the VP and Chief Procurement Officer from Quest Diagnostics. And Nimish Dixit, the Senior Director of Operations and innovation for FreshDirect; Stein Van Est, the Head of Cold Chain Logistics for Europe from Maersk; and Chris Caulfield, VP of Temptime Operations for Zebra. Gentlemen, thank you all very much for giving us your time today and sharing your thoughts. We really appreciate it. Probably best place to start is we have a quick introduction from yourselves, a little bit about your role in the cold chain ecosystem and a little bit about your companies, too. We'll go around the room. Stein Van Est, why don't we start with yourself.

Yes. Thanks. Thanks so much, buddy, and thanks also for the invite for this webinar. My name is Stein Van Est. I'm the Head of Cold Chain Logistics for Maersk in Europe. And most people probably know Maersk as, let's say, the large ocean carrier. But we're venturing into a lot of logistics and service products around that as well. And we're really transforming our organization into becoming an end-to-end logistics container supplier. And that is what cold chain is also all about for us. So we're very interested to participate in the webinar today. I have a background in cold chain logistics myself as well. So hopefully, I can give some guidance and expertise on the cold chain logistics.

Okay. Chris?

Sure. Thank you, Paddy. Really happy to be part of this. This is a great topic and really critical right now. I'm Chris Caulfield. I'm Vice President of Temptime Operations. Temptime is a wholly owned subsidiary of Zebra Technologies. Temptime has been involved in cold chain, providing cold chain products, both to the life sciences markets but also fresh perishable foods and other spaces for over 30 years. We were acquired by Zebra Technologies in February of 2019. Zebra is a $4.5 billion company with a global presence. People most likely use Zebra products every single day, but don't know it. They're very much deep into scanners, both at the checkout counters of retail stores and health scanners used by both delivery people like DHL, FedEx, UPS and others. Just to name a few. So I'm really happy to be here and happy to talk about both cold chain and logistics and supply chain across the board.

Okay. Nimish, yourself?

Hi. I am Nimish Dixit, Senior Director of Operations Innovation of FreshDirect. My responsibilities are kind of primarily focused on sourcing and kind of helping to bring to the rest of the organization ideas to -- around our last-mile delivery. And so a lot of that has to do with dealing with our fleet. We have an in-house fleet of vehicles. We're an online grocer, primarily focused in New York City and the greater tri-state New York area. We service Philadelphia and Washington, D.C. as well. So East Coast based. We've been in business for about 20 years. So really at the start of the e-commerce process of trying to convince people to buy food, which now I think after the pandemic, it seems pretty matter of fact. And second nature to a lot of folks, but we've had a long history in trying to solve these cold chain issues, more focused on how do we get to an end consumer and the challenges around -- specifically around food and the different issues around that.

Great. And last but not least, Tom yourself.

My name is Tom Plungis. I'm the Vice President and Chief Procurement Officer for Quest. And for many of you, I'm sure, are aware of Quest, but Quest Diagnostics is a diagnostics information company. And based on our extensive diagnostic testing capabilities, we really produce the data that helps people manage their health and can help manage disease care. So when we think about sort of cold chain at Quest, we're really talking about the supplies that we use to conduct the extensive testing that we do. And then really the management of all the specimens that we receive on a daily basis, and we're receiving over 500,000 specimens on average every day. So managing temperature in these different environments is a challenge for us and something that obviously, we care very much about because it has direct relationship to patient care.

Great. Well, thanks all very much for those quick intros. We'll get straight into the panel then. Just after putting a little chat for the audience. Obviously, we want to make it as interactive as possible. So please make sure that you're submitting the questions to the panelists throughout the hour. We won't be waiting to the last 10 minutes to get into those. So as soon as they arrive, we'll try and address them as they're relevant. So to get those sense in. We're also going to be running a few poles. The first one is just going live now and we'll be doing another one in about 20 minutes as well. So get your thoughts and your votes in there, we'll share that with the panelist once that's complete and see what their input on that is as well.

So without further ado, let's get into this then. Chris, I'll come to you first with maybe setting the scene for the discussion we'll be having now. What do you see as some of the key challenges to cold chain consistency across the network? And what steps can be taken to limit the breakdowns and maybe streamline the process? Is that at crucial points that are maybe repeated vendors for where that consistency might break down, let's say?

Sure. When you think about cold chain and cold chain is really a subset of the supply chain. It's a unique way that things are handled, especially temperature-sensitive products as it's moving along. But when you think about the holistic cold chain, you have to start with the place where it begins and then its ultimate destination, and there's great panelists here that are handling those handoffs. And cold chain and like supply chain is a series of handouts that has to be managed from beginning to end. And in the current supply chain, cold chain ecosystem, you have those handoffs and people are responsible when you think about maybe the manufacturer, the processor, the distributor who's taking control and carrying it deeper into the ultimate destination. Each are deploying different mechanisms to make sure that, that product is handled appropriately. In some cases, the manufacturer is providing that guidance from beginning to end. In many cases, they're working with each of their partners to make sure that the temperature requirements are being observed in each of those handoffs. So they can use a variety of electronic data logger systems. They might be using environmental control systems that are based on the carrier. They might be using insulated boxes. In some cases, they may be leaving it to the supplier themselves to figure out how to best do that. So I think holistically, what you have here is a lot of disparate parts coming together to create what's known as the cold chain, but each are taking their segment and bringing it forward in the best manner possible or if they're under an obligation of a quality or supply agreement based on the protocols in those, but each one is taking that. And really, when you think about the end user, which could be in the Maersk case, could be the consumer where the product is arriving at the doorstep, could be a distributor who's taking a life science product forward, they're really counting on everyone upstream to have done their job and perform their job well. And just a last comment. When you think about the public today, cold chain has never been more in the headlines than it is today. Everyone that you know can speak about the fragility of COVID vaccines and the deep cold storage and all that, which I think is great to have those discussions and have it moved maybe from the last page of the newspaper to the front page. So people can understand that there are mechanisms and technologies and methodologies that should be deployed to make this all better.

And Tom, your thoughts on that obviously coming out with patient care at top of mind goes down so that?

Yes. I think building a little bit on what Chris said is it -- there is a beginning to the cold chain. And I think one of the challenges that we see and just give me -- throw some numbers actually, when we're dealing with the diversity of testing that we do, we have obviously suppliers that we rely on heavily, but it requires us to have a diverse supply base. So we normally deal on an annual basis with well over 3,000 suppliers that are providing critical components. But then when we turn around and we go to the patient sample side, on a daily basis, we're doing 80,000 logistic pickups a day. So again, the challenge that's really with that kind of breadth of starting points is really trying to get consistency and having very, very -- we can't always get it as controlled as we want. So we really need to provide the materials that allow people to have standard work. And then our logistics team and then our suppliers, making sure that we're all aligned on the requirements and that communication has to be very, very strong. So there's an education component of it as well, that we really have to embed into both of those supply chains that I'm referencing to make sure that people are trained, that people understand the importance of the specimen and how it's being handled. And it's really something that is -- that we need to invest heavily in, but it's very, very dependent on people and our ability to make sure that they understand their role in the supply chain.

Absolutely. And you mentioned all the myriad starting points there, I suppose, Nimish the myriad ending points and increasing for yourselves as consumers turn their grocery attentions to home delivery. What are some of the key differentiating factors for [ 400 ] that have made that last mile challenge even more difficult for yourself in particular in a pressure act?

Yes. I mean I think the first one is just the economics of it. I think when you -- it's much different when you have to deal with perishable products, even just from a what kind of box or what kind of end delivery device do you use? And therefore, what kind of partners can you use to execute those deliveries, right? And so I think you see a lot of these application of those kinds of things, especially in the food business and then related kind of things, whether it's companies that are trying to do with bulk and send you boxes, where they'll try and time it. They're only going to certain areas in certain days of the week, whether you have insulation in a bag, but then you have an ice pack in there or you have dry ice, and now you have an issue with customers' expectations around what that is. And so you end up finding that it's just a hard challenge and it's a costly challenge to manage. From our standpoint, we've -- from the start, we've decided that we're going to refrigerate our fleet because we view that the amount of packaging that we want to provide to a customer at their doorstep, we want to try and limit as much as we can. There are other issues with food around damage and perishability and all that, that makes that hard. And we also thought that we do really -- we do our kind of kitchen items, meat, seafood really well. And we wanted to have really good transparent conversations with customers that we know exactly how cold our trucks were, all the way up to your doorstep, as well as a big value proposition for us, and it continues to be. And so I think from our standpoint, it's been -- that's been really important to be able to connect that part of the supply chain to the customer experience and then be able to stand back from it. So when you have an issue that people say, hey, this didn't look like it held. Just the quality was adulterated here. We can really track that back and be able to investigate that with our own data and be able to kind of go back to customers with confidence and tell them that we have identified an issue specific to you, not generally, but specific to you. And we have an answer that really makes sense. That's really important in our business because for a lot of the end customer businesses, your options are endless. And so you only have one chance to get it right. It's not these kind of contracted, long-term contracts with supply chain relationships where you're going to go under an SLA and okay, we'll try harder next month. You really don't have those options from a consumer business standpoint.

And Stein, we come to you now for this next question for opening up to the rest of the panel. Given this need for consistency and in particular, data capture to be as specific as possible. We've obviously alluded to technologies, devices, human processes. What have you seen have the most success across that spectrum in terms of delivering a consistent temperature or condition controlled network? And how do you see those processes being taken forward and increasing over the next, say, 12 to 18 months?

Sure. Yes. So I think -- I mean, actually, Nimish's point is very interesting because this is what is the final consumers' expectation of the quality of the products that they purchase from him or from other retailers. And I think from a mass perspective, we're obviously a little bit further down the supply chain or further back into the supply chain. And that's also why we are really considering this end-to-end cold chain logistics supply chain to have sort of an unbroken cold chain aspect to it. So you could imagine that, for example, fresh fruit or vegetables are actually grown in one part of the world. And from there they are being transported all the way to consumers sitting in New York or in Europe, for example. And as soon as the product actually gets harvested, the deterioration process of the product or the perishable of the fruit and vegetable actually starts. And so that means that between that point in time, when it's being harvested and the final consumer actually having the product on its plate, you need to ensure that through an unbroken cold chain, you slow down or actually stop the deterioration process. And you should keep in mind that actually 30% of food is wasted in our supply chain before it actually reaches the consumer at the final destination. And that is to a certain extent, because of the, let's say, the inaccuracies that we have all throughout the supply chain, in particular, in cold chain logistics. So what we're trying to aim for is to really have an unbroken cold chain. And I think Chris already alluded to it that there's a lot of handover points. And with all those handover points, there's obviously a lot of, let's say, data that you can capture from what goes wrong, what goes right. And I think, of course, for us, from an ocean carriers perspective, one of the biggest technologies that we have obviously introduced decades ago is already the refrigerated container. Because this has really enabled fresh produce to be transported globally. On top of that, I think there's a lot of measurements that are now being put in place to control the transports during its voyage. So we have remote container management. We call it Captain Peter. After one of our actual captains that has been part of the project group to do this. But it's a device that is continuously controlling the temperature inside a container, but not just temperature but also oxygen level, humidity levels and these kind of things. To really -- due to the specifications of the particular product to really have the right sort of settings to enable the quality to be as consistent as possible before it actually reaches a fulfillment center or eventually the final consumer. So there's a lot of technology around it and a lot of data capturing. And there's, of course, a lot of opportunities there still to improve on that.

Yes, Paddy, maybe I can jump in the talk because Stein and Nimish have kind of spurred a couple of thoughts. And one is the variety of technology options. And those come from the most expensive, most robust, most comprehensive to something that may be less expensive, certainly reliable, but aimed at kind of an out and never coming back. So when you think about different temperature monitoring devices or humidity monitoring devices, there's a whole variety of cost and expense associated with that. And when you layer that into brand protection in the case of Maersk, they want to make sure that, that person orders again and again, and again and that they need to create that user experience. And some of those things that we do here at Temptime and Zebra around the user experience, whether that would be a health care professional administering a vaccine somewhere or a person receiving a product delivered directly to their home. But when they arrive home, it's been sitting on the the front steps for some time. Do they have the ability to engage in that user experience to make sure that whatever is inside that insulated container is suitable for their use. And if it's not, how do they begin to have that discussion with the organization that brought it there or the brand. And oftentimes, you have couriers and other services that are moving material, but the end user will leapfrog past them and go right back to the manufacturer or the brand to engage in that. So there's so many different layers of technology being deployed across the cold chain environment and Stein even hit on it. Once we just -- let's make sure everything is kept cold or not frozen or doesn't get overheated. But now it's -- what's the humidity? Is there upset? Where is it? GPS and other coordinates, where is it? And now in the age of certainly here in the U.S. with Amazon, it's not only where is it, but when is it going to get here? And when can I expect it? So the expectations around cold chain and everything that goes along with it, creates this desire for the -- for both the brand owner, but also the person receiving it to have data and information so that they can be informed and make some decisions.

Yes. And actually, maybe to just add to that. I think because on the one end, you can look at it from a negative aspect, right? Because then there is somebody to blame for it going wrong. But I think it's actually -- I would also look -- try to look at it from a positive aspect because I think there's -- because there are so many handover points, there's also a lot of opportunities for ultra decision-making. And that is particularly true on cold chain logistics. So I think with every handover point, you can decide to, for example, speed up the supply chain, slower down blast freeze the product because it's not the right temperature setting. So there's a lot of things that you can actually do to reimprove the product and actually improve the quality back to its original level. So I think that's also -- I would also look at it from a positive aspect there to say, okay, what can we actually do to really have the best quality product eventually available for our final consumer.

I think increased accountability is a state of mind. If you've done something wrong, it's going to be a negative. If you haven't, you've seen it as positive then it is positive. Tom, from your side, obviously, Stein, you mentioned that stat of 30% of food gets wasted in the process. Not really a statistic that anyone is shooting for, but certainly in health care and the widest in the diagnostic space, that's not really acceptable. How does this sort of translate to your industry?

So if we think about the fact that and I'm going to -- I'll use the simpler one, which is the specimen management and every specimen, there's a life that's attached to that specimen. So if there's a failure in the analogy that you brought up in terms of the wastage in the supply chain. If there's a failure in that specimen it isn't handled properly, then you're going to have the inability to test that. And then there's the issue of going back to the person, is that sample re-collectible? Or is it an irreplaceable specimen that came out of a procedure? So the stakes are very high. The reputation risk is very high. And so therefore, really -- I appreciate you guys bringing up the handoffs because that's really the focus. How can you embed mistake proofing into your processes to make sure that you don't have these events? And then the other thing is, how can we leverage the information that's available from really a network of partners because in the industry that I participate in, it's unlikely that you're going to have one logistics provider that's going to be able to meet all your needs across the spectrum. So for us to be able to do what we do, we have our own fleet of aircraft. But then again, we still use partners like FedEx. We also use commercial airlines because it's just not possible for -- from an economics perspective to be able to serve the whole country with our own fleet. So these are handoffs that we have to make from the doctor's office to our courier network, to our labs back potentially to another courier and then into an aircraft. So we really have to make sure that we have processes that allow us to be successful as handoffs and be able to see where it is. I think our concern because we do things around packaging is when we're likely to see a -- whether it's a reagent shipment or it's a specimen being moved, where we're likely to see it impaired and it's going to sit? How can we see that? And I think one of our big challenges is how come everybody is doing a really good job, and I -- Stein, I would bet you guys are investing a lot in your IT for people to be able to interact with where their products are. But if we're using multiple suppliers, how do we deal with everybody's system where we don't have to live in everybody's different system where we can see it and bring it all into ours. So I think there's a lot of challenges around interoperability of dealing with multiple suppliers and how can we bring it together so that we can have the end-to-end view. And we can engage when we see potentially weather and something is going to sit, can we engage? Can we intervene there and save that product, save that specimen, that's really what we really are trying to focus on. And I think Chris's technology, there's a lot of technology. At scale, it works very -- it seems to work very well with what I'll call a higher unit price product where you can -- that works very well. The question for us is at a tube level, can we get it when we're having, let's say, 1 million tubes a day coming in, can we really get it to be really cost-effective and give us even more advantage. So there's a lot of work going on to how to take advantage of that so that you can have positive tracking everywhere through your system until the result is done.

Just sharing now. I think everyone can see this. Nod if you can or you can't, but the results from the first poll that we do from here. Echoing what we've mentioned here, the top challenge that people are looking to correct is there's consistency across the entire team network on the consistency of the quality. Obviously, trying to call with Nimish, your points about your own particular fleets to maintain that quality on your own level the best on having partners in this particular area. Following on from these statistics, though, there's a question coming in from the audience around the supply chain [ planning Maersk ] are rather being [indiscernible] supply chain, kind of given the current levels of volatility across every industry, really. Specifically, both for here, how does demand fluctuate? How do demand fluctuations in volatility really have an effect on cold chain planning, in particular, as opposed to just wider supply chain issues in which there are myriad, and we can certainly fill the last half hour, we're talking about those. But specifically to the cold chain, Nimish, if you come to yourself, fluctuations in demand, what's the impact fit that you're seeing there to your operations?

Yes. Fluctuations in demand, we've been there intraday for us and intraweek. And then even now, right, it's getting a little warmer out today. And so we have that. I think for us, it's about making sure that we have good analytics about what do we think is going to happen. And then we have an integrated business process to adapt to that so that we don't compromise on any one part. So for us, culturally as a group, we have every stakeholder in the company in a daily meeting in the -- every morning I'm going through top line business to bottom line issues in the facility, anywhere from the marketing team members that might be sending out e-mails to consumers from an e-commerce standpoint to the warehouse operations leaders reporting back on specific issues that are happening in parts of the network. And part of that culturally for us is that the problem and the solutions around this don't come from any one place and it's not anyone's problem to solve it when you have that much of an impact on that. So if we are looking like demand is might be coming soft because it's 65 degrees in the tri-state area, and we're long on strawberries, and they're going to go along. Potentially, that's the right product to put on to our customers and say, get it right now versus what the plan was that we were going to do that with something else, right? And the nimbleness and the flexibility of our organization to really take advantage of that and to be really respectful to customers so that we don't do that, right? Look, we -- that's actually it's going to -- that's going to taste great right now and get it right now. Obviously, aligning those interests, makes sense. We would never kind of promote a piece of quality product that's going out the door poorly. We will always make the decision. This is just us. We'll always throw it out rather than sending it to you. The cost for us in those scenarios where we have misses on our supply planning. Always, the economics for us always is that is infinitely more costly to make the bad short-term decision to just try and cut a corner or maybe someone won't notice infinitely, our customers notice. As our customers come to us because they trust us for their quality and they know that they're going to get their money back if they don't, right? We have a 100% satisfaction guarantee, but we don't see our food. So if you tell me that the apple was bruised. Okay, you're going to get money for the apple back. Even if I tell you, any from my warehouse people tell you, but we put in the clamshell, there's no way that, that would have happened, but they don't touch each other, customer setting. And so we really put our -- we put our reputation behind it in many different ways, and we find that that helps align the rest of the company because it's not -- it's like -- it really makes it really simple to say, this is just what the focus is. This is how we do business. And so I think we're fortunate that, that's kind of culturally what we do with quality and how we approach it. But that makes some of those decisions better. But that's how you have to handle demand is you have to be all willing to do it. And so therefore, when the decision needs to be made immediately, there's no questioning at a senior level of like, but. There's no buts in -- the buts will slow it down, you lose a day, and all of a sudden, you've lost perishable products.

That's -- maybe if I could just jump in. Temptime is both a user and a participant in the cold chain. So we have some products that are shipped under frozen conditions, similar to the Pfizer COVID-19 vaccine. We have others that are shipped refrigerated, and we're also participating in the cold chain and supply chain. So the question around how are we navigating some of this? When COVID first broke a year ago and you start getting into Q2 of 2020, the idea around air shipments and moving material from -- we're a global supplier. We're delivering on every continent other than Antarctica in the world. And there were some places that simply were locked down and you couldn't move there. So that's where you go back into the people like Stein and your supply chain partners and say, okay, we need some alternatives here. We need to get our product into -- in these specific geographical regions, and we need to find ways to get it there. In our case, it's a direct shipment in almost every scenario. So to Nimish's point, and he's a little bit more regional. We're global, but it's the same intent. We need to get our perishable material to the ultimate destination as quickly as possible under the best conditions as possible. So there -- you need to have great relationships with your -- the people moving the material for you and also kind of have a plan B, C and D to figure out how to get it there and that's been very critical for our core business. Because we are delivering more than 600 million of our little time temperature indicators, our vaccine bio monitors globally to key vaccine manufacturers and it's a critical component. And oftentimes, we're the last people to find out that they need X number in 2 weeks. So it is critical to have those relationships.

I'd like to bring this forward, but also referencing back to what you mentioned, Tom, actually, as everyone has alluded to in terms of the importance of leveraging real-time data for this end-to-end visibility. Again, myriad challenges to this, not least of which we have multiple partners in the chain and we have lots of different systems. And the [ inability ] of this data is obviously key. Rather than us focusing on the challenges. And again, because we've been here for a while. And Stein, if we come to you first. What are you seeing is maybe the -- what companies can do to or the steps they can take to effectively leverage this data visibility across the entirety of the cold chain operations and the extended supply chain to just keep driving on this journey towards end-to-end visibility, which is something that everyone wants, I'm not sure if it's entirely possible. There'll always be something else to see, but we're certainly on a journey towards it. So where are you seeing the most successes in bringing those systems together?

Yes. I think following on what Thomas already explained, I think what we see now is that there's a lot of data capturing going on all over the place. And most supply chains are highly complex, and there's a lot of different suppliers involved in it. And actually, what we now see, and that is also really much the strategy that we are on as a company ourselves is to make it as easy as possible for our customers to have a single point of contact in our organization. And we are then creating and building a platform above, let's say, all of the carriers and supply chain partners to really have sort of a single source of route and a single point of view for our customers. And we do that through, let's say, our cold chain solutions and cold chain management setups where we actually built control towers for us to manage those supply chains on behalf of our customers. And I think we've actually come quite far, not only us but the industry in general and actually capturing that data, even though it comes from all kinds of different systems. And together with IBM, we've actually developed a system called TradeLens, which is based on blockchain technology, where we're really capturing, I think, it's more than 150 data points already now of a global supply chain. And it's not only Maersk but a lot of ocean carriers have actually signed up and they're supplying all of the data into sort of a common platform. And this is also what I mentioned before, it's not necessarily about claiming and blaming the other party for something that went wrong, but it's also to really be able on a sort of a neutral basis, understand what's going on in the supply chain to alter your decision making to speed it up, to slow it down to deviate. And I think one of the things that we are experiencing actually this week with the Suez Canal being blocked by a large container vessel. There's obviously a large queue of container vessels on both sides, waiting to go through. And this will disrupt basically the global supply chain for the next couple of weeks. But if you have the right set of data and you actually know what kind of containers are on board the vessel when they will be discharged, you can actually make decisions in your supply chain to prioritize some of the goods that maybe have a higher priority than some of the other containers that are on board a vessel. So I think it's really about capturing all of that data into a single platform, and that obviously should be a neutral platform. And through that, actually allowing your customers either to have a sort of a supply chain manager or a management control tower to make decisions on your behalf. And I think that we are still on a verge of a huge opportunity here to bring all of that data together and to really make efficiencies into the supply chain, and that is not necessarily always speed, but it's really to build more reliable and resilient supply chains.

Do you think the -- sorry, Tom you can go ahead.

I was just going to side with Stein, I mean that was something that from my perspective would be that kind of additional visibility would be really useful. I mean, if we think about the pandemic and the amount of disruption that we all experienced, I can't tell you the number of decisions that were made over the last year as to whether we should allow a shipment to go a normal path or we should be -- or we're going to incur the incredible premiums that we were seeing in the industry to put it on a plane and fly it. So having better decision tools like that to make those kinds of economic decisions versus just saying, hey, you know what? We really need to make this decision because the risk is too great, but you don't have imperfect data. I mean certainly having -- being able to make that decision based on the fact that there's a backup because of the Suez Canal and knowing where your product is and being able to make those kinds of good judgments really easily would be something that would be very, very useful from a planning perspective, if nothing else.

Pretty much to that point, what I was going to ask.

Sorry about that.

Do we think that the last 12 months and the amount of risk and payment that's been incurred across supply chains, has maybe expedited that conversation for these sort of data ledgers that are -- they're not owned by any one in particular, and they're open for people to use, people to see. So it's something called [indiscernible]. But we've definitely seen lots of different industries, take to that kind of thing differently and different challenges, et cetera, but maybe just the impact on everyone in the last year, create a bit more of a driver towards that as an end goal.

And maybe a quick answer from my side on that. I think what we see globally with all of our customers, I think the last decade or so, supply chains were really about driving efficiency by keeping low inventory levels. And all of us globally have felt the outcome of that, let's say, a year ago. And I think that there is now a -- we definitely see a shift in sort of a mindset shift there to look at supply chains all over again and to say, is a low level of inventory, actually, let's say, our desirable outcome. And maybe we should really rethink the inventory level. And I think if you tie that into the visibility of your inventory, it doesn't necessarily have to be that it's a low level of inventory, you just need to make sure that it's visible and that you know where it is, because then you can really make proper decisions on it.

Yes, Stein, I would echo that. It's not always about having a maximum inventory at every distribution center, it's knowing that you need to move something into a specific area because there's information suggests there's going to be a surge or otherwise. Paddy, to your question, certainly, in Nimish's industry, e-commerce, direct-to-home delivery, I'm sure that's been fantastic for them in the last year. I think we're seeing a shift in the paradigm, whether that's Nimish or Thomas, I'm sure Thomas has heard like I can't get my testing results back fast enough, it needs to be faster. I mean, everything today is faster, instant, better. I need to have at my house in 2 hours. And all of that is kind of a consumer want, if you will. But to the point of technology information and making good decisions, that can only be accomplished if you have a line of sight into where those materials are? Can we service that business? Can we get it there? And do we have enough data and information to actually holistically execute on our promise? And I think that's where the crosshairs of data, information, inventory and the ability to execute really come altogether right there. And I think you see, not just here in the U.S., but globally, the idea mentality of I need more, I need to access more quickly, I need information more handily, why can't I have it on my phone? Why do I have to do this? So I think we're really at a very interesting point created by the pandemic. And now because it's gone on for so long, people's expectations are certainly raised and how they will get consumable products, I think, has been changed for a long period of time.

Yes. I'll jump on that. Just as another thought at the end of that is then what do you do with the data, right? So I think it's great, but I think there's a consequence to having the data. And so you as an organization, need to really have good processes because at the end of the day, a person is going to have to make a decision with the data and that's going to have a financial consequence for you as an organization. And so whether that's a person on a receiving dock that takes a tracker trailer load and says, listen, the system is telling me that your truck stopped and this truck stopped and it went out of temp. And I know that you say it's in temporary now, but for an hour, it was not, like do you give that guy pass or not? And that's a guy on the floor that's making a decision. And I think, like, you have to make sure that just because you have the data, it doesn't mean that you've empowered the business process to work. And people might not like the answer of what the results of that business process is, especially in the short-term when you're trying to ramp up implementing that. And people are going to be really nervous because those are decisions that are pretty much empowering levels of your organization that might not normally be empowered to make those types of decisions. And that's really, I think, a challenge that everyone has. So what we've tried to do at least from our end, where we have scope of control is put in the right -- expose the right data points that are -- so that people are making only the decision that they should be making with the data that they're given, right? And so our delivery truck has temperature monitoring. We see that it goes from 37 to 41 for an alert. Well, make a phone call, ask the driver, is anything happening? Happen? Check, right? And then basically, that gets escalated to a manager at that point in time after we get an answer, if that answer doesn't make any sense and our response there really ends with one way. It's -- we need to go get another truck out and we need to swap it on the road, find another one, right? And so that's kind of that. And I think you have to really look at these binary choices that the people that are consuming your data. One is, what's the right level of information that the person is consuming? What the supply planner needs that's managing our logistics organization is great if they have the centralized view that Maresk is going to give but then how are they communicating that to the end consumer in the distribution centers receiving dock about, hey, this container is going to show up at your door, and we think there might be a problem with it. Here's what you need to do to check. And then are they actually willing to deal with the truck or trailer driver that now has to deal with a load that they've kept and what are they going to get rid of it, right? Like these are actually consequences to these issues, especially with cold chain that are much different than than other things, other normal processes with just general merchandise goods.

I think that's a very key point. And my question off the back of this, this need for flexibility we've been talking about customer demands, flexibility that better words of the supply chain recently. Is there a limitation to the flexibility we can actually provide in when we're talking about cold chain, for instance, as opposed to apparel retail, I want it tomorrow, [indiscernible] can turn up. Okay, the next day is all right. That's not the same game that's been played when we're talking about pharmaceuticals or diagnostics or food. Is there a limit to what -- when all this decision-making has to happen, volume of data, the impact, let's say, of consequences. Do you guys think that there is a limit on how flexible the cold chain elements of the supply chain could end up being?

Yes. I can jump in on my perspective. There's a question in the chat, I think, on couriers and stuff like that. I think it manifests itself in last mile really clearly, right? You have choices as a company about the parameters on how you run your logistics operation. And then you have choices on whether you want to violate them or not, right? So if you only have 4 couriers show up and you want a courier based on demand business and you took 10 orders, but your parameters say the guys should only take 2 orders at a time, right? What do you do with those last 2 orders? Are you going to not send them out on the road? Or are you going to let the guy drive an extra half hour each and potentially the frozen items might get a little bit soft? And would you just hope that someone knows and notice that the ice cream is a little bit melty because they didn't? Or are you going to tell them about it, right? And so for us, there's a lot of capacity issues on the last mile that we put into place ahead of time to try and protect those decisions because we don't feel that the operator's day to day are the right -- it's not their responsibility to make some of those types of decisions. We try and make sure that our systems can handle those types of decisions to put the quality in place upfront and then try and kind of filter down the decision that they can make because an operator is going to try and get the job done. 100% of the time, they're going to bend over backwards to try and get the job done. That's their job and logistics and operations is to go make it happen. That's actually what you hire for, right? You hire for the people that can actually solve the problem. That might not be what you want from a quality perspective. And I think we tend to try and make sure that our systems protect the process end-to-end and then we liberate the employees to be able to make decisions within the construct of those frameworks that we've set up with. And for us, that's hard. We have to fully load trucks, right? If we want to rent trucks because we have a spike in demand in COVID. Guess what, we can't rent a box truck without refrigeration, right? And guess what, we found out in the summer with dry ice shortages that ice packs don't work necessarily as well as dry ice does for our frozen items, and our customers noticed, and they told us about it. So there are real consequences to some of these issues for us, and that's kind of our personal story.

Yes. Nimish, the last mile kind of operationally empowering people to make decisions in the last mile, it is something that we've participated in for a long time. We work pretty closely with the large global immunization campaigns and they're literally using some of our technologies to empower the health care professional at the injection site to make a decision as to whether that vaccine should be used or not. And you're talking about programmatic authority being given down to the last mile to the last person touching that asset in making those decisions. And it's not comfortable, it's not something that's decided overnight because that's what the trend is. That's -- those are very intentional decisions and very intentional authority levels provided to those people because like your situation, if the health care professional decides that, that vaccine has been overheated because of what they see on a technology, that means waste is going to be incurred. And at the highest level, people don't like that, but that's probably the right decision. The same thing, like you said, if you have a 10 dose vile and then only 3 people show up, what do you do? Do you vaccinate or do you not? So all of those are kind of the decisions in the background that really need to be ironed out as you leverage and use this data information to empower the people that are touching that asset at the last point, very important.

Stein, yourself any thoughts on that?

Yes. I think -- I mean, the last mile delivery is obviously -- I mean, Nimish is working on this day-to-day. I think if we look at our retail customers, there's -- it's really a hard nut to crack because the economics of it are simply not there yet. And I think the effect of the pandemic has actually seen a huge surge in online grocery shopping. And I think that in most countries, we now see that we're probably at the proper threshold where we can actually see that it becomes financially attractive as well. And I would say that there's -- you're obviously using refrigerated trucking, and you already explained a little bit on the, let's say, the advantages and disadvantages to it. I think there's other retailers that are using isolated boxes and then they have dry ice or ice packs in it. There's some advantages and disadvantages to it as well. I mean you stick the ice pack in there, and then it's probably too cold and when it reaches the final consumer, it's probably too warm already. And then every single product in a grocery store is obviously requiring a slightly different temperature setting as well. And then you have some retailers that are actually doing the fulfillment in the traditional supermarket. And then they're a little bit closer to the final consumer, and the delivery time is obviously a little bit shorter and perhaps you have some fewer risks on the actual temperature settings there. So I don't think that anyone has really found the true answer to it yet. And for me, I would say that it's also a matter of trying to see sort of -- trying to achieve economies of skill and synergies by actually cooperating on the final last mile delivery. And of course, it's what you now see in a lot of large cities as well because -- I mean, the large cities are completely crammed with all delivery vans, making the last mile delivery, right? So there needs to be some sort of a more organized thinking around how do we actually make this last mile delivery coordinated, particularly also for cold chain and logistics, you also ensure that we have the temperature setting right when it actually reaches the final consumer.

We're getting to the last sort of 5, 10 minutes of this discussion now. So I think by way of sort of a last question to kick off the discussion. We've talked about a number of different elements here, the growth of e-commerce and these demands that have come in. But a core theme throughout all of it and at any stage of the cold chain as well, is this consistency going back to what the audience picture said that top challenge and the same for yourselves. If we start with yourself, Tom, maybe go around the panel, what would be the key [ notes ] that you see for the next maybe 12 to 18 months that you're going to be focusing on to improve the consistency across your network? What steps can be taken to move forward? We talked about the cost of the cold chain, the decisions being made? Is it better to lose out here to win in the long term? There's lots of variables. What are kind of the key messages you would send out to the audience now and then send into your own businesses in terms of that consistency?

So I would start with -- I think there's certainly a recognition that the pandemic has been incredibly disruptive to the diagnostics industry in many different ways. And so the need for more focus on supply chain and the need for better visibility is recognized? And where that comes in is willingness to do when you're making decisions on IT investments inside of companies. I think it raises up the willingness to make the right investments. So really, the focus for one of the areas for us is the right investments to make that are going to have -- they're going to increase that visibility. Outside of cold chain, I see a question that's up on the board about distribution centers and where material is. I can't -- we talked about the pandemic, but you look at the weather in February and how disruptive that was in the United States. It was really incredible. And so I think from our perspective is, do we have the right products in the right spots? Is there other things that we should be doing to reduce the risk there, if we're going to see weather events continue to be maybe at the higher end of the impact than we have historically? So they're combined with the concept of the cold chain, but I think they're a little bit more fundamental thoughts that we need to have, and they will have implications for cold chain. So I'll stop there.

Chris, why don't we come to yourself next, with your thoughts?

Yes. I think Thomas makes a great point about investments and where those investments are going to be and what those investment types should be. But it really comes back to strategy and what the strategic vision of the company is. It's easy to say we want X, Y or Z because I read that in a trade journal, and that makes sense but really what makes sense for your business. And I think Nimish, in his organization has made very intentional investments and decisions based on where they see their business and how they're servicing their business. That being said, and in violent agreement, there isn't a single solution for everyone. And I think sometimes people want to just layer out here's solution A, and we're just going to roll this out to an industry or with a cold chain market, and this is the solution. I think what we've heard today and what's been underlined is each industry and even each company inside in a similar industry, all operate in different manners, and they all operate with different end games or end users or touch points. And I think as a cold chain provider and an organization that's involved with providing people who touch the asset at the very last spot, I think that's helpful information. We need to be flexible enough in the technologies and the platforms that we're putting out there that we can be making them suitable for our target customers and making sure that those solutions are able to be modified in such a way that the value that our customers are paying for is being seen and being realized. Because at the end of the day, it's all about value, return on investment, whether or not we're helping our customers make better decisions and actually be more profitable in what they do.

Nimish, will continue. Next for you.

I've forgotten the question. Can you repeat it?

It's about...

I was going to take a stab at answering it.

It's just going us back to this, this idea of the consistency, the elements that are a key focus for you to keep driving towards that across your partners, your suppliers and obviously, your own operations for the next 12 to 18 months?

Yes. I think it's about just -- I think that -- I don't think there's -- I think everything you've heard is like it's still -- there's no right answer. And I think for us, it's really just about keeping the focus about innovating. And we're looking for technologies that work that try and break our model and we can put it together again differently. And we found a couple of things that are almost there. But probably just not over the hurdle. And so like just keep pushing and pushing people that are interested to solve problems with us in these spaces, knowing where we're going and finding the right partners that are going to be able to help be creative around these solutions. I think we know that things are evolving. We know that they are -- we also know that in different parts of the world, there's solutions that are probably out there that just haven't come to market where we're sitting. And just trying to make sure that we keep our ears to the ground and trying to see if we can steal from here and there to try and bring together a solution that works for us. We have a harder nut. It's a low-margin business. There's a couple of challenges there with that. And so I think from our standpoint, it's just keeping the ear on the ground and making sure that we're keeping an eye out to the future while trying to still take care of the customers today. Because this stuff has just changed dramatically and people's aptitude to want to solve it from a supplier standpoint and a solution standpoint has really accelerated over the last 4, 5 years. And so I'm really hopeful that some of these things can start to get tackled in really novel ways across the board for all of us shortly.

And Stein, the final thought for yourself that demonstrate...

Yes. I think it very much ties in with the things that we've actually been discussing in the last hour, I think, if we look at -- I mean, visibility is obviously a key word here. And if I look at what we are now, let's say, putting our investments in, is also really digitizing what is a very traditional and old-fashioned industry, global shipping, so to say. And I think it's really about creating the visibility for ourselves and also for our customers. And we are then building products around it that we can then offer for our customers if they do not have the resources themselves to really make the decisions that we've also been talking about. But I think the first step is really to make use of the data that we have already discussed and that we all of us are on a large-scale capturing and then building the processes that Nimish already mentioned around it from a human perspective, to build the processes around it, who can make what kind of decisions and how do we embed that into our systems. So I think it's actually bringing a lot of the things that we now discuss together into sort of a platform or technology and actually enable, let's say, everyone that is involved in the supply chain to then make decisions. So I think that, that is also where our focus is on the next 12 to 18 months.

Gentlemen, thank you so much for your insights today. We just got to the top of the hour. So I think we'll call it there, but yes, a massive thank you from myself and I'm sure from the audiences as well. To the audience, thank you all very much for joining us on this session [indiscernible] events in partnership with Zebra. We'll hope to see you very soon on the next one, but until then stay safe. There I say stay cool, and we'll see you later. Have a good day.

All right. Thank you.

Thanks. Bye-bye.