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A product crosses many boundaries on its way from the manufacturer to the end customer; suppliers, carriers, distributors, warehouses, and retailers all play an important role in the journey. At each handoff, data about that product is keyed or scanned into new systems and interpreted in a new context. Unfortunately, while the pallet or parcel moves quickly, the information about it may not.
Many organizations have invested heavily in supply chain visibility tools over the past decade, and retail, manufacturing, and logistics organizations generally have at least some capacity to collect data. Even so, a third of today’s challenges stem from how frequently data is lost or disconnected as shipments move between systems and trading partners.
“Progress has certainly been made, and companies understand that visibility and traceability are very important,” says Liz Sertl, senior director, supply chain visibility at GS1 US, a global, non-profit standards organization. “But much of that is limited to their own internal operations, and they need to start thinking externally as well. Real visibility can’t happen without the exchange of data between trading partners.”
The obstacle, then, becomes interoperability. Different organizations use different systems and processes. As such, each may describe the same product differently. That leaves trading partners stuck with manual look-up tables and cross-reference documentation to reconcile inventory, even in the most straightforward exchanges. That disconnect shows up when analyzing scan data, with 70% of logistics operations reporting barcode readability issues weekly.
Data gaps create inventory management problems
Consumer expectations have complicated issues. Demands for faster, more reliable delivery continue to trend upward, but retailers can’t reliably promise one-hour or same-day delivery if they can’t see their inventory; B2B buyers have similarly run out of patience with long wait times and poor visibility. Establishing an accurate view of on-shelf and warehouse availability ties in directly with upstream visibility. After all, knowing what’s on hand is only half of the solution; the other half is knowing what’s coming.
When the inventory picture is wrong, costs compound quickly: extra carrying costs for safety stock or accidental overstocking, missed sales and lost customers due to phantom inventory and unforeseen stockouts, and higher claims, chargebacks, reships, and customer service costs from reconciling inaccurate shipments.
Sustainability is a data governance problem
Organizations often frame sustainability as a corporate value or public perception exercise. Underneath it all, however, sustainability is a data governance challenge, especially as Extended Producer Responsibility (EPR) requirements require granular data about products and packaging for compliance — and the challenges don’t stop there. Each state with EPR laws in place also has different reporting requirements, so gathering the right data for one doesn’t necessarily ensure compliance for another.
“Consider a bottle of water,” Sertl says. “There’s the plastic bottle, the label, and the closure, which itself may be two or three different pieces. Each component has a material composition that has to be identified and reported. Sometimes in pounds, sometimes in grams. Organizations need to have that very detailed level of master data; not just what the bottle weighs, but all of its pieces and parts.”
Once organizations collect and organize that data, they must also govern it. If anyone can go into the system and change the bottle's weight or measurements, the wrong information could be reported, leading to higher fees and penalties.
Scope 3 emissions have the same problem, but at a much higher level. The underlying information required to report on them sits entirely outside the company’s four walls. With standardized product data, information exchange across partners becomes simpler and more manageable, and Scope 3 reporting can be based on facts rather than a collection of assumptions, estimates, and educated guesses.
A common, shared foundation
Data gaps and sustainability compliance ultimately share the same solution: a scannable connection linking the physical product to relevant, up-to-date, and accurate data. Providing this connection requires multiple things to be in place:
- Using 2D barcodes and/or Radio Frequency Identification (RFID) to capture packaging and product data at the component level.
- Tying products and components to the correct identifiers, such as Global Trade Item Numbers (GTINs) and Global Location Numbers (GLNs).
- Tracking product data in a standardized format, such as EPCIS, as it moves between suppliers, manufacturers, co-packers, retailers, consumers, and waste management providers.
This capability wouldn't have been possible even five or 10 years ago, mainly because brands consider label space precious and don’t want to overcrowd it with information about material composition or component sourcing, but also because most of that information lives in siloed databases. Now, however, the label only needs to carry a single scannable 2D barcode that can point to the rest of the information.
“It unlocks so much potential,” says Sertl. “First, it creates a persistent digital identity for the product that links every stakeholder to a wealth of information about it. Go back to the bottle of water example: it could say where the water came from, the plant where it was filled, all the EPR information, and even consumer-focused information from the brand. It allows information to be shared across the product lifecycle, which opens opportunities for traceability and transparency that weren’t possible before.”
The result is that every stakeholder along the product journey gets what they need: inventory data survives every handoff, each stakeholder gets the documentation they need for compliance, and all of that data reaches the end of the product lifecycle for proper recycling or waste disposal.
While many leaders place an outsized focus on technology investments to improve supply chain visibility and meet the goals mentioned here, technology without strong foundational data typically can’t deliver as much as buyers hope. That’s because technology is only one part of the equation.
“Having more data isn’t necessarily better visibility,” Sertl says. “You need to be able to talk to your supply chain partners and share that information. That’s how you can really unlock value.”
Effective visibility starts with trusted product data and a shared approach to exchanging it across the supply chain. Once that is in place, organizations have the foundation they need to achieve real ROI from visibility technology investments.
Ready to improve supply chain visibility? Learn how standards-based product identification and data sharing can help create a more connected supply chain.
