the last word
The last WORD
Securing your profits By Neil Matthews
The retail environment has become increasingly competitive over the years. So as the UK’s recession finally comes to an end, it is more important than ever before for manufacturers to ensure their profits are secure as they travel along the supply chain to the point of sale.
T
Neil Matthews is Vice President of Northern, Central and Eastern Europe, Checkpoint Systems. For more information
his means that inventory control needs to be more efficient and measures need
to be in place to reduce the risk of loss through internal or external theft. The FMCG industry is at risk all the way along the supply chain, with desirable goods such as alcohol and packaged foods needing to be closely monitored as they journey to the consumer, to reduce the risk of loss, whether it be through theft or merely an error along the production line. And one of the influential methods that is available to manufacturers is source tagging. Source tagging is the process of applying a security label during the manufacturing process, ensuring that merchandise is protected throughout the supply chain and only deactivated at the point of sale. The process not only solves the issue of security for retailers, but it also ensures it is implemented in a way that it does not affect the packaging of the product. Using paper-thin labels, the security measures can be integrated virtually anywhere onto a product or within packaging, so as to not detract from its image and to ensure that all marketing messages remain prominent. Traditionally staff on the shop floor have been responsible for applying security tags to items, often with no regard for where they are placed on the
34 FMCG News
packaging. If done wrongly, this can cause serious legal issues for a company as information such as ingredient panels or age restrictions can be obscured. Also, this age old method takes up important staff time, which could otherwise be used more efficiently on selling more goods, plus it delays the speed-to market and most importantly can damage the brand identity. Numerous innovative technologies have developed to add value to source tagging, with radio frequency identification (RFID) being arguably the most influential. RFID technology is the use of a tag that can be applied or incorporated into a product at the very initial point of manufacture, for the purpose of identification and tracking using radio waves. Tags can be read from several metres away and beyond the line of sight of the scanner. Using an integrated circuit for storing and processing information combined with an antenna which receives and transmits a signal, the labels provide a technologically advanced system of tracking goods to maximise the speed to shelf, allowing manufacturers to maintain the integrity of a product’s packaging design. By integrating RFID technology into the source tags, products are not only protected from theft, but it is also possible to track the products throughout the supply chain, providing visibility and vital inventory information to retailers and manufacturers. Also, in a marketplace that competes so fiercely on cost, consumer packaged goods manufacturers and their trading partners must streamline distribution and optimise inventory levels whilst reducing theft and out
of stock scenarios. It has become essential to optimise the process of inventory management with innovations such as RFID labelling to help manufacturers, distributors and logistics providers comply successfully with RFID mandates, meet consumer expectations, increase inventory visibility and maximise their bottom line. In stores around the world, source tagging consistently reduces losses from shoplifting and employee theft, which is crucial in the busy FMCG market. Statistics from the recent Global Retail Theft Barometer prove that speciality foods, cooked and fresh meats, seafood and alcohol are extremely vulnerable items, with all of them featuring prominently on the most stolen list. This is a worrying trend in the UK, which ranks the second worst in Western Europe, and this only looks set to continue as the climb out of recession begins to stagnate. Although spend on security and loss prevention decreased this year, research shows that source tagging is the best solution on the market to meet the needs of retailers, as well as those of the brand owners. It effectively protects profits and the packaging image – after all, if a product is not on the shelf its not there to buy! By implementing RFID into source tagging, retailers can maximise the speed to shelf and security of a product, whilst maintaining the integrity of its packaging and design. The technology is fast becoming the number one choice due to its integrated benefits along the supply chain and the in-store advantages it delivers.■
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