Three Steps to Supply Chain Digitization
In our recently released article, Driving supply chain value from Amazon Transparency, our chief commercial officer, Attilio Bellman suggested how to extract value from your end to end supply chain by implementing Amazon Transparency. The starting point, as discussed in the article, is that brands must put a unique serial number in the format of a 2D barcode on each unit sold in order to adopt Transparency.
However, supply chain digitization is a general concept that goes beyond Amazon Transparency. The serial number applied to physical goods is the ‘gateway’ to digitization, the link between the physical world and the cloud. Physical products (packaging, in general) need a way to be uniquely identified if we want to assign to them a digital identity. Physical products also need some sort of ‘interface’ with humans, the customers, something that you and I can see, recognize and engage with using our smartphones: The interface is, for example, a 2D barcode (or a QRC).
In this article, Dr. Bellman has identified the three steps you must take to digitize your supply chain.
Step 1 – Enable Serialization
Physical goods in the supply chain come in all sorts of shapes and forms, such as can of soda or an energy bar or a case or a pallet. If you want to digitize your supply chain, you have to give a unique digital identity to each physical good. Serialization, as the process of assigning a unique serial number to each physical good, is the starting point for supply chain digitization.
The implication of serialization is that now you have to be able to generate, distribute and manage serial numbers, so you have to put in place the right system architecture and the right software for serial number management. Then you have to put a serialized 2D barcode on your packaging. And that brings me to Step 2.
Step 2 – Enable Digitized Packaging
The barcode on your packaging is the carrier of the digitization. There are two most common ways to digitize packaging and goods:
a. Apply a pre-serialized label or a sticker. This may seem to be the easier way, however, it comes with some issues, for example, having to manage pre-serialized labels and stickers and making sure that the proper label or sticker is attached to the correct good (item, case, pallet, etc.). For low volume and few SKUs this may work.
b. Work with your packaging providers to embed the 2D serialized barcode directly into your packaging and make digitization part of your product design. I think that this is a key strategy. Serializing your packaging requires a little bit more of work upfront, however, in the long run it will establish serialization as part of your standard business processes and it will enable digitization throughout your end to end supply chain, from manufacturing to consumer engagement at the store.
Step 3- Enable Digitized Processes
Last, but not least, how do we manage a digitized supply chain? Creating digital entities and serializing are necessary steps to extract value from digitization, however, we will have to learn how to unleash the power of digitization by changing the way we extract and consume data from the supply chain.
Collecting digitized information from the supply chain will require new processes and systems, such as the ability to read the 2D barcodes at any point and trigger data upload and actions based on the context of the read. Also, we will have to enable processes to associate supply chain information to the physical good that moves in the supply chain. You may want to augment the digital entity by associating temperature information, LOT numbers and Expiration Dates for better recalls, or videos, assembling instructions, proof of authenticity, anything that generates value.
The bottom line is that taking the first three steps towards digitization requires some thinking and planning, from a cross-functional team that is willing to take a step back and take a holistic view to the supply chain.
I encourage you to reach out to me and understand more about our Adept Connect Workshop offering, which is intended as an interactive session for your team, in which the trainer will facilitate an open discussion among participants and will guide them to construct a company roadmap to gain a strategic advantage from supply chain digitization and IoT.
Contact us with any questions or for assistance with digitizing your supply chain.
Dr. Attilio Bellman, Chief Commercial Officer – Adept Connect
Cell: +1 (347) 439-3587