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Cold Storage Demand is Through the Roof; Seize the Opportunity!

Cold storage is hot property.

All over the world, sales are soaring in online grocery shopping and subscription meal delivery services, with customers looking for more fresh, short-shelf-life products. More and more medicines and pharmaceutical products need to be chilled, too. The trouble is – where do you store it all?

This would be a challenge in normal times, but the global Covid-19 pandemic has made things much more complicated. With international supply chain networks disrupted, companies are moving away from just-in-time inventory systems. They’re rethinking their processes and operations to incorporate specific temperature control and storage needs. And they’re having to do all this at incredible speed.

Cold storage capacity is increasing fast. The market’s set to grow from $90 billion in 2018 to a whopping $218 billion by 2026, but demand is still outpacing supply. Right now, there’s a deficit of around 100 million square feet of cold storage space. Companies that figure out how to provide that space rapidly and reliably will tap into an enormously lucrative opportunity.

What’s causing the supply deficit?

Most existing cold storage facilities are decades old and in desperate need of upgrades to get them fit for purpose. Speculative investment in new builds for cold storage rental is another exciting development. But depending on the size of the project, it could mean a wait of years, rather than months, until facilities are ready to use.

What’s more, these are mechanically driven, complex projects. You need to schedule the whole construction process, from mechanical aspects to plumbing, electrical and ductwork, with incredible precision. If you get it wrong the first time, you’ll have no choice but to rip it out and start again. That includes key steps like pouring concrete – an important insulator that must adhere perfectly to the thermal requirements of the cold storage facility.

Each stage in the project has to fit together perfectly. If your schedule is inflexible or lacks agility, every time there’s a job overrun or you need to switch tasks around, this will send delays down the chain like dominoes. Especially given that, in projects like these, change requests are common.

You could be months into a project when the order comes to alter direction or accommodate a new type of product with different cooling requirements. Keeping track of all the cogs that fit together – which materials you need for when, which tasks have to happen in a set order – is a constant headache.

Tracking a moving target

Unless you have a system in place that lets you respond and adapt swiftly and easily, you’ll struggle to co-ordinate the process. There’s nothing more frustrating than getting a specialist trade contractor in for a critical task, for example, only to be told when they arrive that they can’t perform the work because they’re missing a component or piece of the puzzle that had to be in place before they arrived.

And the pandemic is causing problems here, too.

Supply chain interruptions also affect the construction industry, making it harder to get the materials and equipment you need when you need it. It can be tricky to source contractors or even deploy staff while adapting to fast-changing rules or advice on safe workspaces, ventilation and social distancing. A rush on top-end filters and other clean air equipment means that many items have far longer lead times than usual.

All these hurdles need to be factored into your scheduling and planning. Time is money, after all, both in terms of going over budget if the project drags on and in terms of the income you lose for every day you delay the opening of your cold storage facility. Optimizing your time management, getting the right materials and crews onsite exactly when you need them, can make or break your project.

It’s also critical for the safety of your team, especially in the context of Covid-19. Messing up the schedules could result in more people on site than you need at any one time – and potentially, more people waiting around on site for something to do. Just because your construction project is deemed essential, that’s no reason to take unnecessary risks with things like social distancing and minimizing exposure.

A well-managed, streamlined project means knowing exactly when to bring in each crew, so that they can start work immediately, with all the tools to hand.

Connecting the dots

Do your VDC manager, scheduler and cost engineer – not to mention architects, engineers, contractors and facilities managers – all refer to their own, siloed source of information? Do they each use different systems to handle their workflow?

Are they working from the same models? Or do these have to be translated painstakingly from architect plans to contractor models to individual, hard-copy schedules that each stakeholder works from separately? Do you have to arrange meeting after meeting, just to keep everyone up to speed?

If your team is not in the same information ecosystem, that inserts a lot of wasted time and potential risk into your construction schedule. It’s important to keep your planning and project management as simple, transparent and efficient as you possibly can. And does everyone along the chain have access to the information they need when they need it? Is there a quick, reliable way to view related attributes on models like the cost, time, installation owner and date stamp?

If not, you really must reassess your workflows and the intelligence that feeds into your building model.

Getting the right technology on site

What you really need is a central platform that helps you coordinate every stage of your workflow from one place. A modular system that gives you the ability to see which areas have been completed and which are still underway. What items have been procured. What’s already on the job site. That keeps you updated on budget and cost information, work schedules, the latest 3D models you’re building from, and the downstream workflows you need to consider.

It’s vital that this information is available in real-time, too. Weekly or monthly updates simply won’t cut it; the right people must be able to view the right workflows and building models at the right time. The situation is always changing. The clock is always ticking. Out-of-date information is the enemy of efficiency. And that efficiency is a non-negotiable for any business hoping to make the most of the cold storage opportunity. If you drag your heels, faster-moving competitors may corner the market and you’ll miss out altogether.

Right now, we’re seeing projects that were originally supposed to start eight months down the line rescheduled for completion within twelve. You simply cannot accelerate a project this intricate without complete control of all the moving parts. Without visibility over your supply chain. Especially when your cold storage facility will play such a critical role in the onward supply chain, too.

It’s a tall order, but it’s achievable – with the right technology.

Last year, one of our own customers, a food distribution center, had asked us to help them get a facility ready to supply a major retailer – but then the pandemic hit and they switched to a direct-to-consumer model. They were already halfway through the project, so the change of direction wasn’t just a small change request: it meant a completely different layout in a huge facility, set up for individual order fulfillment. Plus, their customers needed those home deliveries now, while they couldn’t get to stores, so the race was on to adapt to changes on the fly and complete the work without delay. (Thankfully, using our software, they pulled it off.)

Grab the chance before it’s gone

Whether you manage to seize the cold storage opportunity boils down to how quickly you can pivot. Realistically, that’s only possible if you embrace technology that keeps your whole team fully briefed and informed of every development at every step of the way. That gives you the flexibility and agility to handle overruns and change requests, identifying and removing bottlenecks as you go. A platform that, in a nutshell, keeps you on track to deliver cold storage – long before the opportunity goes cold.

Curious to learn more about how Hexagon Smart Build™ Insight could accelerate your project? See how it works.

About the Author

Brian is an experienced corporate marketing, sales, consulting services and engineering professional with more than 39 years working with engineering systems supporting the AEC industry. He has worked on design teams in: wastewater treatment, petrochemical, fossil fuel and nuclear power plant, product design and manufacturing facilities, utilities, biotech, pharmaceutical and government lab facilities and transportation. He is degreed in computer aided drafting and design, graduating Suma Cum Laude from Johnson and Wales University and is also certified in mechanical engineering technology, graduating Suma Cum Laude from Sawyer School.

Profile Photo of Brian Moura