The need for track and trace capabilities in industries such as food and beverage, manufacturing or automotive industries is obvious: the threat of contamination or recalls impacts public safety, and the responses to those events are highly regulated. Organizations need to know what goes into their products and their location at all times. But increasingly, companies in other industries are taking a fresh look at the need for advanced tracking and tracing capabilities that are critical throughout the order process and can drive efficiencies the entire way through, from picking to returns. According to a report by Aberdeen Group and GS1, e-commerce and multi-channel demands on companies are increasing, with 65 percent of respondents bypassing their own DCs to ship directly to stores via suppliers or 3PLs, along with 63 percent stating that supply chain visibility is a “high priority for improvement.”
If you’re pushing track and trace enhancements to the bottom of your to-do list, reconsider. The changing supply chain and higher customer expectations will require that you know every detail about where your inventory has been, is going, and when and how it will arrive. With this information, you’ll have a more comprehensive understanding for better decision-making around order fulfillment and operations management, as well as transparency throughout the returns process.
Detailed inventory management
Tracking your inventory is important for staying afloat (let alone remaining profitable) in today’s omni-channel world. Operating in a multi-channel environment requires the tight synchronization of product, shipment, cost and financial data. This can’t be accomplished without granular track and trace technology.
For example, a warehouse management system (WMS) can provide date stamps and assign unique lot numbers to inbound and outbound products as it tracks existing numbers automatically (using radio frequency or RFID) as they enter and exit the facility. This can help catch problems earlier – such as an item that was loaded onto the wrong truck – and track inventory more accurately so you know earlier when to reorder. In the put-away phase, stock location and rotation should be based on established, system-directed rules that avoid mixing products in locations that could affect integrity. For example, a product that has been rinsed should not be put away in a manner that would allow this excess water to drip onto another product or packaging material.
Without accurate visibility into historical and real-time inventory intelligence, organizations cannot efficiently fulfill orders coming through multiple channels, and risk losing money by missing merchandise that could be moving from a shelf to a customer.
Better analytics and reporting
Enhanced track and trace capabilities support advanced analytics for reporting requirements, such as in the event of a recall, and provide the real-time intelligence that can drive better inventory forecasting and more strategic operational decisions.
Working with a tier 1 WMS, you are able to pull reports around granular, configurable lot/batch/expiration date management, global inventory to create easy collaboration with suppliers, co-packers and distributors, and respond to changing compliance requirements. For example, a morgue archive allows you to identify recalled or expired items no matter when or how they entered your warehouse. In addition, data gathered from RFID tags can be tracked with the WMS to help you better analyze inventory trends and movements.
Product recalls occur occasionally, but they typically result in substantial inventory loss. Many companies have limited means to track and trace contaminated inventory, which means they often discard more inventory than necessary due to the inability to isolate and track a single product component. A tier 1 WMS also allows you to track and trace by ingredient, not just at the SKU, UPC or lot level. This increased level of detail helps you identify only the inventory affected by specific ingredient components, limiting the scope of potential inventory loss.
Track and trace abilities are key to your bottom line when dealing with returns. With greater visibility into inventories to help speed recalls and support accurate return processing, companies can save money and get the returned product back to the manufacturer or back into the inventory pool as appropriate.
Accurately picking and tracking inventory during order fulfillment pays dividends when the item is returned – literally. For instance, I know of a manufacturer that donated products after a natural disaster. A few less honest recipients claimed they bought the merchandise and tried to return the product to get cash refunds or credit. Because of the merchandise’s RFID tags and the ability to closely track the inventory within its WMS, the retailer knew that the pieces were donations and could deny the returns.
A better customer experience
More than just responding to recalls, advanced track and trace capabilities can drive efficiencies throughout the entire order process, from picking to returns. This isn’t just helpful to your operations; it also supports a better customer experience. Whether you are a retailer managing fast-changing merchandise trends or a 3PL supporting a diverse customer base, you’re likely dealing with a complex number of SKUs, quick sell-through speed, seasonal buying patterns and perhaps a potential for theft. You only have one chance to get your inventory allocation right and to provide the best experience for your customer.
Chuck Fuerst is the director of product strategy at HighJump Software. He has more than 15 years of experience in the technology market, working for supply chain and ERP software companies to deliver innovative solutions. Chuck is responsible for monitoring supply chain industry and technology trends and identifying ways to enhance the value of products for HighJump’s customers. He holds a bachelor’s degree in marketing management and innovation from Concordia University.