Monitoring supply chain returnable packaging made simple
Think back to the days w...
Track and trace systems for supply chains assets like returnable packaging have never been easy, but that’s about to change.
Think back to the days where apps like Uber didn’t exist. Getting a cab was fraught with a variety of challenges. Were you carrying cash? Could you find or remember the number of a local cab service? Will they know where to pick you up from? Will they know the best route? Will they overcharge me? Something as simple as getting a person from A to B became a web of processes and micro-decisions, making the simple unnecessarily difficult. Then Uber came along and changed everything, automating all the decisions so all you have to do is download the app, hail a ride, and you’re on your way. Supply Chain Managers experience similar complications on a daily basis. We don’t think it has to be this way. What if there was a way to monitor your supply chain as efficiently easily as hailing an Uber?
Returnable packaging – The invisible priority for Supply Chain Managers
The three visible priorities of supply chain departments are:
(1) delivering goods in good condition.
(2) delivering them on time.
(3) delivering them within budget.
The above is non-negotiable, a statement of fact. There is, however, a fourth element often forgotten about (and not visible at the surface) until it’s too late: Returnable Industrial Packaging (RIP). Considering how heavily it affects the downfall of the department’s main goals, it should be considered a major priority itself.
Returnable Industrial Packaging (RIP) is not considered an issue until the Financial Director pulls up the annual profit and loss account of the company and interrogates the Supply Chain Manager about their working practices: how much working capital are we using? How many assets went missing? Why is so much of our RIP lying in our warehouse? Suddenly, it’s not just a supply chain issue – it’s a profitability problem.
Furthermore, the growing global supply chain economy has transformed RIP into a pressing issue. The more the scale of a supply chain grows, the higher the Total Logistics Costs (TLC) become if processes aren’t managed efficiently. Delivering items on time and in good condition and the right costs, requires reducing TLC by unveiling the hidden costs. Simple.
Shrinking RIP inventory by maximising its use lowers operational and capital costs (reducing capital expenditure loss), as well as making a more environmentally friendly supply chain. The reality is that supply chain departments have been trying to improve costs by unveiling the hidden add ups for decades, but the lack of technology didn’t allow for this, because you simply cannot improve what you cannot see. And even with growing ‘standardisation’ of these forms of technological solutions, we find that…
RFID is not the answer.
Essentially, the answer to the RIP issue lies in three simple points:
(1) achieving full live visibility of inventory
(2) learning how to move inventory to the right places
(3) knowing when it should be moved
RFID is held up as the holy grail of tracking movement of goods, but the truth is that its technology is heavily flawed. RFID needs an RFID tag on the tracked item and infrastructure in the form of readers (to sense tags) and antennas (to increase the range of those senses). Seems simple, but implementing infrastructure requires complex planning and managing between manufacturer and suppliers, hefty initial investment, developing cloud applications, system integration experts and time (a lot of it).
A supply chain operating across 500 sites can take up to two years to plan, install and test RFID before its up and running. Even then, there is no guarantee that all the pallets are getting read, as they may be in a zone with no antennas, so process orientation schemes are also required.
And the day you wish to change suppliers - you’ll need to reinstall infrastructure at every new facility, starting this whole process again.
In simple terms, RFID fails to deliver the kind of scale that enterprises need, especially when addressing their own warehouses and ecosystems.
The 0G - Bee technology
By approaching the problem differently, you’ll achieve different results. Better ones. Ditching the complex nature of RFID and lookalikes for the lightweight solutions offered by wireless, low-emission networks really can revolutionise the way you track and manage RIP across your supply chain.
Adopting a digitally connected supply chain doesn’t just reduce TLC faster and more affordably than RFID. It also enables advantages that were not possible before the emergence of these sort of solutions and services emerged.
The advantages of such a solution are five-fold:
These solutions operate on a subscription service. They take a ‘pay-as-you-go’ approach that allows for a speedy implementation and immediate integration of their technology. It’s simple; assess the needs of your supply chain and receive Low Power Wide Area Network (LPWAN) enabled Bees to slap onto your reusable packaging. And that’s it.
No infrastructure, no capital expenditure, no testing, no process reorientation, no restrictions in scope and complete visibility of inventory. Get going from day one.
‘Hardware with no upfront costs’
The efficiency and durability of these devices tracking RIP ensure a hassle-free customer experience. There is no upfront payment or sensor purchase! Low-frequency networks and motion sensors enable a battery life that outlives the life-cycle of returnable packaging. Downtime, maintenance and refresh costs are all significantly reduced.
Even if you have complete visibility of your supply chain, how valuable is that intelligence if the data is not actionable?
The fact that the data exists and travels on a real-time basis, as well as being able to store in similar ways to ‘big data’ means these solutions go beyond telling you where your returnable packaging is. By taking all data into consideration, they can tell you whether a specific RIP has to be moved, where to and by when. It’s a little like an improved Google Maps: it lays out all information required for users to make the right decisions when choosing a route, but further adds value by offering the user the most efficient routes in the supply chain in context to its surroundings by predicting future needs from past data. The system then signals live cloud-based alerts via the 0G network.
‘Automation of actions’
Robotic Process Automation (RPA) intelligent control-tower systems assist you where possible in taking the right action at the right time - which means costs are further reduced as you dispose off capital and complete autopilot is achieved when it comes to getting results.
An enterprise grade solution with a consumer experience.
We get it. “Too good to be true”. “Too expensive”. “Oversimplified”.
Except not really. There is no need to over-complicate an already complex process - so get rid of the unnecessary hurdled like tracking device purchase, deploying infrastructure, testing, maintenance, and cloud application development in deploying IoT systems for your returnable industrial packaging (RIP). And if anything, these sorts of solutions enable enterprises to have more complex and highly multifunctional connective networks across all business activities, while making monitoring easy and consumer-like.
Supply chains are always going to be complicated, but they don’t have to be quite so. Let’s Uberfy the industry and make efficiently run supply chains a reality today.
By Premsai Sainathan, Director of Marketing at Roambee and Ana Maria Giménez, Global Business Development, Sales & Channel Acceleration at Sigfox
For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.
5 minutes with: Ivalua’s Sundar Kamak
Who are you?
My name is Sundar Kamak, I’m Head of Manufacturing Solutions at Ivalua. I’ve been with the company for around two years now, and I’m responsible for our industry solutions and our pre-sales team. Before joining Ivalua I spent almost 20 years in the source-to-pay procurement space, working for a number of providers. But I got my career started in manufacturing and supply chain, specifically in automotive and aerospace.
And what is currently taking up the majority of your professional time?
The last year I've been focused in helping organisations put together a digital transformation strategy, especially manufacturing companies, so they can continue to address some of the challenges they face due to the COVID pandemic.
The traditional approach of engineers designing their latest product then procurement going off to source no longer works
What are the biggest challenges facing your corner of supply chain?
We have a lot of clients coming from different backgrounds - aerospace, high-tech, automotive - and they’re feeling the pressure and the crunch. There’s a lack of product, lack of material availability, lack of resources, labour shortages. So, I work with the leadership in these organisations, try to understand what problems they're looking to solve and come back with Ivalua solutions that can help them address some of these challenges.
Where do the biggest opportunities lie?
If we look at manufacturing, it all comes back to procurement and supply chain being involved sooner in the process. The traditional approach of engineers designing their latest product then procurement going off to source no longer works. It’s important to treat suppliers like partners, which means you build trust, so they can participate very early on in the product design and product development process. It’s not done consistently in the manufacturing sector, but it will be key.