{"id":26492,"date":"2017-11-15T22:57:22","date_gmt":"2017-11-16T03:57:22","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/the-digitization-of-ice-cream\/"},"modified":"2017-11-15T22:57:22","modified_gmt":"2017-11-16T03:57:22","slug":"the-digitization-of-ice-cream","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-digitization-of-ice-cream\/","title":{"rendered":"The Digitization of Ice Cream"},"content":{"rendered":"

Background <\/strong><\/p>\n

There\u2019s nothing better to cool off on a hot summer day than eat a scoop of ice cream. However, this simple pleasure of life is under threat.<\/p>\n

Nestle, one of the world\u2019s largest ice cream manufacturers, faces a serious challenge in Italy. Given the fragmented nature of the retail sector in Italy\u00a0[1], Nestle must manage a network of several warehouses, over 150 trucks, and 100,000 Nestle owned freezers at its retailers. Among several other things, Nestle must ensure that the temperature of its ice cream is maintained at various stages of its supply chain: during production, transportation, and at the retailer. Even small increases in temperature can result in the crystallization of the product, transforming the creamy texture that everyone loves to one that is grainy\u00a0[2]<\/a>. When this happens, Nestle must identify that a temperature fluctuation occurred and replace the ice cream immediately. Failure to do this, could result in a consumer purchasing damaged ice cream. Frequent short-circuiting and consumers leaving freezer doors open contribute to temperature shocks occurring regularly.<\/p>\n

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Sample Cold Chain (Source: Nimble Wireless<\/em>)<\/figcaption><\/figure>\n


\nEnter, digitization\u2026<\/strong><\/p>\n

Nestle plans to install RFID temperature sensors across its cold chain, starting from their production facilities to the freezers at their retailers [3]. These sensors will alert technicians if the temperature were to fall below a threshold, enabling them to resolve the problem before any damage occurs to the ice cream. The move is favorable for both consumers, who are provided with a quality product, and retailers, who don\u2019t have to have to pay expensive premiums for product insurance. Nestle estimates that retailers can also save 5-10% on its electricity consumption by optimizing freezer temperatures [3].<\/p>\n

What now?<\/strong><\/p>\n

Managing over 100,000 retailers is a daunting task for Nestle. Complex route plans have to be created to ensure that each freezer has ample supply. Emergency deliveries have to be made to accommodate an unexpected spike in demand.<\/p>\n

Globally, Nestle has made a push for investing more in digitization of its supply chain. One such area is the installation of devices on the shelf that monitor stock levels by detecting pressure, weight, depth, and various imaging technology\u00a0[4]. The data that\u2019s collected from these devices will be sent to a central server, alerting the Nestle salesperson that a particular store has low stock. This approach has significant benefits and is particularly important for the ice cream segment for the following reasons:<\/p>\n