Labelling Solutions
Smart Labelling: The ‘glue’ for supply chains during times of inflationary crisis
B
ehind every forward-thinking omnichannel strategy, there are obstacles to overcome in each industry sector. Between Covid-19 restrictions and a struggle to recruit labour, supply chains have yet to recover their pre-pandemic levels of operation. Yet those challenges now feel insignificant when we review the bigger picture. According to global freight transportation experts Upply, ‘inflation is invading the entire supply chain’.
RISING LOGISTICS COSTS
While a major surge in demand for e-commerce certainly intensified pressure on supply chains during the height of the pandemic, the recent invasion of Russia into Ukraine has exacerbated the increase in energy prices, causing a considerable squeeze on resources and logistics costs. Across every country, inflation has risen steeply. In the Euro area, inflation rates were 5.9% in February, 7.4 in April and are now tracking 8.1% as of May 2022. In the US, inflation was already at 7.5% in January – now it is 8.6%.
Not only has this caused a real cost of living crisis, road, rail and air carriers that rely on energy are now forced to alter their transportation routes. For instance, air cargo now relies on a southern route from Asia to Europe, flying around Russia and Ukraine, resulting in longer flight times. While in container shipping, fuel increases are being passed to suppliers via fuel surcharges. This makes for a tense situation in road transport, which relies heavily on the manufacturing of transport equipment, whereby manufacturers are passing on the rising costs of raw materials. This state of play could cause companies to forfeit their business if it continues.
However, help is arriving. Countries like France have recognised the need for emergency aid with a government grant of €400m to the sector. While in Germany, fuel subsidies and discounted public transport were announced earlier this year to help consumers amid the crisis.
DATA-LED STRATEGIC THINKING Omnichannel retailers can no longer absorb inflationary costs within the supply chain. For example, Associated British Foods CEO recently said that ‘despite cost-saving measures… [we] would be forced to raise some prices this autumn’. While price increases at this stage are now a given, omnichannel retailers that lead with data-driven solutions can help to rebuild consumer confidence where it is needed the most.
For instance, research from Digimarc reports that 70% of consumers value being able to verify the authenticity of a product. Traceability solutions using RFID labels and QR codes now form a major part of a consumer’s purchasing decision, as they can easily enable tracking and the ability to access info about a product’s origin and its journey through the supply chain. Not only is this technology valuable to the consumer, it is also highly strategic for the retailer. Data-driven labelling solutions help maximise visibility in the warehouse and tighten inventory as products can be tracked by handheld or fixed RFID readers, freeing up staff from manual barcode scanning. Logistics costs can also be reduced too. By turning physical stores into fulfilment centres, retailers can use RFID tags to store accurate, real- time data of inventory in store to those shopping online. This enables retailers to ship the item from
the nearest store, reducing warehouse space and improving inventory turnover. Fashion retailer Zara for example has introduced RFID into its stores to do just that. By using RFID, staff can quickly determine a garment’s location in nearby stores through its product ID, improving the customer experience with faster order fulfilment.
SMART LOGIC
RFID is now signalling its importance in an omnichannel world – and businesses that take advantage of these label technologies are swiftly rebuilding consumer trust and brand loyalty back to pre-pandemic levels. As an auto-ID and labelling solution expert, SATO uses smart logic to power businesses on site, providing solutions that solve – rather than cause – vulnerabilities in supply chains.
By working with key industry players that champion RFID technology systems, we develop labelling solutions that support the new omnichannel world. This range of intelligent, accurate and robust RFID solutions are not only suitable for the most complex business environments, they have been proven to reduce labour costs significantly. With RFID, businesses can now streamline their stocktaking to locate items across the supply chain virtually in realtime, speeding fulfilment times, while preventing losses of expensive assets and equipment. When strategic thinking is instrumental to logistics and transport, smart labelling is now the glue that holds the supply chain together – and one that omnichannel must stick with and invest in to thrive.
Xwww.sato-global.com
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July/August 2022
www.convertermag.com
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