Accelerating the digitalisation of supply chains: managing brand risk, enhancing the consumer experience, and removing defects

For many years, adding coding and marking technology to your manufacturing line was perceived simply as a compliance obligation.

Now, with the advent of more complex requirements for supply chain trackability, coupled with increasing consumer demands for personalisation, provenance checks, and anti-counterfeit protection, that ‘simple’ coding and marking technology can be a big stepping stone towards both a fully-connected supply chain and an enhanced, interactive consumer experience.

Today’s supply chains demand increasingly connected data to satisfy basic requirements such as anticipation of demand, and space and range management. However, that data can be also be used to check products during production and prevent defects from reaching circulation. It can contribute towards a ‘single view of supply chain’, used to predict and prevent supply disruption, and is often also used to meet consumer and retailer demands for more personalised – and even interactive – product experiences.

Rob Peacham, Global Account Manager at Domino Printing Sciences, explains the journey that forward thinking organisations are embarking on to deploy coding and marking at the heart of fully connected supply chains and how the pursuit of the ‘batch of one’ can untangle complex logistics networks, and build consumer engagement and brand loyalty.

Digitalisation’s Evolutionary Journey

Coding and marking technologies have traditionally held distinct roles throughout the supply chain: ‘primary level’ (on-product coding) where basic safety information for consumers such as ‘use by’ dates is applied; and ‘secondary’ and ‘tertiary level’ coding (outer/case and shipment/pallet respectively) where packaging codes provide manufacturers with supply chain visibility throughout the manufacturing process.

However, these separations of use are being removed by changes to international and governmental regulations which have an increasing emphasis on product traceability. Regulations including the EU Falsified Medicines Directive and Medical Device Regulations, China’s Food Safety Regulations, and new requirements from the US Food and Drug Administration, and the Food Safety and Standards Authority of India (FSSAI) are all driving this evolution in coding and marking practices.

This evolution is sparking new levels of automation within the factory setting, right down to the ‘batch of one’.

Batch of one can be defined as the ability to have full traceability down to an individual product of manufactured goods from any particular production run. This gives manufacturers and legislators confidence in being able to trace specific items through the supply chain and deal with, for example, such things as grey-imports, or product recalls.

Logistics and supply chain professionals have long known that a combination of data visibility and an accessible single source of truth are critical to ensuring that manufacturers can comply with such strict regulations, by tracing their ingredients, products, and packaging materials both backwards and forwards throughout the entire supply chain – from manufacture through transit, retail, and to the end user.

Today, manufacturers are integrating coding and marking systems with MES (manufacturing execution systems) and ERP (enterprise resource planning) systems to combine simple lot/batch coding with variable data or serialised codes for individual part, ingredient, or product traceability. They are using a mixture of human-readable text and machine-readable barcodes, QR and Data Matrix codes to capture a multitude of data, which can then be automatically or manually read and verified throughout the end-to-end product lifecycle to validate production accuracy and trace stock locations. To facilitate this single view, coding and marking has come a long way from its ‘best before’ or ‘use by’ date origins.

Protecting (and Promoting) Your Brand

Brand-protection strategies have also been employed using coding and marking technologies. For many years, brands in a wide range of industries have sought to protect themselves against counterfeiting, often to reinforce a premium status such as with pharmaceuticals, but challenges involving counterfeiting of commodity items have seen the widespread introduction of unique, serialised coding on individual products.

This same ability to apply unique variable data onto individual products has presented brands with promotional opportunities too. As Stephen Sadove, former CEO of Saks Fifth Avenue, said: “If you can use technology to gain entry and then tell a story that’s engaging to consumers, then there is a good chance of success.”

To combat on-shelf competition, and build greater insight into shopper demographics, brand owners are appealing direct to consumers by adding promotional codes, such as competition entries, redeemable via dedicated landing pages with additional data capture. Batch-of-one coding can also be considered as a late stage customisation solution, with individual products personalised for a specific consumer, perhaps adding a name, message, or even photograph specific to the customer. Again, each product being a one-off.

Enhancing Experience – Consumer-driven Changes

More recently, retailers and consumers have been pushing for more information to be included on product packaging. In addition to ‘standard’ product information, demand is increasing for the inclusion of more granular data on a product label: information regarding product authenticity, provenance, best before dates, ingredient information, and even product maker/operator specifics that allow a consumer to be linked to a specific product at point-of-sale. Consumers are also demanding that manufacturers both improve and demonstrate their sustainability efforts by adding additional information onto products and packaging to help identify suitability for recycling, reuse and composting.

Of course, this demand for increased information comes at a time when those same sustainability drivers are challenging traditional packaging approaches. From more sustainable packaging materials to different pack sizes, manufacturers are having to experiment with new ways of getting greater variance of data onto the product label – without compromising the legibility and visual impact of the label. High-precision, high-quality coding and marking technologies have been developed to allow machine-readable barcodes, and QR and Data Matrix codes to provide ever more data in highly limited on-pack space.

Removing Defects, Waste, and Commercial Risk 

The increase in the amount of data variance on packaging and labelling means that the importance of consistent, high-quality coding is greater than ever. Coding and marking may seem a small part of the whole supply chain process – but errors can endanger the acceptance of the product by the retailer (disastrous for perishable goods), and also its traceability within the supply chain. Delays due to line stops can mean missed deadlines and potential corporate liability, and even basic coding errors can mean inaccurate quotas, unnecessary wastage, diminished consumer experience, and loss of brand trust.

On today’s production lines, particularly those handling multiple products for consumers worldwide, accuracy is crucial. Integrating printers with factory automation systems, such as MES and ERP applications, enables labelling data to be coordinated automatically without the need for human input. 

Switching from manually operating each printer to the centralised management and automated coordination of jobs, labels and data removes the risks associated with human error and can provide essential production data on the factory floor. Utilising automated product coding solutions alongside code validation systems is the most effective way of ensuring that production lines are kept error free, seamlessly handling product message changeover, and working in unison with external vision systems for message validation.  

Moreover, online portals can now enable live tracking and authentication of products through the supply chain. If items are removed or changed during production, or damaged during transit, the associated serial numbers – down to batch of one – can be decommissioned, and the data in the central repository updated to allow for highly granular, accurate inventory management, with every part of the business operation updated with the latest information in real time. Scanning products at the point of purchase gives assurance to consumers and retailers. For example, pharmacies can validate medicines before dispensing and customers (via smartphone apps) can check food products are safe before they purchase them.

Finally, greater intelligence and visibility of real-time production line operations can enable manufacturers to streamline their factories, reducing stock holding and inventory, and work towards more sustainable production. 

Enhancing factories for the future

New applications using existing technologies to make data more accessible, from variable barcodes that include sell-by dates; the introduction of 2D codes at the point of sale that can be used on products that are priced by weight (e.g. meat); Data Matrix enabling products to be identified and tracked throughout their life cycle; and GS1 tag contacts that consumers and manufacturers can use to track – for example – extended warranties on white goods, provide opportunities for whole life marketing.

These applications are key in supporting the growing trend towards more frequent line changeovers in place of long, dedicated runs of one product. Being able to track and trace smaller batch sizes – even down to the batch of one – throughout the supply chain is now essential for manufacturers to operate successfully.

Indeed, as increasing numbers of daily transactions migrate online as a direct result of COVID-19, even for daily commodities, consumer expectations for those transactions continue to increase, in terms of the ease of mobile phone ordering, payment, and real-time order tracking. This means, similarly, that the bar for consumer expectations of brand leaders continues to rise. In the future, online tracking of purchases, and extended warranties such as those mentioned above, are likely to become a hygiene factor, rather than a differentiator, for consumer purchase decision making.

Conclusion

With global supply chains under increasing pressure, seemingly on all fronts, data sits at the core. In taking steps towards achieving a connected supply chain through new innovative uses of coding and marking technologies, organisations can thrive in the near real-time, personalised batch run, as well as opening the door to move beyond the existing benefits of batch coding and towards ever more interactive and immersive applications, to engage retailers and consumers alike, while increasing operational agility and efficiency.

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