REUSABLE CONTAINER MANAGEMENT & TRACKING

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1 REUSABLE CONTAINER MANAGEMENT & TRACKING Why And How To Evaluate An Asset Tracking Program An asset tracking program offers a number of advantages. From increased supply chain visibility to reduced transportation and production bottlenecks, a strategically engineered tracking system can play an essential role in improving efficiency and reducing capital expenditures. However, for companies who do not currently use an asset tracking program, some potential roadblocks may stand in the way of implementation. When working to build a tracking program that aligns with your company s core competencies and objectives, it is critical to establish a plan which will address key stakeholders priorities and objectives. This white paper is the first of a two part series on Reusable Asset Management and Tracking. In addition to closely examining the importance of stakeholder alignment and process change management, this paper offers a detailed analysis of all available asset tracking methods and systems. Common stakeholder concerns and objectives to consider: Are the employees of either the supplier or end user resistant to change? Perhaps they have outdated manual inventory systems or container management processes that they believe will be difficult to change. Will all partners along the supply chain comply with a new tracking system? Does the filler have a current container supplier that provides a sufficient tracking service? If not, is a new supplier required? What challenges will that change present? Is executive leadership tech savvy enough to support this initiative? If not, what is required to prove that a new tracking system is worth the buy-in? Top down as well as bottom up stakeholder alignment (people on the floor have to see the value of the technology so there is compliance) Two Important Considerations: Stakeholder Alignment and Change Management Before implementing any asset tracking program, it s essential to provide your stakeholders with the information they need to evaluate and choose the ideal program. Careful examination of key stakeholder concerns and priorities helps ensure the implementation of a strategy that aligns with your company s core objectives.

2 Communicating asset tracking advantages: While stakeholders may each have their own set of objections, effectively communicating the advantages of asset tracking will help guard against any future concerns. Advantages of implementing an asset tracking solution include: Higher supply chain visibility The ability to identify and eliminate bottlenecks The ability to assign accountability for container damages (bill-back accountability) Saving money on assets that would otherwise have been lost (reduced CAPEX) Meeting regulation compliance (e.g. HACCP plans under FSMA) The ability to track your product s state and location along with the container Identifying common stakeholder misconceptions: Take note, it is possible that each stakeholder has already formed their own opinion an opinion that can be filled with any number of misconceptions. Here are some common asset tracking misconceptions and how to counter them: Tracking our assets will be costly Implementing a new tracking system does require an initial investment. However, the ROI gained by improved efficiencies and reduced long-term capital expenditures often outweighs these initial investments. Implementing a new system will be a highly manual process There will always be a learning curve involved with any new system, but in general, the solution should offer long-term labor savings. Our employees won t keep up on compliance With any new system, user adoption can be a challenge. This can be overcome with a well-planned transition and change management strategy that aligns with every potential roadblock. This will just be another gadget piled on us Some may argue that a tracking system adds the complexity of integrating multiple technologies, such as phones, laptops, tablets, etc. The good news is that there are a number of available tracking methods, each varying in complexity, and one is sure to match your needs.

3 Aggregate Versus Individual: What Type of Tracking is Best for Your Business At a high level, there are two kinds of tracking systems: Aggregate Asset Tracking and Individual Asset Tracking. What is the difference? Aggregate tracking records net amounts, while an individual system tracks and records each asset. For example, an aggregate system considers one truck delivering 2000 containers as one transaction with a quantity of An individual system tracks the above as 2000 separate transactions, each with a quantity of 1. Aggregate tracking uses visual label tracking to determine the net in and out. While it is not as accurate as individual asset tracking, it offers the potential to be more cost effective. Individual tracking uses barcodes and RFID (both active and passive) along with GPS data to track assets. The downside is that it takes longer to implement, and it often requires more complexity when compared to aggregate tracking. Aggregate tracking systems tend to work better for supply chains that are smaller and less complex in nature, while Individual tracking systems become necessary as the complexity of the supply chain increases. The Characteristics And Advantages Of: AGGREGATE TRACKING: This is typically a manual process Ranges from a single worker with a clipboard to spreadsheets updated by multiple parties Lower cost, which is a better fit for smaller, less complex supply chains Commonly used for very high volumes of low value assets INDIVIDUAL TRACKING: Allows for an automated process Built to accommodate multiple suppliers or end-users Built to accommodate multiple container types A great match for higher value fleets or reusable assets

4 Assuming that the complexity of your supply chain calls for the adoption of an individual tracking system, you must now decide what technology would best fit your business needs. Individual Tracking: Which Method to Choose? Within the scope of an individual asset tracking system, there are specific methods and technologies which you can evaluate. Below is a quick snapshot of the most popular individual asset tracking methods: The Barcode Method This familiar system uses handheld scanners for processing Linear/2D barcodes. Advantages Labels are inexpensive, and the IT costs are also low Barcodes work across all industries with no environmental limitations Ability to provide instant reconciliation Challenges Data management requirements Requires line of sight Requires hardware, with implementation and maintenance needs The Passive RFID Method Radio-frequency identification (RFID) is the use of an object applied to or incorporated into a product for the purpose of tracking using radio waves. Advantages Automatic data reading (curtain or fixed to forklift) RTI Tracking at individual level Lower labor than manual barcode scanning Passive RFID has a cost per tag that is lower than Active RFID Challenges Understanding and implementing new standards Susceptible to environmental elements (liquid, steel) Manually intensive if using limitedrange handheld readers Higher equipment costs relative to Barcode Scanning Security risks

5 The Active RFID Method This is essentially the same technology as passive RFID, except the tag can send out information, rather than waiting to be pinged by a scanner. Advantages Extended range (up to 400 ) Less manual labor than passive scanning More storage capacity than passive Advanced monitoring (motion, temperature, etc.) Challenges Expensive tags and readers, with high installation costs Regionally placed readers (RTLS) Limited tag life 3 to 5 years The GPS Method GPS features a variation of Custody of Individual Containers: Features Periodic transmittal of geographic location to satellite and global tracking system Roll-up of individual tracking events into higher level groupings Tracked through GPS on transport vehicles, with options for: GPS position sensors Relay of position through cell phone networks Global Tracking Use Cases Security (high value shipments) Temperature monitoring (perishable or fragile goods) Isolated long-term storage (military or large construction projects)

6 Tracking Management: In-house or Outsource? Once you ve selected the system that best aligns with your needs, the question becomes: Do you want to create the system in-house? Or, would you like someone else to implement and manage it for you? Managing your asset tracking in-house: Managing individual asset tracking in-house is only recommended if it is within your team s core competency. While it is highly customizable, implementation times can be long and costs can be high.. If your team does not have experience in tracking, this option may not be the most effective. Pros: Recommended for strong core competancy System ownership - no ongoing fees Highly customizable Cons: Longer Implementation Higher development costs Required system support and maintenance Outsourcing your asset tracking system: This is absolutely essential if your in-house team does not have the expertise or time to build and manage a tracking system. Initial set up costs are lower, and you will be up and running in less time, however with this options you will incur monthly fees (SaaS) and you may face some limitations in regards to customization. Pros: Recommended if not core competancy Existing functionality tried and tested Lower and scaleable costs Shorter implementation System support and maintenance typically included Cons: Ongoing monthly fees No ownership of system Customization limitations Evaluating Your Asset Tracking System: What s Next? By this point, you should have identified the following: 1. Which method you should select to effectively track your reusable assets 2. Whether you ll be doing this in-house, or utilizing an experienced asset management service specialist Once you ve come to these decisions, the next steps involve evaluating providers and implementing the solution. In Part Two Check out our 2nd tracking whitepaper to learn more about the process of implementation, including back-end preparation and the physical implementation of the system and how to prove ROI on your new system.

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