Why connectivity is key to protecting supply chains
The past 100 years has seen the traditional supply chain evolve from a straight-forward, but labour-intensive process to an era of engineering marvels and extraordinarily complex and diverse range of global networks.
Whilst technology is viewed as a saviour by many supply chain managers looking to lower administrative overheads and advance the speed and accuracy with which information flows, it has proven to be a double-edged sword – making the actual physical supply chain a little bit more difficult to manage.
Whether it’s ensuring supplier quality and performance, or fulfilling environmental and regulatory compliance, supply chain managers have to tackle these challenges while also needing to achieve accurate forecasts and drive cost efficiencies.
Perhaps the most pressing challenge is one born from increasingly dispersed and flexible supply chains, is protecting the supply chain; an obstacle that will never truly go away. Whilst the risk from cyber threats applies to supply chains and third-party logistics providers as much as the next organisation, it’s the traditional problems such as theft, inventory shortages and fire, which persist as long-standing risks to mitigate.
We already use technology to enable greater supply chain efficiency and visibility, by embedding it throughout the organisation in the form of electronics, software, sensors, and network connectivity to collect and exchange data during interactions. But are we using this information in the best way? Especially when you consider how the miniaturisation of technology and reliability improvements allows for Internet of Things (IoT) devices to be used at almost every touchpoint in the supply chain.
As every supply chain manager knows, there are hundreds of endpoints to manage in any supply chain across picking, logistics systems, payments, scheduling and compliance, to name but a few. In order to protect the supply chain effectively, we need to be able to understand what is happening at any point in space or time on a consignment’s journey, throughout production, storage and transportation.
We need to move away from collecting data in isolation for retrospective reporting, rather use it to inform real-time analysis and decision making. Connecting data across systems in real-time is the key, giving the system and managers the ability to have an elevated, updated and accurate view of their supply chain at any moment.
Whether it is a radio-frequency ID tag on a pallet passing through a sensor, a calibration device on a piece of machinery, or an temperature device on a lorry carrying chilled goods, the transmission of data will either change a status, or trigger a real-time decision and action that which must take place in that moment. This is the real-time supply chain, and that connectivity between systems is the key to protecting the supply chain.
Temperature sensors are a great example of this. If the temperature drops below a threshold we need to raise an alarm – both on the lorry and in the supply chain – that might come from a single warning data transmission. However, if the sensor had been constantly transmitting data, these systems may have assessed much earlier that the trailer was struggling to maintain its required temperature.
Such real-time analysis would not only better inform and accelerate the decision making process as to whether to take the trailer off the road for servicing, but also determine the best time for this to occur as well as modify distribution schedules to accommodate the now delayed service. Thus completely avoiding a lorry full of perished goods and the logistics nightmare of needing to take a refrigerated trailer out of service.
Many companies are now experimenting with using artificial intelligence as a way to make these real-time decisions, by reviewing trends in data over longer periods of time. The same approach can identify trends that might indicate fraudulent activity within the supply chain, or the gradual decline in efficiency of certain transport routes.
No matter how extensive or complex, supply chain managers need to look at how they can incorporate these technologies and improve the connectivity of data across their supply chains, if they are to mitigate and protect themselves from risks. You cannot secure a dynamic supply chain if systems lack the agility to keep up with the threat.
In order to maintain your supply chains flexibility, you must audit existing systems in place, the data you have at your disposal, and the processes you see as key to protecting your supply chain. This will help identify where there are gaps in your data, and how replacing systems, or connecting them, can help you make processes more efficient, even automated.
While such projects might appear seem arduous and risky it’s important to remember there’s no greater risk than standing still. Once you have assessed your systems and processes there will be immediate opportunities to address mission critical risks. Connectivity doesn’t need to be a complete rip-and-refurbish, but a step-by-step process that gives you the confidence to demonstrate true business value. The only question remaining is whether you start this journey before your stakeholders demand to know why your supply chain isn’t secure.
Upgrading RFID and Automated Track and Trace Solutions
During the COVID-19 pandemic, global supply chains faced the challenge of rapidly adjusting their business priorities to new customer preferences. Local supplier backlogs, winter storms, and the Suez Canal backup in March underscored the need for efficiency and visibility across the supply chain.
According to Christof Backhaus, Digital Lead Product Supply and Smart Label Project Lead at Bayer, companies must now place critical importance on tracking and tracing their products. “All large enterprises in the world dealing with finished goods,” he said, “seek functional and technical solutions to real-time channel inventory.”
Indeed, RFID’s real-time tracking data allows executives to make quick, well-informed decisions in moments of supply chain crisis - and rather than unfolding across days or weeks, it only takes a matter of minutes.
Why does RFID remain relevant despite digital disruption?
Essentially, RFID uses radio frequency waves to transfer data wirelessly between a scanner and a tag. In contrast to barcode technology, which requires a stationary scanner, RFID tags can be pinged from anywhere in the world, allowing companies to track real-time movement through the supply chain. RFID tags can also scan unique SKU numbers and distinguish between varying product sizes, colours, and styles: a critical feature for increasingly personalised end-user products.
Though the first patent for RFID tags appeared in 1973, higher accuracy rates, lower costs, and advances in sensor and data technology have made it newly accessible to a wide range of companies. Today, the technology is used in logistics networks, manufacturing and delivery networks in the pharmaceutical industry, and any business where efficiently tracking and monitoring product location is critical: raw materials, consumer products, cars, electronics, retail, and agriculture.
What are the key benefits?
Overall, automated track and trace solutions keep labour costs low, optimise operating costs, mitigate security risks, use capital effectively, and assist companies in adhering to regulatory requirements.
Below are three in-depth dives into how RFID benefits major industries:
- Pharmaceuticals: RFID tags help manufacturers safeguard sensitive products such as vaccines, tracking where they are and when they will arrive in real-time. Sensors closely monitor temperatures to ensure regulatory compliance. If anyone tampers with a shipment, the sensors alert the company.
- Logistics: RFID identifies process gaps and frequent anomalies by monitoring a product’s lifecycle from shipment to delivery. This data helps decision-makers predict the most efficient routes and therefore optimise their distribution schedules.
- Retail: Sensors help guard shipments against theft and provide critical intelligence when shipments go missing. Before adopting RFID technology in 2203, UK retailer Marks and Spencer relied on barcodes to scan inventory. When they made the switch, their productivity increased from a maximum of 400-600 items scanned per hour to up to 15,000 items scanned per hour. Building on their initial success, the retailer expanded the use of the technology and is still using it today.
Regardless of the industry, RFID promotes accuracy, immediacy, and efficiency. Companies reduce human error by automatically scanning products, keep track of inventory even in geographic locations with poor connectivity, and help streamline warehouse operations by identifying exact product locations.
Which recent innovations have changed the game?
With recent developments in cloud technology and IoT, a multitude of cloud-based alternatives have emerged to challenge traditional RFID technology. One of these cutting-edge solutions is Sony’s Smart Label - an intelligent shipping label that runs on AT&T’s global cellular network.
As with any good innovation, Sony’s proprietary technology started with a customer need ready to be solved: the Bayer Crop Science Division lacked an international IoT solution that could track seed products from start to finish throughout its distribution channel. Millions of dollars of revenue stood at stake, so Bayer turned to Sony to develop a smart label that would set the organisation up to manage its supply chain with end-to-end visibility.
Sony’s printable and disposable adhesive label allows companies to track the condition and location of their products worldwide and act upon the vast amounts of data it collects. The process is simple: the label activates when attached to the package, connects to AT&T’s secure LTE-M network, and sends data to the Smart Label Cloud in real time.
In sharp contrast to other smart label solutions that place trust in a patchwork combination of Wi-Fi, radio-frequency identification, and other limited coverage connections, the Sony Smart Label connects solely through a secure and universally-available cellular network. “Working with Sony,” says Robert Boyanovsky, the vice president of Mobility, IoT and 5G at AT&T, “we provide full visibility of every item shipped.”
Most importantly for companies on the edge, the Smart Label integrates with existing enterprise systems to achieve full visibility, thus adding value without disrupting supply chain process flow.
Why is this important now?
Companies that previously delayed introducing RFID and other automated track-and-trace technologies can capitalise on recent developments that lower costs, improve accuracy, and supercharge traceability.
Clearly the technology has value in today’s uncertain global marketplace, and can help decrease the costs of tracking goods. To quote Christof Backhaus, the Project Lead at Bayer, “the Smart Label indicates how much product is in the market, from the packaging line to the end customer.” Companies no longer have to spend a small fortune to take advantage of recent IoT developments. “Due to the technical composition [of the label],” Backhaus explains, “we don’t require additional infrastructure, manual scanning, or other expensive tools.”
Over the decades since RFID was first introduced, support for introducing it to company supply chains has also improved. AT&T’s IoT Professional Services Organisation, for example, supports companies through the end-to-end design and integration process--from installation to deployment and project management.
Companies that invest in traceable and visible supply chain solutions stand the best chance of survival, adjusting in real-time to natural disasters, shipping backups, and slowed-down supplier turnarounds as a result of the global pandemic. “Smart Label promises to help businesses like Bayer realise the full potential of the IoT,” says AT&T’s Boyanovsky. “[We can] deliver improvements in revenue and cost savings and make supply chains more efficient.”
Certainly, company executives will be hard-pressed to ignore recent innovations. In an age of uncertainty, RFID and its challengers herald a welcome sense of supply chain security. The next step? “Our sales team,” Boyanovsky adds, “is prepared to engage with prospective customers now.”