Track & Trace Solutions. Track & Trace: Turn Compliance Into A Supply Chain Value Proposition

Transcription

1 Track & Trace: Turn Compliance Into A Supply Chain Value Proposition

2 Executive Summary As Supply Chains become increasingly complex and demanding, companies need to deploy applications, services, and mobile solutions that satisfy many parallel goals. Companies must factor areas of compliance, product integrity, product visibility, and risk reduction, all while running their supply chain at full speed. This white paper is designed to provide an overview for businesses and leaders to understand the concepts of Track & Trace within the supply chain and some of the benefits that may be realized by improved product visibility, serialization and traceability. The information provided will enable you to best understand how Track & Trace is important for your organization, for SAP companies of all sizes and industries. This document is best suited for: Understanding the key concepts of Track and Trace within your supply chain Exploring benefits realized by improved product visibility and tracebility Reviewing the SAP Track & Trace solution overview and solution architecture Movilitas Page 2

3 Why is Track and Trace Becoming Increasingly Important? Product piracy is an increasing problem for businesses in the broadest range of industries. A growing number of companies are forced to confront piracy with measures such as serialization and Tracking & Tracing. Results from surveys show that nearly every second consumers consider counterfeiting as a serious problem, and nearly the same amount reported falling victim to counterfeiting. However, Track & Trace offers businesses far more than assurances against counterfeiting and piracy. The decision to serialize and track products on an item level opens up a whole new range of options and can provide real value added benefits for the business. For example, the transparency that is gained as a result can facilitate better control of recalls, loss reduction and the optimization of supply chain, marketing and sales strategies. How Does Track and Trace Work? Track & Trace differs from other brand protection technologies in important ways. Overt and covert technologies such as holograms, intaglio print, micro text, invisible images, and digital watermarks offer excellent solutions for authentication, but cannot distinguish individual items at a unit level and cannot carry or point to item-level data, something that is required for tracking & tracing. The key to implement Track & Trace is the ability to put variable data on item, case and/or pallet level (depending on the granularity to which items need to be tracked) and to trace these items through the supply chain. Radio-frequency identification and barcodes are two common technology methods used to deliver traceability. Typically a barcode or RFID transponder usually containing a combination of GTIN and serial number will be applied to items on the production line. In some cases there will be an aggregation of the products, related to the packaging hierarchy (e.g. item to case and case to pallet). Aggregation makes it easier to trace a bundle of items through the supply chain as only the ID of the pallet has to be scanned and therefore identifying all cases and items contained on the pallet. Once the IDs are applied to the products; all product related events such as produced, shipped, received, dispensed will be captured along the supply chain via scanning of these IDs with mobile devices. This captured information will be stored in a database (EPCIS) together with product related information from production such as batch, manufacturing date, expiration date etc. Movilitas Page 3

4 Authorities, consumers and/or supply chain partners can access this database to trace the origins of products or to find the status of shipments. For example, this can be done by taking a picture of the 2D barcode using a smartphone or entering the product ID in a dedicated website or search field of the database and querying the related information out of the database. From Serialization to Aggregation to Track & Trace To achieve full Track & Trace the typical approach is to start with serialization. Serialization means to make each single product unique by placing an item identifier on every single product. Typically the item identifier is a Datamatrix-Code containing at least the product related GTIN paired with a serial number. This way the product becomes the vehicle for carrying the information needed for Track and Trace and can be identified individually. It is also then possible to store further product related information in a database linked to this unique ID. Serialization takes place directly at the production lines and requires in most cases new printing and scanning technologies and software. The next big step after serialization is achieved is typically the aggregation. Aggregation is the process of building packaging hierarchies and storing this relationship in a database. If, for example single products get packed in a carton and these cartons get packed on a pallet, this relationship has to be recognized and stored in a database using scanning processes. Each new packing level, e.g. cartons or pallets, also requires a unique (serialized) identifier. Aggregation is a major step towards Track & Trace. The biggest advantage is that once the packaging hierarchy is built and stored in a database, it can all be found under the highest-level identifier (e.g. pallet). Following these principles of Track & Trace makes it possible to know at any point in the product s life-cycle, the following product related information: Who is the manufacturer of this product? When and where was it produced? When was the product shipped and received by certain parties? Where is the product supposed to be at a certain time? What is the expiration date of the product? Is the product ID known by the database? How long was the product in the supply chain before reaching consumption? And much more depending on the granularity of stored information in the database. Movilitas Page 4

5 Having this information in a database makes it easier for all parties such as manufacturers, authorities and consumers to: Separate a counterfeited product from a genuine one Increases consumer safety Check whether all taxes and duties have been paid Discover grey-market products Optimize the supply chain and logistics Gaining information about consumers and their behaviors Offering customer loyalty programs and avoiding abuse And much more depending on the granularity of stored information in the database. SAP s Track & Trace Solution Portfolio today SAP Track & Trace solutions enable product, part, component and asset traceability from raw material to the point of consumption with On Premise solutions. SAP Track & Trace solutions, that can be integrated, support product batch as well as item product/part serialized traceability, goods and assets in transit as well as traceability for process monitoring and compliance. Movilitas Page 5

6 Track & Trace Capabilities Product Genealogy Item Serialization & Product Traceability Links the genealogy of product batches, together with their relation to purchase order, production order and delivery references into a complete corporate batch traceability solution. Traceability into the Product (batch) genealogy can be realized with the SAP Global Batch Traceability (SAP GBT) Solution. Helps to ensure secure distribution of products, prevent and detect diversion and counterfeiting while complying with regulations and achieving full visibility of end- product whereabouts and condition over their lifecycle. Item serialized traceability can be achieved with SAP Object Event Repository (SAP OER). Goods and Assets In-Transit Improve transparency for goods in-transit, including raw material supplies, goods movements for production as well as the tracking of finished goods. This allows you to manage in-transit inventory by exception instead of monitoring processes that are already in control. Furthermore, allows tracking of assets/returnables as they move along the entire supply chain. Goods and Asset In- Transit is accommodated by SAP Event Management (SAP EM) and can also be achieved through SAP Object Event Repository (SAP OER). Procurement/Fulfillment Visibility Get transparency in your procure-to-pay or order-tocash cycles by using real-time status reports, which may span system or even company boundaries. This allows you to monitor procurement and order fulfillment with greater granularity than within your ERP system (e.g. by involving business partner information), and manage by exception instead of monitoring processes that are already in control. Visibility scenarios can be implemented with SAP Event Management (SAP EM), which also serves SAP Object Event Repository (SAP OER) as the core software component. Combining these solutions offers a wealth of capabilities that support your organization in improving operational efficiency, reducing safety stocks, complying with regulations, reducing costly fire-fighting and improving customer service to help you protect your brand. All solutions are offered with interfaces to SAP Business Suite applications. Movilitas Page 6

7 Beyond Compliance: Potential Benefits of Track & Trace Setting up an item serialization infrastructure from scratch is always very cost intensive and disruptive and most companies would only do it if they have very good reasons to do it (patient safety, compliance etc.) However, putting a Track & Trace infrastructure in place in addition to pure item serialization is even more disruptive and requires not only technology on the packaging lines, but lots of change management within the entire supply chain. For this reason, the Million Dollar question is always: how can we leverage our Track & Trace investment? Theft Stocks recalls Improved Recall Management Error free Pick & Pack Faster and partial batch recalls Shipment visibility & alerting 3PL performance management Inform patients better through e- leaflets & target Increase info customer loyalty through loyalty programs Value added service by T&T for customers Competitive Advantages Distribution to patients possible Customer consumption alerts/ monitoring Price Adjustments Avoid anticounterfeits Avoid consumption of recalled batches Avoid Brand Damage Waste Statistics (Intelligence) Avoid consumption of expired medicines Avoid waste to revert to Supply Chain Better Waste Management Reduce & stabilize lead time In-transit Inventory Updated planning process with actual lead times Optimized Inventory Multi-stage Inventory (safety stock) Potential Benefits of Track & Trace Visibility in Parallel Trading Better negotiation with Wholesalers Gain Warehouse performance KPI Improve Operations Process Standardization /harmonization Gain Production Performance As the reader can derive from the diagram above, there is no simple answer to the question. There are many opportunities to gain benefits out of Track & Trace, however which of those become real tangible gains strongly depends on the following factors: What are the process requirements in order to achieve the benefit? What are the data requirements? Movilitas Page 7

8 Want to Learn More... For more detail on SAP Track & Trace solutions, or for a full report on SAP Track & Trace, contact Movilitas for a personal workshop or to obtain a copy of the Movilitas Track & Trace Report. After collaborating in the past with analysts and groups in co-writing and co-sponsoring industry reports around Track & Trace, Movilitas decided to launch its own Track & Trace Report In The report aims to energize our ecosystem of customers and partners around Track & Trace in order to share experiences. The full report addresses the following: The report provides a breadth of information about functions and features of SAP Solutions for item Serialization, line systems, printing and mobile scanning solutions. Aside from an in-depth insight into these software and technology related topics you will also be provided with information about business benefits, standards, best practices and last but not least the results of an extensive survey. The full report documents a collection of experiences which Movilitas has accumulated in the past six years in the areas of serialization and Track & Trace. We hope that this is the most comprehensive compendium of Track & Trace with SAP Solutions and related topics available today. About Movilitas Consulting Movilitas Consulting, an SAP software and services partner, provides end-to-end SAP Supply Chain, Track & Trace and Mobility Solutions. Movilitas Consulting solutions enhance customers control of their extended supply chain, ensure compliance with global regulations and optimize field-based business processes helping to accelerate the pace of business performance. Movilitas Consulting Old Columbia Rd. Columbia, MD Phone: info.na@movilitas.com Movilitas Page 8