Autonomous Supply Chain Part 1 - Serialization technologies: Starter kit for Supply Chain practitioners & leaders
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"1. This 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
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
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
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
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.
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.
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.
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:
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.
“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.
“Espacenet - Bibliographic Data.” Espacenet.com, worldwide.espacenet.com/publicationDetails/biblio?CC=US&NR=2612994&KC=&FT=E&locale=en_EP. Accessed 27 Mar. 2021.
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.
“QR Code - Wikipedia.” En.m.wikipedia.org, en.m.wikipedia.org/wiki/QR_code. Accessed 3 Apr. 2021.
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.
Comments
Post a Comment