Investment in real-time supply chain visibility is expected to increase in 2021, ranking as a top investment priority for 40% of supply-chain decisions makers. In this article, Nicolas Mordacq, Business Development Manager at Dentsu Tracking, compares some of the different technologies that are available for real-time supply chain visibility and how decision makers can reduce costs and complexity.

Real-time supply chain visibility

When investing in supply-chain transformation, decision-makers need to consider the cost and complexity coming from three supply chain areas: (i) the type of product marking (ii) scanning and integration on production lines and during distribution and retail and (iii) the quality of data integration.

The first cost comes from the marking on the product itself. Full visibility means that every product will require a unique product identity or product code (a data carrier, like a barcode) which can be scanned along the product journey to capture the product data.

The second cost comes from the integration and scanning. Production lines and distribution chains (transport, warehouses, retail venues) will need to be equipped with the right hardware to read the codes during the product events when being manufactured, aggregated, during transport and distribution, and so forth. It will be more costly and complex if a special device reader is needed, versus re-using existing supply-chain cameras or retail scanning devices.

The third cost comes from the data integration, and how this is planned into the end-solution. A real-time tracking and tracing platform needs to plan for data centralization enabling the right hardware and software compatibilities from the start.

What technologies enable supply chain visibility?

Supply-chain leaders need to make a choice between the technology that will be used to mark the product with a unique identification code, or data carrier. This data can be carried by a range of technologies, and these can all be retrofitted into the existing production lines, but the costs will vary especially between physical vs digital technologies. In general, there are higher costs with a physical data carrier because it needs to be integrated into the product itself, such as in the case of NFC and RFID. In contrast, digital markings (QR codes, digimarks, and digital fingerprints) can be provided at a lower cost.

How do RFID and NFC work for tracking and tracing?

RFID (radio-frequency identification) is a data carrier for supply-chain visibility that works with an integrated circuit and an antenna. Digital data encoded in the RFID tags or labels are captured by a reader via radio waves, and the data is stored in a database. RFID tags are either passive or active. Passive tags need to be “powered up” by the RFID reader before they can transmit data, whereas active tags include an onboard power supply (e.g., a battery).

NFC (near field communication, passive tag) is another option for supply chain visibility. It works like RFID but a printed circuit in a chip and applied to the product itself.

The big pro for both is that the data can be read in any position and even at a distance. They don’t need to be scanned with an optical scanner to be picked up. So, for example, by scanning a pallet, a company can capture all the data per unit inside. This ensures multiple benefits including efficient asset tracking, inventory management, anti-theft systems, accelerated check-out experiences.

The con is that these are physical chips, so they have a higher cost. An NFC tag easily costs several cents (for the label alone) not counting the integration into the product, so this doesn’t work for multi-million or billion items or SKUs in the product portfolio. Likewise, the reader device does need to be NFC / RFID enabled so there are equipment costs. As a result, most of the existing systems using NFC and RFID are deployed for pilots or limited-edition projects.

What are some alternatives to RFID and NFC?

Supply chain decisions makers can reduce costs and ensure more scalable solutions using some relatively simple solutions using digital markings, like QR codes, instead of physical chips. Traditional technologies like QR codes could be a very effective cost-saver for effective supply-chain visibility. New standards for compressed data (GS1 digital link standard) are now simplifying the printing challenges and complexity of large serial numbers, making it possible for any manufacturers to launch tracking and tracing at scale (read more here). Here’s a quick look at the relevant technologies.

A lot of companies are really surprised to see how much you can do with “just” a QR code, thanks to new processes for serialization.

Serialized datamatrix (2D code)

Datamatrixes are a traditional technology, that looks and acts essentially like a barcode. However, to drive supply chain visibility it needs to be serialized, meaning every product will have a single unique product identifier. The pro is that it’s easy to print and place (thanks to the small size, it doesn’t take space on the packaging) and of course it can be scanned by any standard supply-chain camera. However, the format does not allow for other integration further down the funnel. To integrate and allow any end-user consumer will require more complex or specific mobile applications. A solution to overcome this is via a serialized QR code.

Serialized QR codes

QR codes have evolved in the past decade and offer a low-cost alternative to drive supply chain visibility via serialization. Like a 2D datamatrix, the pro is that QR is low-cost and user-friendly – it can be applied on a basic packaging label or artwork, so the integration is very low cost. Basic supply-chain cameras can be used to scan products during the supply chain journey, or the codes can even be read via a basic smartphone camera. Today’s technology for reading QR codes is super user-friendly, scanning in one click with any type of device, camera, or smartphone. Overall, it’s a great option for low-cost supply chain digitisation that companies can action immediately and at scale.

The con is that the specific QR code image needs to be scanned (unlike RFID or NFC, where you can scan around the label, for example). It can still be used for aggregated or bulk scanning, but only with a step to aggregate the codes during the production.

What are invisible markings (digital footprints / watermarks / digimark)?

Invisible digital markings are another technology option. This technology does not require any barcode or QR code. Instead, it uses a serialized digital footprint or digital watermark (digimark) integrated onto the packaging label. The “invisible” digital footprint or watermark is added to the picture by adjusting the pixel values in the artwork design. It’s called invisible because this change cannot be seen by the human eye, but it can still be picked up by a camera or scanner.

The pro is that the marking is invisible, so it can be repeated across an entire artwork label, essentially making the whole label scannable. Like any digital marking, the serialization process means that all the data is in the marking so there is no need for multiple or additional barcodes. This offers accelerated supply-chain scanning or check-out experiences because you can scan the product “anywhere”. And like a QR code, it’s scannable with any standard device reader (smartphone, supply-chain camera) to ensure data integration. The con is that it is more expensive because of the more complex design work required to create a serialized and therefore unique footprint for every single artwork, for every single SKU.

Accessing data intelligence

Beyond the technology choices, supply-chain decision-makers should continue how the technology is integrated and how they will need to use the data. Our advice at Dentsu Tracking is to insist on an end-to-end approach when planning for real-time supply chain visibility, with complex data intelligence planned in the initial costs to avoid surprises later.

Do you have a supply-chain challenge we can help with?
Contact Nicolas to learn more about these technologies to drive supply chain visibility.