It is basic for the supply chain professional the notion that integrated logistics can add values of 4 different natures for companies: financial value, time value, place value and, finally, information value. The focus of this text will be on this last dimension of value.
When making an online purchase, for example, it is very common to want to follow each step of the delivery process until the moment of receipt. This demand for traceability by customers increases every year, also driven by the gain in relevance of e-commerce within retail as a whole.
However, this valuation of information regarding the “path of a product” is not even close to e-commerce or retail. In the United Arab Emirates, a national medication tracking system called “Tatmeen” was launched, responsible for carrying out the “track and trace” of more than 1.2 million packages during its test phase. According to the country's health department, the system helps guarantee the quality of medicines in circulation and improves control over them, digitally connecting authorities, factories, distributors, pharmacies and consumers, in addition to allowing visibility of "where the package goes ” (tracking) and “where did he come from” (tracing). The diagram below seeks to illustrate the concepts of “track and trace”.
In addition to the pharmaceutical sector, the livestock segment, which is very prominent in Brazil, has also seen a greater need for traceability in its chains, due to the intensification of regulations and new safety protocols. For example, in severe cases of food poisoning caused by possible contamination of ingested food, it may be necessary to locate all units of that same batch to prevent them from being sold, if they are also contaminated. Tracing technologies will make this process viable and facilitate the identification of the stage in which this contamination occurred – whether it was in the cattle raising itself, in the processing/packaging of the food, in the distribution process or in later stages. But what exactly are these technologies? They can be divided into 3 main steps/functions and some of the most relevant alternatives will be discussed below.
Capture and Translation Technologies – has the function of capturing and transforming physical and real data (such as location, time, temperature, status) into digital data. Some examples of such technologies are:
Barcode and scanners: an optical representation of the data, usually containing some information about the object carrying the bar code. It should be noted that the bar code needs to be read by a scanner for the information to be captured. This technology provides an efficient solution at a low cost, but it has limitations as it requires a physical approximation (about 5 meters) between the reader and the object, in addition to each object having to be read individually, which demands more manpower. constructions. Finally, another limiting aspect is that the information contained in a bar code cannot be updated, but only read.
RFID: it is a system that uses electromagnetic fields to automatically identify “tags” that are attached to a certain item. These “tags” contain electronically stored information that can be passive (do not require energy) or active (demand energy).. Unlike bar codes, RFID tags can be read within a radius of up to 100 meters, simultaneously and in batches. In addition, this information can be updated throughout the chain, which enhances its applicability in different business models, such as the article developed by partner Maria Fernanda Hijjar. On the other hand, this technology is more expensive and may not work well on metallic and liquid products.
Transmission and Upload Technologies – has the function of moving digital information from a local source to a global/cloud system and this can happen in real time (continuous) or through checkpoints (discrete). Some examples of such technologies are:
EDI (Electronic Data Interchange): As the name suggests, it is an exchange of information and documents in standardized formats between computers. Used for over 30 years, this technology allows data to be transmitted in different formats (FTP, email, HTTP, etc.) and replaces the manual process of sending and entering data into the system, thus mitigating human errors. However, some points of attention must be highlighted, since the implementation may require changes in some company processes, in addition to incurring high costs (especially when the data translation process is outsourced). A limitation that may be relevant in some cases is that the submissions are not in real time, but sent in periodized batches (every x hours, for example)
API (Application Programming Interface): A set of definitions, protocols and tools for building a software application, which establishes defined methods of communication between components. It is comparable to EDI, but uses online, or cloud-based, protocols, and allows any system to communicate with another, without the same implementation and management challenges observed in the use of EDIs. It should be noted that APIs are generally not compatible with legacy/old systems. In addition, there are potential security and confidentiality ramifications of the data since it is cloud-based.
GPS (Global Positioning System): Continuous transmission of information about assets to a centralized platform, enabling their continuous monitoring, in addition to enabling the implementation of tactical contingency plans in real time, such as changes in route or routing.
Access Technologies and Applicability – has the role of providing access to and the ability to act on that information. Some examples of such technologies are:
SC Execution Systems: Based on conditional rules and information collected and transmitted to the system, it displays alerts suggesting actions. It works through a “detect-alert-respond-learn” methodology.
Control tower: Platform or centralized environment that captures data along the chain and displays it for monitoring by a team, preferably specialized. It is a service offered by several logistics operators and implemented in several industries.
These are just a few technologies that are available on the market on the subject of “tracking” and “tracing”. However, there are a myriad of other supply chain technologies being used right now and this survey developed by ILOS details a little better the degree of maturity of Brazilian companies in relation to existing technologies.
According to studies by Research and Markets, the expected average annual growth of the track & trace solutions market is 15% per year until 2026, when it should reach a level of 6.5 billion dollars. But what about your company, does it currently have the ideal “tracking” and “tracing” tools for the segment in which it is located?
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