By Nancy Appelquist, Entira
[This excerpt is taken from an article I recently wrote for the Entira newsletter. See this link to read the full article, “Speaking a Common Language on the Supply Chain”.]
The night of the [winter Olympics] women’s mogul skiing event, I settled in with my popcorn and watched the competitors bump their way down the course to see who could make it to the finish line with the fastest time and stay upright after performing their aerial maneuvers. And I couldn’t help but think how much it reminded me of what it’s sometimes like to move product along the ag value chain—there’s always a way to get from point A to points B, C, and D, but it’s not always smooth. …As I’m watching Lindsey Vonn glide down the twists and turns of the slope at 80 mph, I’m thinking, “This is what it could look like in the ag value chain if we all spoke the same language so we could communicate better.”
One variable that causes frequent hiccups along the supply chain is the naming conventions organizations adopt to identify products in their systems. Most manufacturers have their own set of proprietary product codes (SKUs) that they use to identify their products. As those products are moved through the distribution channel each trading partner potentially has their own set of SKUs to identify those products as well.
So when product XYZ leaves the manufacturer, it often takes on a whole new identity once it enters the distribution channel. And it may take on yet another ID when it lands with the retailer. This causes headaches when trying to backtrack because the numbers don’t reconcile and therefore each entity has to hunt information down and translate the codes for each other.
But imagine if product XYZ kept the same unique identifier from the time it originated with the manufacturer to its final destination with the grower. Things like rebate processing and product exchanges would go so much more smoothly. Sounds like a fantastic and simple idea, right? But it’s more than just a good idea. Universal adoption of unique identifiers is essential for enabling companies to trade information electronically up and down the value chain.
To make shipping, storing and sharing information simpler along the chain, the best approach is for trading partners to use the same identifiers when referring to a product. Otherwise, the chain is full of roadblocks and detours and other impediments that derail the process. It becomes fraught with confusion, errors, and inefficiency.
Having a unique identifier is like a GPS tracker combined with a social security number for your product. It follows a product for life and contains useful data and information about its history. It’s how you can ensure the right products are getting into the right hands in the right locations. Without it, your product can fall right off the radar.
E-commerce in agriculture must be more buttoned up, for many reasons. First, increasingly complex operations require us to be more efficient in the way we conduct business. Second, you have consumers’ growing interest in where their food is coming from, strict regulatory requirements and building market pressures—all requiring more transparency and traceability. Finally, tracking products with unique identifiers could also be a way to make a dent in Big Data, because it streamlines product information. Without it, you have multiple entries of the same product and duplicate information being stored.
Overall, what unique identifiers bring to the supply chain is more efficiency, greater transparency and more sustainable best practices.
So why isn’t the use of unique identifiers widely adopted throughout the ag supply chain in this age of globalization? The industry is still lagging perhaps because implementation would require a serious upgrade and some trading partners aren’t yet compelled to justify the expenditure. The economy is tight and our system is working just fine, they say. Others might feel they don’t have the technical expertise or the bandwidth of their technical staff is already stretched to its limits.
But the investment is relatively small compared to the benefits that result —and it could mean the difference between bumping down a mogul track vs. gliding down the alpine slope maintaining speed and building momentum at every curve.
June Newsletter Home
See You Next Week at Prairie Meadows!
Implementation: New Case Studies Highlight AgGateway Success
New Member Profile: Yargus Manufacturing
Member Services: Take Control with the New Member Portal
Leadership Profile: Julie Benick
New Working Group Tackles Implementation Issues
Implementation: Glide to Gold with Unique Identifiers
Supply Chain Visibility on Returnable Containers
LinkedIn Group Topic: “What are your top 3 goals for this year’s Mid-Year Meeting?”