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December 18, 2014

The case for Online Grocery

 

 

Online retail is a very important channel today, on which every retailer is trying to gain a foothold. Giants like Amazon, Ocado, and Flipkart etc have established their online business and are trying to tap into a larger market share across the globe. Be it the retail or consumer products for new or used products, everyone wants to be on the web and doing business.

 The next big thing in the online business is Online Grocery. Online business has its own advantage on cost, but is it cost efficient? Grocery retailers today are striving hard to become unique in form of the service they provide, the range they carry or the omni-channel presence allowing easy access to the customer. But there is a definite amount of cost involved in being unique, which is a major concern for any grocery retailer. The margins are very thin and tight control on operating costs is required to meet the top and bottom line. However the buzz around going online in grocery segment remains a major thrust area in 2015.

Customer's wants are never ending and companies too are trying to satisfy them with innovative methods like click and collect, drive through, home delivery and centralized lockers, to service the customers and retain them, apart from the online offering.  There are retailers who have a physical store and also provide home delivery, drive through - these services win customers but they also mean additional cost for the retailer to manage these services. That's why online retailers have  a minimum cap of purchase for customers to avail these services.

Going online sets the retailer free from the real estate cost which occupies a major chunk of the P/L statement of any brick and mortar retailer. And added to it are other costs like power, human resources, shrinkage etc.

The advantage in the online grocery business is the use of limited manpower who could be trained to handle sensitive categories and make sure the product stays intact till it reaches the customer. Also, when a customer sitting anywhere, places the order, gets to pick it from a location near to his/her work place or home or gets it delivered, it gives enormous customer satisfaction, which is most important today. The only thing online retailers need to do is to market their services, try to reach all types of customers and make their supply chain efficient. Once the supply chain for home delivery, drive through and click-n- collect is in place, the online retailer can enjoy the cost advantage and scale up.

In conclusion, in having only a physical presence, there is always a limitation in targeting only the customers available in the catchment area. In an online business, the retailer has a better reach and the retailer can provide other services too, which improves customer centricity, apart from  benefitting both parties monetarily.

 

 

 

June 3, 2014

EDI Transforming Business Models

For most of us, EDI is a communication system to exchange formatted data between disparate applications, however it is time to realize that the technology has potential to deliver much beyond than what it was intended to. Since early 20th century commerce had seen industries leveraging the opportunities provided by Express mail and Telefax to grow network. Healthy and far-reached network implies smart way of handling goods and providing services, optimization of cost and labor, efficient processes and customer delight. Business growth, technological advancement, and ever changing customer needs demanded for more swift and complex information exchanging networks.

The growing concern was addressed by UN recommended EDIFACT and ANSI recommended X12 EDI standards that set to establish uniformity in business transactions defined for each industry or operation segment. The principal vision was to establish standardization and integrity of the business documents being exchanged amongst trading partners. However EDI proved to be a state of art technology in many areas starting from finance to processes. Following is an attempt to understand the way EDI has contributed to the evolution of many processes, creation of opportunities, and efficient management of resources in a supply chain.

 

Continue reading "EDI Transforming Business Models" »

April 24, 2014

Omni Channel Retailing -Are you prepared to win?


I wanted to buy a new smartphone and my brand engagement began with a Facebook recommendation from a friend who kept raving about his new possession, Galaxy S5. Interested, I googled the phone on my tablet, went to the product site to understand new features and also watched its video on You Tube. After reading expert and user reviews on CNET and exhaustive price search, I ended up buying it online from Best Buy, and picking up the same day at a store next to my home.

Today's empowered digital consumer has dynamic, non-linear shopping journeys.   They are demanding and have more power and choice than ever before. With rapid evolution in consumer buying behavior, emergence of new technologies and constantly changing competitive landscape, retailers need to rethink their business and operating model to stay relevant. As retailers transform, they will need to focus on 4 key dimensions to successfully convert an anonymous buyer to an engaged consumer.

  • Delivering consistent Consumer experience: Consumers expect the retailers to know and inspire them at every touch point, make shopping easy and convenient while valuing them for their loyalty, influence and life time value. For this, retailers need to know their consumers and their interactions across channels, engaging them early with inspirational content and easily searchable rich product information, providing access to enterprise wide inventory alongside personalized offers and flexible payment, shipping, and return options. Retailer will need to understand different paths to purchase and be there at every touch point to optimize the buying process.
  • Flawless Execution to match consumer expectation of product assortment, location, price, delivery and service. Retailers are taking on several measures to bring in agility in their supply chain. For example, leading retailers are now shipping products for online orders from stores closer to consumer to not only improve delivery time but also reduce shipping costs Retailers are also accessing social network data to refine demand forecasts and localize assortments. Retailers are leveraging predictive analytics to ensure inventory availability at the right place and time to minimize stock outs and reduce mark down.
  • Retailers also need an integrated, flexible and scalable digital platform powered by a common data set and technology services hub, ready to be tapped into from anywhere and any device. Such a platform will enable integration of business functions often spread across different departments and enable a single view of the customer, order, product information, inventory and price across channels. This foundation is crucial in driving consistent experience as consumers suspend and resume transactions across channels. This will also bring in increased agility to add new capabilities and onboard newer markets.
  • Last but not least, organization structure needs to align to reduce channel silos. Several leading retailers have created roles like 'Head/VP of Omni channel' as a step towards eliminating channel boundaries. Other retailers have reorganized by brands in order to deliver a unified customer experience across channels. Changes in the operating model also ushers in new processes, system, and shift in roles and responsibilities which needs to be managed deftly.

Omni channel transformation has a profound impact on an organization's value chain. Hence, it is imperative to have a clear vision and a multi-pronged strategy focused on consumer, operations, technology and change management to be successful. What strategies have you focused on to enable Omni channel? I'd love to hear your thoughts, especially challenges faced in transforming your organization.













 




    1. Continue reading "Omni Channel Retailing -Are you prepared to win?" »

      November 13, 2013

      See Your Customers In High-Definition

      Guest Post by

      Santhanalrishnan.R, Senior Principal, Infosys

       An old statesman once said that "all politics is local." The same could be said about retailing. We live in an exciting age - big box stores offer us every product under the sun in their modern, beautifully furnished outlets. Those chains have achieved admirable economies of scale and can therefore pass the savings on to their customers.

      When you take a closer look at each store - you tend to come to a startling revelation. None of these outlets is equal, beyond a point. They all have distinct inventory issues, consumer buying habits, and market vulnerabilities. Only when retailers realize that all stores are local will they get the data-driven insights for which they're constantly searching.

      As suppliers to the stores, Consumer Packaged Goods companies (CPGs) are one step removed from the customers who shop up and down the aisles. But they are an important element to the overall effort to achieve the best store-level insights. To many of us, "store level insight" means snapshots of data from the sales force or the sharing of data from retail customers. Other conventional sources of retail insight might be syndicated point-of-sale scanner data and consumer panel data, but neither of these sources is typically store level.

      Continue reading "See Your Customers In High-Definition" »

      February 26, 2013

      Foreign players in Indian Retail - When & How will the wait end?

      September' 2012 marked the opening of Indian retail sector to foreign players with government of India announcing upto 51% foreign stake in local ventures. The approval provided by government is however, guarded by stiff investment restrictions and mandatory local sourcing guidelines. Even post the passing by of more than four months since, the Government is yet to receive a proposal from any of the global majors to mark their entry in Indian arena.

       

      But are the government laid guidelines the only roadblocks hindering free flow of foreign players? A deeper analysis into Indian customer's mindset brings out interesting consumer behavior patterns.

       

      A typical Indian customer is heavily dependent on "Convenient" local mom and pop stores (Kirana) on account of the

      • Personalization of services - the familiar Kirana owner would be aware of consumer's preferences, requirements in terms of brand & ordering frequency.
      • Local credit facility offered by the stores
      • Flexibility in terms of conditions for product exchanges & returns is immense and can't be matched by organized sector.

      It is for these advantages catered by mom- pop stores that the sole survivors in Organized retail are price- point players like Big Bazaar, Star Bazaar, etc. Other Players which are non-price-point players  have been faced with losses which is depicted by the fact that many of these chains have had to shut down their stores.

      A little market research and insight into the positioning of the key retail players which can mark the true onset of FDI in India, the factor which stands out as the key deciding factor in MNC's India entry is:

      Right Local partner:

        • The local partner should be the one which has the correct understanding of the pulse of Indian consumer, their needs & purchase behavior.
        • The local partner should be familiar with local market rules, regulations & should have expertise in warding off the key challenges Indian market offers (Red- tapeism & Supply chain weaknesses)

      Its only after the finding of the Right local partner that the below mentioned factors would come into the picture. Of course the below mentioned areas would be efficiently handled in liaison with these partners.

      G-Localization:

      The much used internationalization concept can't be adapted in a better manner here than anywhere else. It is of prime importance that the global giants realize the difference in Indian consumer psyche whereby there are fundamental differences from the western strata. The concept of deep freezing, ready to eat meals, selling of fizzy drinks in crates are still limited in terms of adoption. It's thus, of prime importance that the product reinvention is done post a detailed market research.

      Brand recall and Store placements:

      While all the three biggies mentioned above are extremely popular with Indian educated elite class (thanks to their exposure to global markets), this might not be sufficient to entice the major business driving chunk. Further, stores such as Wal-Mart operate as destination stores. The physical distance of the stores from the buying population/ city hot-spots and brand familiarity has to be directly proportional. Without some unique positioning & attractive propositioning, destination store model wouldn't be a success in India.

      Human resource retention:

      Staff retention in Indian retail sector is another challenge global retailers would have to combat with to effectively penetrate India.


      It is only after the foreign players have a well drafted plans addressing all these issues that We the common Indian consumer can finally see the opening of FDI in Indian retail in the truest sense.   


      September 30, 2012

      "Mobile Apps For Faster Shopping Sprees"

       "Google Indoor Maps" has opened a whole new opportunity to retailers whereby they can enable their customers in getting easy and quick access to the products that they're looking for. In brief, "Google Indoor Maps" allows a person walking inside a store to navigate his travel within this indoor location just like what she(/he) would have done while driving a car using a GPS

      Integrating these maps with Retailer's own mobile application (app) and tagging a store's aisles by "Product Categories" on these Google Indoor Maps for a large format store, going down to category of products available by Brands may be just the beginning of the thought as to how Retailers allow their patrons to directly reach out for the product that they are looking for rather than wandering through store departments or searching for a store associate which for some shoppers may be time consuming or even frustrating.

      One of the best supporting feature on Google floor maps, is the ability to guide the user by individual floor's plans, whereby a large multi-level retail stores can also be covered easily and therefore we feel that some of the immediate exploits can be in the large scale Store or say Super Store

      Let us try to understand how one such Retailer app may make the life a Retailer's clientele much simpler and the shopping experience much better. Assume the scenario that our loyal Customer "Louise" is entering such a Large Super Store for her weekly purchases which runs across several departments of the store like fresh produce, dry grocery, apparel, cleaning supplies, bath-ware, electronics, sports goods and the list goes on. Soon after she has parked at the store, Louise logs-in to the Retailer's own native Mobile app on her smart phone. The Retailer's app upon invocation on her smart phone, detects her geographical location and the store that she is visiting today via Location Based Services (LBS) wherein this specific store's latest tagged maps can be pulled and displayed on Louise's phone's screen

      To make the whole shopping trip faster, Louise has keyed in the shopping-list beforehand in the app and a route map is prepared for her upon her check-in into the store via this app. This route map is based on the latest movement of shelves/racks in the store.  Such a guided walk cuts down the Louise's walk through the aisles a short, easy and a confortable one

      Louise was looking for a shirt for her son, but the size small does not appear on the shelf today... does the store have it? No problem... the check would be a quick one by Louise quickly getting to know this via her mobile app. Moreover, if it is not available in store right now, the app prompts her with an easy and quick site to store order which she can pick up during her trip next week 

      Another use for this app+google maps eco-system can be to integrate with the floor maps and publish current vacancies/next available time slots/expected wait times in Large Store's sub stores like ophthalmologist shops, saloons etc.

       

      This Large Super Store's sub stores are very frequently publishing a status of a vacant customer spots/seat available or unavailability of the same on the floor map which when viewed by Louise, will give her an idea whether she needs to do the shopping first or go to the sub store for a quick visit to the hair salon

      While these are just some of the initial thoughts, when pursued actively this specific technology can be utilized in umpteen ways to boost the store sales and to guarantee customer satisfaction. Overall, sky is the limit when one starts documenting the concept of such a solution/product. Customer purchase/return history and loyalty points can be utilized to highlight offers/deals when customer is approaching a specific aisle or when she has been looking for a specific product for some time

      This article has been contributed by Ashutosh Kaushal - Senior Consultant (Sterling Commerce - Infosys Ltd). You can reach Ashutosh at Ashutosh_Kaushal@infosys.com.

       

      Cashing in on "Order to Cash" through BPO shared services

       The Order to Cash process is at the heart of every business and I have often been tasked with asking clients and prospects to consider moving their Order to Cash processes into a Shared services delivery model with a third party service provider.  Over the years this attempt of mine has evinced myriad expressions from clients ranging from the "Have you lost it?" look to the "You just showed me business process nirvana" look. The industry where I experienced the most contrasting reactions was the CPG industry and I wanted to share some interesting learning from the experience of working with a few clients in walking the talk and sharing in their Order to Cash transformation journey over the years.

      To provide some context, the concept of Business process outsourcing in the CPG industry is not a new one. This industry was one of the earliest adopters of outsourcing transactional and back office business processes such as Accounts Payables, Accounts Receivables, Payroll processing and Procurement. The primary driver for outsourcing across all these processes was labor cost arbitrage followed by process efficiencies from consolidation; harmonization and continuous improvement. These drivers have become the cornerstone of all business process outsourcing relationships and have for long settled into becoming the marketing tagline for the BPO industry.

      With this legacy of perceived value from BPO relationships, when one has to go down the same journey with Order to Cash processes, the value equation does not necessary stack up. The most obvious reason for this skew in the case of O2C processes is Risk. To cite an instance provided by one of my clients - The entire annual cost savings delivered by a BPO relationship can potentially be eroded by one order from a large retailer being inadvertently dropped or shipped to the wrong address due to the contractual penalties involved. And one defect out of a million is acceptable even by "Six Sigma" standards!

      So two questions come up, the "Why" and the "How"? The "Why" is easy. Given that the Order to Cash process impacts not just the G&A metric but also the Cost of Goods Sold, Working capital efficiency, Days Sales of Inventory and Gross Revenue metrics, a successful shared services strategy undertaken by engaging the right partner could catalyze business transformation impacting the highest levels of the organization.

      The tough question however is the "How"? I often relate that to converting an "Art" into a "Science". The "Art" here refers to the finesse and proficiency that Customer service representatives have honed on their jobs for a number of years. The "Science" here refers to replicating that same level of service or sometimes even improving it but with a completely new team that's located thousands of miles away in a global delivery model.  Sounds like mission impossible right? Not really. It's been done before and involves the following best practices:

      ·         Create the right operating model: The tried and tested Front Office-Back Office model is a great starting point. It allows for a risk mitigated approach to the end state sourcing mix given the need to balance risk and value in a customer centric setup for the CPG industry.

      ·         Create the right performance measurement methodology: The days of adopting operational metrics such as cycle time, average handling time, Abandonment rate, First Contact Resolution etc to govern outsourcing relationships are a thing of the past. These metrics are now considered Business As Usual (BAU). Consider including business metrics and supply chain performance metrics such as cost per order/invoice, Case Fill Rates (CFRs), On Time Delivery (OTD), Truckload capacity utilization, Days Sales Outstanding (DSO) into the performance measurement framework

      ·         Create a segmented service framework: Most CPG businesses operate in the 80:20 model where 20% of customers account for 80% of revenues. Given this mix, a one size fits all shared services model will fail to deliver differentiated service experience to top tier customers. Consider a three tier service framework involving Transactional shared services, Business support services and Enterprise support services layers

      ·         Choose the right global delivery model: Most top tier BPO providers today have global presence with established Centers of Excellence. Adopt a hub and spoke global delivery model preferably aligned to customer tiers as well as the segmented service framework

      ·         Adopt a phased transition approach: A prudent transition plan is the foundation to successful Order to Cash shared services adoption. Consider creating a phased transition plan where phasing is based on customer tiers, markets, process complexity or a combination of these parameters

      While there are several other design considerations, the above five are what I could call the essential ingredients of Order to Cash BPO solutions for the CPG industry. With these best practices implemented, companies can start to cash in on their Order to Cash processes through BPO shared services led transformation.

      This article has been authored by Sushanth Ananth (Manager, Client Services - Retail, CPG, Logistics and Life Sciences, Infosys Ltd). You can reach Sushanth at Sushanth_ananth@infosys.com.

       

       

       

      July 31, 2012

      Paradigm Shift in Loyalty Card Programmes: Win-win for Retailers, CPG Brands and Customers

      Guest Post by

      Srinivasan Nithyanandam, Manager, Client Services for Retail,  CPG and Logistics - Europe , Infosys

       

      Battling slow economic growth and high costs in a difficult market, retailers are competing aggressively to increase their customer's wallet share and mindshare. The new breed of digital consumers, who want convenience, personalization, and promotion-based pricing, has made winning in this environment even more challenging. Operating within the tight confines of single-digit-percentage operating margins, retailers must continuously innovate to increase consumer foot falls and clicks. In such an environment, personalised offers, rewards, targeted communications and promotions can help heighten customer interest and encourage repeat shopping.

      Continue reading "Paradigm Shift in Loyalty Card Programmes: Win-win for Retailers, CPG Brands and Customers" »

      August 17, 2010

      Indian Retail-New distribution channel

      The concept of eliminating middlemen and in turn reaching out the bottom pyramid of the society has always been effective and has benefited all. So whether it be ITCs E-choupals or telecom revolution brought by the likes of Reliance and Airtel or even Air Deccan's cheap air line model, scale always brings in cost  effectiveness, better margins and expanded market for the company and at same time cheaper rates, better quality and access to variety for the consumer.

      Here is another idea in the market which uses the same logic in its heart and, I feel, has the potential to transform retail landscape.

      Business case:

      It's been an open secret that retail sector hasn't flourished in India as fast as it was expected. Some of the obvious reasons have been:

      i)              Network of stores like Big bazaar/Reliance Fresh etc restricted to bigger cities.

      ii)             Big retailers do not offer local brands which may be inferior to the ones they offer but are in demand due to higher recall value and brand loyalty.

      iii)            Heavy resistance by government in terms of allowing entry in retail format.

      iv)            Heavy resistance by kirana stores due to the fear of loss of employment.

      v)             Heavy rental costs associated with buying properties which pushes up operating costs.

      vi)            Tendency of customer to have touch-n-feel at their nearest kirana store before buying.

      vii)           With only 35% of the half a million-odd kiranas in India having an efficient sourcing system, it obviously means higher costs and lesser variety to kirana stores and in turn to consumers.

      Think about this-What if we combine the low manufacturing/sourcing ability of these big retail companies and combine it with huge network of micro finance institutions so as to offer products to kiranas which are cheaper (due to lack of multiple distributors), are of better quality and offer better variety to end consumer.

      Let's try to see in little detail what companies are trying to do:

      Big retail stores collaborate with micro finance institutions (MFIS) /banks and sources them products. MFIs in turn use their vast network to reach out to kiranas in not only cities but also in rural areas, get their orders, communicate it back to retailers via GPRS,  source it from retailers and delivers orders right on the doorstep of that kirana guy. What's more, MFIs by virtue of its identity offers such kiranas interest free credit!! This allows kiranas to go for bigger chunk of purchase thereby offering better rates. What do MFIs gain..?? They receive simple fixed commission from retailers in lieu of their services.

      The number of advantages it offers is limitless. Let's consider few of them:

      Advantages:

      i)              Peaceful coexistence between retailers and kirana stores.

      ii)             Gives retailers an immediate reach to bottom of the pyramid.

      iii)            An opportunity to understand likes and dislikes of rural consumer better.

      iv)            No heavy real estate investment which means low operating costs.

      v)             More variety of products to kirana stores and in turn end customer.

      vi)            Social touch by allowing kiranas to thrive instead of perishing out.

      vii)           Involvement of MFIs/banks and need of vast network mean more employment to everyone.

      viii)          Consumer takes all-more variety, cheaper product all at its own nearby kirana store.

      What started off with a pilot project in few retail companies has already caught eye of almost all the players. Though the concept is in its infancy stage and may offer certain hurdles but owing the potential and advantages it offers, it could be the next big thing in Indian supply chain.

      Apparently Bharti is already deriving quantifiable percentage of its sales from this mode of retailing. Other companies like Future group, Metro cash n carry, Godrej & Boyce too have acknowledged the business case and are running their own pilots before rolling it out on large scale.

      How can IT companies benefit out of it?

      More often than not every new opportunity begins on the business side; technology then complements it, makes it faster, easier and more efficient. Now we have an apparently new way to do business, technology can always seep in at various places and fill in the gap.

      Few examples that I can think of are:

      i)              Ensure efficient distribution from retail companies to MFIs.

      ii)             Retail practices must be new to MFIs. How can they ensure better sourcing, warehouse management, allocation etc?

      iii)            Faster order fulfillment at various stages (from company to MFI and then MFI to kirana store).

      iv)            Better margins at kirana level means ability to afford newer technologies like item scanning/RFID etc.

      Conclusion:

      Off late, we have realized the power of social networking websites which connect the urban elite and help connect millions across the world. In MFIs, by virtue of its huge client base, I see a unit which gives access to social network of rural India, and, in turn, open newer and profitable ways of doing businesses...businesses which have the potential to generate profits through the entire value chain and not just selective few.

      July 20, 2010

      RFID Middleware - Smart Devices?

      For any organization to adopt RFID (radio frequency identification), the biggest challenge is to integrate their existing enterprise applications with the data collected from RFID devices. Neither do these applications have the capability to hold and process EPC data, nor do they have the capability to communicate with devices and hardware. While the first issue of holding and processing EPC information is something that I've addressed in my white paper here, this blog is targeted towards discussing the issue of integrating enterprise applications with devices.

      This purpose of integrating existing legacy applications with RFID is enabled by deploying a thin piece of software called as the RFID middleware. Simply put, the job of the RFID middleware is to collect data from RFID devices, eliminate duplicate or junk data, convert the data to a format which the enterprise application understands, and feed the data to the enterprise application.

      The market for RFID middleware has been tapped by many players in the space, though it is dominated by product vendors who consider their RFID middleware as an excuse to sell more licenses of their existing products by making it dependent on their application servers, web servers, database servers, so on and so forth. Device vendors realized this to be a challenge for enterprises in terms of cost, and came up with an alternative - provide an embedded version of the middleware on the firmware of the device itself (making it a "smart" device) and let it communicate with enterprise applications directly. But is this a favourable approach?

      There are several returns of having an embedded RFID middleware, e.g., it reduces the TCO (total cost of ownership) because it is not dependent on any other licensed products like application-servers or databases. However, are there several drawbacks as well, for example, it over-burdens the device with additional processing responsibility, it doesn't allow filtering of duplicate data to be done across devices (since a middleware instance is specific to a device and can't access data from another device), and most importantly, it increases the dependency of the organization on the vendor - which is not a scalable strategy in the long run, especially for an enterprise which spans across multiple geographical locations, in each of which the vendor might not have presence and customer-support.

      Therefore, a more recommended approach is to use an RFID middleware which brings about the best of both worlds - the processing capabilities of a server-based RFID middleware and the low-cost, light-weight behaviour of an embedded middleware.

      I've done more in-depth analysis of this in a technical view-point which was published on RFID Journal under "RFID Expert Views", accessible here. It provides more insights into some of the unforeseen challenges that an embedded RFID middleware on a "smart" device might bring about for an enterprise. If you have any thoughts to share on this topic, I'd be glad to take your comments on the same.

      April 6, 2010

      Digital Signal Repository: Will it usher in Retail Utopia

      The latest buzz word in Retail Enterprise systems is Digital Signal Repository, DSR. Is this another passing fad or is it worth the investment in time, money and resources.

      Continue reading "Digital Signal Repository: Will it usher in Retail Utopia" »

      February 25, 2010

      How do we obtain Traceability - Part 2

      In my earlier post (available here), I had raised a few points regarding how we can obtain traceability across the supply chain using RFID (Radio Frequency Identification). I would like to thank everyone for the overwhelming response received in that post. In continuum with the same, I have published a white-paper on the topic "Supply Chain Traceability with RFID and SAP" (available here), in which I have elaborately discussed a viable solution for realizing Track and Track and Trace in the supply chain by the use of an EPCIS (EPC Information Service)-certified repository.

      Based on the EPCIS standards, there are several compliant products available in the market which can be used as central repositories to store and maintain RFID information. Through these repositories, existing applications such as WMS systems can obtain relevant EPC (Electronic Product Code) information whenever it is required, e.g., while commissioning or creating ASN (Advanced Shipment Notification).

      Most of these products provide standard interfaces for posting data to them, for querying them for information and for managing EPC serial-numbers (e.g., HTTP, HTTPS, web-services) via standard integrators and EAI (Enterprise Application Integration) tools. Through these interfaces, it becomes very easy for all trading partners in the supply chain to post or retrieve RFID events on a real-time basis, thus allowing every RFID-tagged object (like a pallet or a case or a cart) to be tracked with a greater amount of granularity and accuracy, and providing information pertaining to its complete life-cycle.

      A lot of organizations have got acquainted with RFID by using proprietary technology provided by vendors, and in many of these cases, the third-parties (vendors) also host the information for them. In certain cases, the dependency on vendor-hosted applications and repositories is to the extent that critical business functions like commissioning and creating ASN (advanced shipment notification) are done by them. While such solutions have helped jump-start the adoption of RFID, they are not scalable in the long run because they impose a lot of dependency on the vendor and they lack standards, thereby implying lesser integration with a large number of existing systems or with trading-partners. Deploying a central repository which is compliant with EPCIS standards goes a long way in eliminating the dependency on vendors, ensures that critical information related to the business processes of an enterprise remain within its systems, and also allows for seamless data-exchange with trading partners using industry-standard mechanisms.

      For more information on this, please refer to my white paper whose link I've provided above. I'd like to hear your thoughts and opinions too - please feel free to post your comments about the same here.

      January 18, 2010

      How do we obtain Traceability?

      Are you part of a CPG company trying to comply with mandates from retailers to start tagging pallets and cases with RFID (radio frequency identification), and seeking to formulate strategies to derive value out of the investment? Or are you a big-box retailer who has mandated suppliers on RFID but are still looking forward to devising means of obtaining end-to-end traceability? Or do you belong to a container-pooling organization worried about the visibility of your assets across the supply-chain?

      Very often, it has been seen that not all the supply chain players that deployed RFID in their business processes have garnered its promised benefits. Some of them faced challenges where there was not enough ROI (Return On Investment), no end-to-end traceability, and no value-addition. In order to realize the true potential of RFID, it is indispensable for organizations to enable business processes across the value chain and provide end-to-end traceability by capturing information throughout the life-cycle of the RFID-tagged assets or products.

      A lot of questions pop up in the mind as to which is the right way to go forward with a complete RFID deployment, especially when it comes to maintaining the EPC (Electronic Product Code) data. Traditional WMS (Warehouse Management System) or ERP (Enterprise Resource Planning) applications are not designed to hold EPC data, especially at case or sales-unit levels. Should we go ahead with a third party vendor-hosted repository which is completely disconnected from our ERP systems but holds our information, or should we modify all our existing WMS/ ERP systems to process and maintain the highly granular RFID data? Is there a better approach that can streamline the processes in our WMS systems by enabling them with RFID as just a new technology similar to barcode?

      I will add more details about this in my subsequent posts as to whether there is an EPCIS-compliant and standard way of solving this problem around Track and Trace. Meanwhile, if you have any experiences or thoughts to share on this topic, please feel free to comment and let me know.

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