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The FMCG industry’s responsibility is no longer restricted to just ensuring brimming shelves; companies also need to comply with an evolving set of stringent regulations, ensure the products that reach them are of high quality and have been produced in a sustainable manner.
The abundance of new entrants, unexpected economic disruptions, supply chain volatility, and evolving consumer demands are compelling companies to take steps in being proactive to these trends. But finding the right balance between quality, speed, and an array of new requirements is no mean feat. Ensuring retail shelves (or even online sites) always showcase optimum inventory – based on current demand – requires real-time insight into where products currently are in the supply chain.
Any error can propagate wasted time, late deliveries, and lost customer trust. Therefore, companies must adopt track and trace solutions to deliver high-quality products to consumers while also reducing wastage, ensuring sustainability, and curbing greenhouse emissions.
One way to accomplish track and trace is by investing in modern traceability solutions that have the ability to trace the entire product lifecycle: right from the origin of raw material, through work-in-process, finished goods, and distribution to the end customer.
Successful implementation of traceability can result in increased business intelligence, faster on-time deliveries, higher customer satisfaction, as well as improved sales.
Let’s look at fivereasons why FMCG companies must focus on track and trace:
1. Improve inventory management: Embracing advanced track and trace solutions are a great way to improve inventory management. While tracking can help in capturing and maintaining a record of a product’s movement across the supply chain, traceability can help in unearthing which person or what system last had access to the product in question. By automating the complex yet critical tasks of tracking and tracing, these solutions can keep a real-time check on an item and personnel movement, ensuring retail outlets are never overloaded or empty. Since these solutions also integrate seamlessly with warehouse and inventory management solutions, they allow FMCG companies to exactly know where a product is and how soon can it reach the retail shelf. They also help in tracking missing or misplaced goods while enhancing the level of accountability and security, eliminating shrinkage due to theft, and minimizing the negative impact on the bottom line.
2. Curb counterfeiting: The rise of price-sensitive purchasing habits has caused counterfeiting to become a common challenge – especially in emerging economies – with reports suggesting counterfeiting to exceed $3 trillion in 2022 alone. With the FMCG sector most prone to counterfeiting, companies need to be able to curb the risk caused mainly by technological innovations and faster shipping routes. The smallest of factories now manufacture an array of genuine-looking products with bogus labels and fake packaging that can impact consumer health and business revenue. Track and trace solutions can help in monitoring products across the supply chain and verifying products that are delivered to customers are real and genuine – thus eliminating substantial damages to consumers and legitimate businesses.
3. Ensure regulatory compliance: The FMCG industry faces unique challenges in tracking and tracing perishable goods and ingredient inventory. Every company needs to demonstrate a great aptitude in tracking raw materials from the time they are harvested to the moment they arrive in the hands of consumers. Such capability is crucial to comply with government regulations and ensure appropriate levels of supply chain visibility. Modern track and trace solutions can provide distributors and manufacturers with advanced capability to track each ingredient, WIP item, and finished product from farm to fork. Since expired products equal wasted money – not to mention shrinkage – being able to assess actual levels of inventory, with real-time visibility, makes it easy for companies to comply with strict regulations. Such visibility not only helps in reducing overhead and minimizing charge-backs; it also allows companies to exactly know where a product is located and where it should be stored or how it should be shipped.
4. Verify proof of product origin: As the information on product origin constitutes one of the principal attributes consumers look for while selecting products, track and trace solutions make it easy for FMCG companies to verify the country of origin, lot number, and serial and batch number – with perfect accuracy. When items arrive at the warehouse, these solutions automate the process of cross-checking the inventory against predefined standards and benchmarks. They also help deal with ingredient reactions and food allergies, as companies can get real-time insight to see if products have come in contact with non-compliant or blacklisted materials along the way. The ability to avoid cross-contamination and recalls due to wrong or inaccurate verification can safeguard consumer health and also mitigate the chances of expensive fines and complex lawsuits that can impede future growth and operations.
5. Enable effective cross-selling: FMCG companies can drive significant revenue if they capitalize on cross-selling and up-selling opportunities. But this is difficult if they do not have real-time insight into what products customers are purchasing or what products they are likely to be interested in. Modern track and trace solutions can allow FMCG organizations to get the insight they need into customer preferences - at each stage of the purchasing journey - while targeting them with products that best fit their requirements. By uncovering the best opportunities for cross-selling, companies can position the right deals at the right place at the right time to the right customers - thus achieving significant close rates while also improving customer satisfaction.
The sudden and widespread trend towards online shopping has made consumers extremely spoiled for choice. With most companies now offering same-day deliveries, FMCG companies need to be able to keep up with these expectations. Advanced track and trace solutions set a robust foundation for ensuring quick and high-quality product delivery. In addition, they also allow for improved inventory management, eliminate counterfeiting, ensure regulatory compliance, verify proof of product origin, and uncover effective cross-selling opportunities. They provide companies with the ability to capture, track, and compare incoming product data against databases, protecting them against wasted inventory, non-compliance, overhead, and effort.
