The supply chain is seeing a record number of parcels flowing through global channels — a shocking 27% increase since 2020. Driven by escalating consumer demands, supply chain managers are striving to provide total transparency by gaining capabilities that allow them to document each parcel’s location at every point of its journey, from source to customer. Today, deploying technology to pinpoint parcel location has become a consumer-facing priority.

Taking a holistic view, executives are looking to implement technology and processes that enable resilience not only to address the current supply chain landscape, but to future-proof for the next set of challenges. Ensuring accurate chain of custody is vital to meeting escalating consumer expectations for speedy and accurate delivery, in addition to maintaining brand authentication. Beyond that, documenting chain of custody has increasing regulatory ramifications in areas such as pharmaceuticals and hazardous materials transport.

The Journey Begins 

The industry is moving toward solving multiple challenges through a digitally connected supply chain. Call it the power of “one.” When a digital ID is given to each item at source, it has a ripple effect all the way to the end-customer. By utilizing intelligent labels such as radio frequency identification (RFID) at source, a unique ID is given to the product at its infancy, and the product “houses” this verifiable brand data throughout its supply chain journey. The RFID label also acts as a trigger for automation as that product moves through the supply chain.

The benefits of automating chain of custody documentation are realized in both speed and accuracy. With RFID labels, no line of sight is required, so products can be scanned passively by deploying automated reading technology, such as a tunnel placed along a conveyor belt, or an overhead reader above a dock door. The result is a valid record of each item’s provenance and routing, as it moves to each subsequent touchpoint on the supply chain.

Digital IDs on every product directly address the increasing volume and complexity of supply chain partners, by allowing all operators to have full transparency of what’s coming inbound and going outbound, because the verification process is triggered by the digital ID at every touchpoint. This benefits the warehouse responsible for receiving orders and sending them out, as well as the shippers who need to account for what goes into the trucks and what goes on the road. Further on, a retail store has accurate expectations for product count and arrival date, enabling them to plan for operations from stocking and replenishment to advertising and promotions.

Whether inbound and outbound operations deploy intelligent labels for parcels or pallets, an important aspect of streamlining and automating supply chain operations is access to the accurate data they contain. This data becomes more important at every point downstream, because any network error will be magnified at each subsequent point.

Read: Can a Label Shortage Bring Global Supply Chains to a Halt?

For example, less-than-truckload (LTL) shipping requires many steps, starting at pickup, then moving through the carrier network and on to the last mile. If something goes awry upstream, the error is magnified and becomes more costly downstream, because all the touchpoints become invalid until the discrepancy is corrected. The simple fact is that every misrouted parcel wastes time and costs money. Avoiding routing errors and having accurate data that enables visibility translates to a much less error-prone process. In fact, our studies show that in digitally connected supply chain processes, operational efficiency increases 20%. 

Brand Matters

Like merchandising and marketing, brands are recognizing that their supply chains are now consumer-facing operations. Providing transparency and documenting chain of custody have become increasingly important because consumers are demanding it. A recent article in the Harvard Business Review cited research from the MIT Sloan School of Management which found that consumers may be willing to pay 2% to 10% more for products from companies that provide greater supply chain transparency.

The continued growth of e-commerce is generating more and more real-time data. Businesses can utilize technology to aggregate all the data and use it to meet customer expectations for accuracy and speed. However, with supply chain partners and consumers alike interacting with data generated by tracking processes, there just isn’t time for packages to wait for line-of-sight, manual scanning.

Digital IDs created at source enable another essential attribute: brand authentication. Although digital IDs can be assigned downstream, greater accuracy is achieved the further upstream the digital ID is created. Maintaining the chain of custody deters counterfeiting, tampering and entry of products into the gray market. There’s also the issue of overproduction — a digital ID reveals where the unsold merchandise goes and how it gets there.

To promote loyalty, brands need to meet unprecedented consumer demands to deliver packages ever more quickly, and provide precise knowledge of where their goods are at every moment. Customers are demanding information on their product’s origin and, like retailers, need to ensure it isn’t counterfeit. A connected digital ID inspires consumer confidence — tracing where an item is in real time, validating its origin and preventing fraud (all business benefits as well, of course). The tangible result for retailers is that the data collected using connected digital IDs connects consumers back to the brand in the most personal way possible: the package they ordered in their hands.

Michael Kaufmann is global market development director-logistics with Avery Dennison Identification Solutions.