The many product tracking and tracing (T&T) projects already live or planned, exist mainly for legal compliance or product recall.
What has become gradually apparent from the projects that have been live with SAP OER for some time is that if you capture the time and date of the manufacture of a product and the time and date you ship to your end-customer, in your T&T database, you not only see where the product is and has travelled, but you can also clearly see how long all your products have been in each component of the Supply Chain. Meaning Costs in each component of the Supply Chain.
A more strategic approach to using all this data to add value to your Organisation other than just a tracking tool, can demonstrate a clear Return on your investment (ROI) by mining the data to reduce costs in Inventory, Sales and Marketing.
What to measure?
If you track every movement by RFID or barcode-scanning, the following measures or KPIs are worth considering:
- Multiply days in warehouse by your warehouse costs - pallet space, picked pallets etc. and you see the winners and losers
- Manufacture> DC> another DC> x-dock> another DC> customer>return days/time
- Analyse how long in the factory to leaving the factory
- How long on the sea, air or overland
- How long in one DC
- How long in the same Storage location
- How long between DCs
- SLOB stock visibility
These KPIs can expose launches and marketing “failures” more clearly, your forecasted volumes versus sold volumes and levels of promotional stock still in-stock and their throughput. T&T can help you to analyse the age and re-sale of your Returned stock whether damaged, not required or “sale or return”.
T&T data versus traditional data-warehousing
The traditional measures of Inventory have been static data; a snapshot at the end of the calendar month reported monthly and often out of date.
T&T measures are live data you can act on immediately; reported daily or weekly. With the ability to order online and deliver the following day, traditional measures and more importantly, reporting and action to address issues or problems must be immediate.
So in summary
If you have implemented T&T or are planning a project then it can be more easily sold to your Board if you are thinking about the future legacy data it will give you.
Think further than just another costly project you have to implement. If you are the IT team then include Finance and Logistics and your 3rd–party partners who warehouse and transport or distribute your products, to help form some thinking on what reporting metrics they might use. In truth, most 3PLs don’t want a warehouse full of dust-covered product however much they are earning for storing it for you; it doesn’t look good for visitors.
From all this captured data you can build a strategy and action plan to reduce Inventory or sell the slow-moving products. If you’re even more strategic what about including the Marketing team as well to say what reporting they’d like to see – even if some of the failures might be painful for them to see!
