Accurate information is a necessity
Written by Holly Porter, CMO at GS1 UK
Ensuring a product has the right information, in the right place, at the right time, and at the right cost is crucial to ensuring the entire supply chain sees maximum benefit from a transaction. Standardising this flow of information in the global supply chain frees up valuable capital and resources, by reducing the time and money spent on transportation, data entry, sales and manufacturing.
Research from GS1 UK, the not for profit global supply chain standards and solutions organisation, and Cranfield School of Management, shows that bar code use alone has enabled the UK retail industry to save £10.5 billion last year. But it’s not just about the end customer that benefits; using locally licensed, globally reaching unique numbers in bar codes helps to streamline all areas of the supply chain, from asset tracking, to ordering and invoicing, and product traceability.
Ensuring this effective and efficient management of information is becoming more and more important for consumer-facing businesses and their supply chains. In the Food Service sector, for example, numerous and complex challenges are making accurate and consistent information a necessity rather than simply nice-to-have. These include the rise of the CSR agenda for food and packaging waste, consumers wishing to eat more healthily, legislative changes, and the evolution of the savvy shopper who has the desire and capability to research everything before buying or making a choice. In particular, with the growing concerns towards healthy eating and allergies, the failure to provide more information on product ingredients could have serious consequences for both the brand owner and the food service organisations who could be exposed should inaccurate information cause consumers to be harmed.
However, despite this rising demand for accurate and trusted information, a recent report by the Food Services Director Group (FSDG) found:
- 60 per cent of products entering the Food Services supply chain are not identified adequately with a globally recognised unique identifier
- Legacy systems and manual processes to rectify mistakes cost £23 million every year
- Heavy use of descriptions and/or proprietary numbering exists to identify products
- There are significant paper-based processes around dispatch and receipt activities
- Majority of the sector is reliant on company specific new line forms
- No single point where all product information is held, often information is stored in multiple areas – internet, intranet, PDFs and menus
- Nearly two thirds of products contained at least one nutritional related error one step down from the supplier
Implementing globally standardised unique numbers to enable automated data capture and using tools to ensure all data is present and correct could mitigate stock shortages, eliminate errors and additional work this causes by almost two thirds. FSDG calculates this potential savings opportunity to be up to £100 million over the next five years.
Furthermore, while these findings refer to the Food Service sector, we know these issues are not wholly unique to it; there are supply chain efficiencies to be made across all sectors and standardisation is the key.
Standardisation and automation ensure that the quality of information will increase, leading to improvements in inventory management, stronger quality control, a firmer control over IP, fewer out of stocks, a reduction in waste and improved traceability and monitoring purposes. It will also drastically increase efficiency as sharing a consistent data-set between different levels of the supply chain will ensure less time is spent on correcting errors and data entry.
Currently, the system is working, but it could work better. Within the struggling economy, the supply chain needs to be as efficient as possible. Plus, the increased consumer demand for information will not go away. To keep pace with consumer and customer expectations to manage information efficiently and economically, manufacturers, operators and suppliers need to collaborate to address the information challenge head-on.
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.