Serialization and Traceability in the Supply Chain

Product serialization and traceability are fast becoming a necessity in today’s retail and manufacturing landscape. Buyers today, whether they are consumers or product buyers at the wholesale level, want to know more than just where a product is made. Details on an item’s origin, right down to the raw materials, not only satisfies buyer curiosity, but it also allows complete visibility and control of the supply chain at a granular level.

As such, the benefits of serialization and traceability are multi-layered. With the ability to track individual products, waste is minimized, fraud is eliminated, and inventory transparency is achieved with complete visibility through every point in the supply chain.

What Is Product Serialization and Why Does It Matter to Your Brand?

The idea of serialization is not new. In the food and beverage industry, in pharmaceuticals, and any other industry that sells products with a limited life expectancy, serialized codes keep people safe and allow brands to take entire batches out of circulation, if necessary.

However, serialization at the individual product level is about more than just a bar code label on a box – it’s about what’s inside the box, too.

With the ability to track items at an individual level, brands gain 360˚ traceability of their goods. From the source of raw materials to the factory, the packaging, to the store shelf, and every stop in-between, the product journey is an open book, providing companies with greater control over their inventory and consumers with the satisfaction of knowing that their item is exactly what they paid for.

Individual product serialization enables authentication, counterfeit prevention, and providing complete oversight of your supply chain from end to end, satisfying a brand’s need for better control of their inventory, and supporting buyer confidence and brand loyalty.

Product Serialization and its Benefits

To summarize, the benefits of product serialization include:

  • Know where your products are at all times
  • More accurate demand forecasting
  • Supply chain visibility
  • Granular control over all points in the supply chain
  • Track raw materials
  • Support supply chain transparency and accuracy
  • Access detailed information on origin and manufacturing processes
  • Guarantee of provenance and authenticity
  • Supports corporate responsibility
  • Strengthens brands
  • Streamlines processes
  • Takes expired products out of the supply chain
  • Enables scalability

How Product Serialization is Accomplished

Implementing product serialization is a little bit more complicated than simply putting a new barcode on an item. Labels must be uniquely coded, but they must also be remotely trackable at every stage of the supply chain to enable all of the key benefits.

RFID tags are added to products before distribution to make them scannable throughout the chain of custody. The information read in the scan is recorded into a supply chain management database, a cloud-based, online system powered by blockchain technology.

Each time a product changes hands, it is scanned. Its physical location is recorded, and a trail is created, giving brands complete visibility into how it arrived where it did and, ultimately, giving them valuable insight into counterfeiting or other questionable activity.

The Technology

RFID technology is well-established in retail, manufacturing, logistics, and supply chain operations. Since the 1950s, RFID has been leveraged in the military, for theft prevention, fleet tracking, tagging and tracking endangered animals, and much more besides.

Today, RFID tags are paired up with internet of things (IoT) sensors and analytic software platforms to deliver detailed insights to companies wishing to reduce costs and improve operational efficiency and accuracy. In recent years, blockchain technology has entered the landscape, taking accuracy and fraud prevention a step further by ensuring the data trail is unalterable.

The more granular the details collected, the more efficiently a company can respond. If there is a need for a product recall or if there is a question about an item’s provenance, such information is instantly available, on-demand.

The Data Advantage

Data collected from serialized tags give companies unparalleled insights into the product journey from floor to shelf and sometimes beyond.

However, the full benefits cannot be realized unless all trading partners are exchanging serialized data. Since manufacturers are the ones who establish serial numbers, they would be the logical first link in the chain. Once the product arrives at its next downstream location, data is exchanged again, and so on.

With serialized traceability of consumer products, returns are minimized, and consumer confidence is assured.

Data Sharing is Essential to a Successful Implementation

When data is decentralized, as it is in a blockchain database, silos between points in the supply chain are removed, making it easier for companies to assure quality despite an increased reliance on distributors and carriers who will, at times, have control of a brand’s products.

In a blockchain database, the information is available to all, resonating throughout the supply chain, and assuring standards are met every step of the way.

However, without standardization of equipment and infrastructure, making the most of the data collected can be a challenge. For this reason, integration is difficult as small errors and system failures can produce duplicate tags and put data integrity at risk. Chip-based serialization eliminates this concern, but again, it is the onus of the manufacturer to provide that data.

Engaging the Consumer

For companies who are experiencing scale or expanding into new markets, serialization provides a way to leverage all the business benefits of the technology while engaging customers in the process.

As the counterfeit industry gains ground in online retail, manufacturers who can assure their audience of authenticity and sustainability are ahead of the curve.

QR codes on the product tag facilitate the customer’s need for more detailed information such as serial numbers (do they match the number on the product itself?), product verification, warranties, and more, the factories that produced the components, and the names of the people who assembled them.

For foodstuffs, especially fresh foods, meats, and vegetables, traceability is top-of-mind for many consumers. Knowing things like how an item was farmed and even the day it was harvested helps people make informed choices to satisfy health needs as well as personal ideals.

Many sources suggest that consumers prefer to buy from companies who meet their informational needs and will even spend more for this service – yet another reason why serialization and traceability is an essential strategy for business growth.

Key Takeaways of Serialization and Traceability Concepts

In conclusion, serialization and traceability are methods by which companies can reduce costs, streamline processes, improve efficiency, and gain transparency into their supply chain. Well-implemented, serialization is a strategy that simplifies operations, supports scale, and helps you get your products where they need to be.

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Jim Donaldson

Jim is the Sr. Director of Corporate Communications at Mojix, Inc., a leading provider of ITEM LEVEL intelligence solutions to the retail and industrial markets. Jim has more than 30 years experience working for both start-up and public technology companies.

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