Autonomous Supply Chain Part 1 - Serialization technologies: Starter kit for Supply Chain practitioners & leaders


In today's age of hyper automation, Autonomous Supply Chain is a key buzzword. But significant elements of the Supply Chain operations across industries are stuck in the industrial age practices of paper-and-pen or plagued with disjointed automation technologies, around core monolithic ERP systems.

In such an environment, it's critical for both Supply Chain practitioners and leaders to understand the basic building blocks of process automation that can enable the vision or mega plan for a hands-free supply chain.

Effect of COVID-19

In today's world plagued with the COVID-19 pandemic, the appetite for transformational change has significantly increased. And this includes changes in business processes and digitalization of traditional areas like inbound logistics, warehousing, outbound logistics and overall fulfillment execution till the last mile.

This transformation includes need for touch-less operations, especially in high manual activity areas. For example, identifying on-hand inventory, expired stocks and near expiry stocks requires significant effort in various industries. Added to this is the complexity of high demand-supply fluctuations which necessitates real-time visibility of productive stocks across the value chain.

Serialization

This article focuses on one of the blind spots of Supply Chain Operations in the form of product traceability technologies which is also referred to as Serialization. The term Serialization refers to unique numbers assigned to each item that can be traced across the value chain over a long period of time.

Life Sciences or Healthcare value chains extensively uses Serialization technologies for track and trace of finished goods to minimize counterfeit products in the market. The food and beverage industry also uses Serialization technologies for multi layered use cases e.g. inventory management, traceability from raw materials to consumption by consumers, identification of life expectancy/shelf life of products.

As Susan Bidel of Forrester Research says, "In the Age of the Customer, Data is King"1This is also true for product level tracking systems and the inherent capabilities to capture data pertaining to raw materials, intermediate products, finished goods, packaging material, machine spares and a host of basic data elements of a company's material flow. This data builds a mountain of information that can be utilized for a agile, transparent and customer focused value chain.

For example, this information can enable automation of basic handling and operational tasks in manufacturing & warehousing that is an essential building block of an Autonomous Supply Chain.

Here's a quick look at three of the most popular Serialization technologies that are extensively used across industries:

1. Bar code:

This is one of the most common Serialization methods which can be traced back to 1932 when a group of students, headed by William Flint, proposed it in a Master's thesis for automating purchase, selection and delivery of merchandise to the customer, while updating inventory records.2

The bar codes' visual representation of data which are machine readable, uses parallel lines of varying widths and spacing. They are readable by optical scanners called bar code readers. This technology was invented by Norman Joseph Woodland and Bernard Silver and patented in 1951.3



Image credit: Wiki Commons

Today world over, Bar codes are found on a range of consumer goods and used for faster billing checkout and handling at retail marts, to name one instance of its everyday mass usage for process automation.

It has also evolved from the one dimensional (1D) technology which symbolized the width and space between the parallel lines. Other shapes such as rectangles and hexagonal that are two dimensional are also used and hence these are called as 2D bar codes.

This technology finds application in many industrial purposes from automated handling of goods and storage to track & trace purposes. It is relatively cheap, with bulk of the cost being the printing ink and the paper or plastic on which it is printed. Most of the equipment required for using this technology e.g. printers, scanners etc are also relatively cheap and usually outsourced as a pay-per-use basis like office printers.

However there are a few limitations to this technology. It requires direct line of sight to be able to read the information. Due to this limitation, the bar codes need to be on the outside of a product or package. This also means they can be ripped or damaged. The scanners also need to be within 15 feet of the bar code label to detect it.


In several automated manufacturing setups, high speed vision cameras and in-sight cameras are used to automate material handling using bar codes.

The information on barcodes are limited to manufacturer and product, and does not have read or write capabilities to include other information such as expiry date. They require individual pasting of bar code tags and scanning, so it involves a lot of manual effort. There's also a high chance of fraudulent coping or forging of barcodes.4

2. QR code:

QR code or Quick Response code, finds its origin from the Japanese automotive industry when it was first designed in 1994 by Masahiro Hara of Denso Wave. It consists of black squares arranged in a square grid on a white background, which can be read by an imaging camera and processed using Reed-Solomon error correction. The data is extracted from both the horizontal and vertical components of the image.5

QR codes have a huge range of usage. While it was originally created to track automotive parts, QR codes have permeated the lives of human beings from industrial to retail and consumer domains. The massive adoption is largely due to the flexibility of the information that can be stored from Website URLs, to product information to assisting location tracking where it is scanned.

In modern days it is used by retailers, to direct consumers to different websites or offers or loyalty programs. While other companies use it for channel management or track and trace to understand different points of transit or consumption. Some firms have also innovated further to use drone technology to scan the QR codes in warehouses for automated handling of inventory counts.


Image credit: Arcus

There are a host of QR readers and apps, for example mobile manufacturers like Apple even have smartphones with iOS11 and higher, with integrated mobile cameras with the capabilities of URL redirection. This has brought this technology at the fingers of a vast majority of people around the world.

From a Supply Chain's Order to Cash perspective, it's interesting to see enhanced usage of QR codes for e-payments and product traceability. Both of which can bring agility and visibility of stock locations and billing/consumption data that's vital for demand sensing and visualization of end-to-end value chain.

As an after thought, it's also intriguing to see QR codes being used on tombstones which redirect interested people to webpages of the deceased.

    
Image credits: Campaignasia

This is the power of technology...you never know where it can be used!

3. RFID:

RFID or Radio Frequency Identification uses electro-magnetic fields to automatically identify and track tags attached to objects. This technology is composed of a system of a tiny radio transponder, a radio receiver and transmitter. 

There are two types of RFID viz.

  • Passive tags which are energised by the interrogating radio waves of the RFID reader.
  • Active tags that are powered by a battery and can therefore be read over larger distances of hundreds of meters.

RFID tags or labels are made of three pieces viz. a Micro chip which has an integrated circuit that stores and processes information and modulates and demodulates radio-frequency (RF) signals, an Antenna for receiving and transmitting the signal and a Substrate.


Image credit: RFID Tag structure

This technology is used in a wide range of supply chain applications across industries from tracking finished goods and packaging material for inventory management, automating handling of goods, positive identification of products and livestock, automated billing/ tolling, to name a few.

RFID can ensure touchless experience across the supply chain and can be deployed for upstream processes and end customer or consumer facing processes. This can deliver a "safe", physical contact-free experience for different entities, thus aligning to hygiene measures put out by government authorities for pandemic control measures too.

Ironically, the origin of RFID is attributed to Leon Thermin's invention in 1945 which was used for Soviet Union's listening devices that retransmitted incident radio waves with the added audio information.

However Mario Cardullio's device patented in 1973 is considered as the father of the modern RFID tag. It was a passive device powered by interrogating signals, demonstrated to the New York Port Authority and other potential users in 1971.

Over years, different industries have used RFID tags or labels with read-only, as well as read/write capabilities and stored different kinds of information. For example, it can be used for checking the physical state of perishable goods. It can also be embedded in animals and feedstock.

RFID tags can cost from 10 cents to $150 based on the technology adopted. Gartner estimates that by 2022, 2 billion tags will be created and applied by a specialised printer that prints the chip and antenna directly on the asset, up from the current less than thousands today.6

The most important part of using RFID is defining the goals and refining the processes for its usage.  Given that its 100 times more costlier than bar codes, there needs to be a clear business case and strategy.

Conclusion

Selecting the right Serialization technologies has several "moving parts" which comprise of the target processes, intended business goals, return-on-investment (ROI) and overall step jump in performance of the business and supply chain. These decision parameters contribute to selecting the right technology and putting resources behind it for a changed process and IT landscape.

References:

  1. Bidel, Susan. “In the Age of the Customer, Data Is King.” Forrester, 1 June 2017, go.forrester.com/blogs/17-06-01-in_the_age_of_the_customer_data_is_king/. Accessed 26 Mar. 2021.

  2. “What Is a Barcode (or Bar Code)? A Short History of the Barcode.” Barcode Brian, 22 May 2014, barcodebrian.weebly.com/blog-posts/what-is-a-barcode-or-bar-code-a-short-history-of-the-barcode. Accessed 13 Mar. 2021.

  3. “Espacenet - Bibliographic Data.” Espacenet.com, worldwide.espacenet.com/publicationDetails/biblio?CC=US&NR=2612994&KC=&FT=E&locale=en_EP. Accessed 27 Mar. 2021.

  4. Hinz, Paul. “RFID vs BARCODES: Advantages and Disadvantages Comparison.” Adaptalift, May 2012, www.adaptalift.com.au/blog/2012-05-01-rfid-vs-barcodes-advantages-and-disadvantages-comparison. Accessed 4 Apr. 2021.

  5. “QR Code - Wikipedia.” En.m.wikipedia.org, en.m.wikipedia.org/wiki/QR_code. Accessed 3 Apr. 2021.

  6. Zimmerman, Tim, and Nick Jones. “When and Why Enterprises Should Implement RFID to Track Critical Assets.” www.gartner.com, 27 Feb. 2018, www.gartner.com/document/3863067. Accessed 4 Apr. 2021.



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