Thirty years ago, before ecommerce existed, if you decided to buy something you saw advertised on television, you’d quickly write down the number to call, give your information to the operators on the phone, and four to six weeks later–after you’d forgotten all about it–the product you’d ordered would arrive. Today, to get the same product, you go online, scroll through a myriad of options, then, with a few clicks, order the product you want. Afterward you’re usually emailed a tracking number and with a single click you can watch your order leave the plant, arrive at regional shipping centers as it makes its way cross-country, and even find out when it will reach your house so you can greet the delivery person as he arrives at your door.
However, if you work professionally in logistics, then you know that supply chain visibility can be patchy. Often you can assure a customer that their single-item order will be in their custody by the end of the day. But when your production manager is worried about the timely arrival of a shipment of bulk components or ingredients, all you can do is pass on the reassurance of a regional distribution manager who plainly wanted to get off the phone. There is a significant gap between the capabilities of technology and its adoption by supply chains, yet improving supply chain visibility via technology is one of the most important things a company can do to increase its competitiveness and efficiency.
Improving Supply Chain Visibility Via Technology
Today we are in the midst of what is sometimes termed the fourth industrial revolution, or Industry 4.0. In simple terms, it is the last twenty years of digital technology finally being applied to industry and the supply chains that support it. In logistics, automation is the most visible part of this revolution. Autonomous Guided Vehicles (AGVs) in warehouses shuttle pallets of products from loading docks to racks and Automated Storage and Retrieval Systems (ASRS) find a slot for those products and bring them out again. An ASRS, like other supply chain automation, is backed by machine-readable tracking that enables the machinery to manage inventories. These codes can also be used to improve supply chain visibility.
A transparent supply chain is able to integrate the records generated by different warehouse management systems (WMS) and expand their accessibility.
Global standard GS1 codes have been enabling product tracking since the first barcode standard was agreed upon in 1973. These barcodes are what power the stock keeping units (SKUs) that retailers use to keep track of their inventories and which are already commonly used in the supply chain to record what has been sent or received by any single location.
Improving supply chain visibility via technology is largely a matter of using newly developed computer networks to link existing systems–such as tracking via barcode–together. A transparent supply chain is able to integrate the records generated by different warehouse management systems (WMS) and expand their accessibility. Keeping these records up-to-date allows any party with a legitimate interest to access accurate product inventories and shipment records and coordinate actions between locations. Companies that have this coordination are able to fulfill orders more efficiently, and the time and other resources saved give them an edge in the competition for market share.
The Advantages of a Transparent Supply Chain
At first glance, improving supply chain visibility via technology through means such as tracking products across supply chain locations may seem like an unnecessary expense. It takes specialized resources, such as barcodes or Radio Frequency Identification (RFID) chips that bear GS1-compatible identification codes, RFID or barcode readers at every location to record these codes, and data infrastructure that can interpret the data collected in order to make product movements accessible and clear to everyone managing the supply chain.
The ability to capture data and transmit it to customers in near real-time also enhances your company’s responsiveness.
For some decision makers, it may seem like technological upgrades could be dispensed with if logistics managers emailed more reports and made more phone calls. This is of course not so. The modern globalized supply chain has too many locations, too many products, and too much going on at any one time for any individual–or group of individuals–to keep track of. Improved supply chain visibility via technology works almost in real-time and enables companies to:
- Expose Hidden Problems: The automatic recording of product type, quantity, and movement through the supply chain reveals details of supply chain operations that would not be apparent otherwise, such as excessive time spent at one location. Any issues can then be addressed to increase the efficiency of your business’ supply chain management.
- Mitigate Interruptions: Capturing data also allows a business to spot slowdowns and unexpected issues in the supply chain and address them before they turn into interruptions. If interruptions do occur due to outside circumstances, you can easily locate and pull products or materials from another location to begin addressing the disruption.
- Improve Agility: Not all outside events are damaging–sometimes they represent an opportunity. Capturing data can lead you to locate unexplored opportunities and to move quickly to take advantage of these opportunities when they present themselves.
- Increase Speed: Making information accessible from anywhere reduces the time spent on each operation in the supply chain. The overall effect is to speed up the throughput of your supply chain every day, creating a higher return on your investment in logistics.
The advantages conferred by supply chain visibility may be individually small, but they can be applied to every movement, operation, and transaction in a supply chain, saving time and creating efficiencies that add up to significant savings. The ability to capture data and transmit it to customers in near real-time also enhances your company’s responsiveness and helps to create new markets into which you can expand. The primary reason that the implementation of data capture has been so inconsistent is the challenge of cost-effectively putting it into practice.
Cost-Effectively Improving Supply Chain Visibility Via Pallet Technology
The issue that prevents most companies from improving their supply chain visibility via technology is volume. Supply chains deal with large numbers of products and cartons and they depend on economies of scale to make a profit. The time it takes to manually scan a barcode on the many individual products that make up a single unit load is an extra step and therefore an expense that cuts into profits. And adding an RFID chip that allows product information to be read quickly and remotely adds a significant extra cost to each carton.
Because plastic pallets have a unitized construction, an RFID chip can be embedded directly into each pallet.
However, there is a more cost-effective method than tracking each individual carton of product; manufacturers and carriers can instead track the pallets that these goods are shipped on. Unlike cardboard cartons, pallets can be reused, which improves the return on investment for each RFID chip. However, wood pallets aren’t the most suitable platform for this type of technology; their boards often break or are replaced, which can cause the loss of the attached RFID chip.
Single-piece plastic pallets offer a better solution for improving supply chain visibility via technology. Because they have a unitized construction, an RFID chip can be embedded directly into each pallet, where it will last as long as the pallet does–anywhere from 80 to 100 trips through the supply chain for a high-quality plastic platform. The strength and durability of a plastic pallet helps to reduce product damage during transportation and further maximize the return on an investment in supply chain transparency.
The iGPS pallet pool provides a plastic pallet equipped with GS1 standard Global Returnable Asset Identifiers (GRAI) which can be read by scanning or RFID capture. iGPS plastic rental pallets provide a cost-effective way to improve supply chain visibility via technology for properly equipped supply chains. Give our team a call at 1-800-884-0225, email a specialist at [email protected], or visit our contact page.