In recent years, supply chains have been undergoing rapid changes. Only a few years ago, companies limited their attention to relationships with suppliers and customers, focusing primarily on cost reduction and avoiding conflicts. Today, they are trying to involve their partners in supply chain management, regardless of their position in the supply chain.
This stage of development will not be closed for a long time. For instance, during the II ECR Days in Bonn, it was stated that today’s supply chains are isolated from each other, and cooperation only takes place between direct supply chain partners. This is precisely where enhanced integration of logistics functions between multiple chain partners is particularly needed. Many companies have already understood this. An example from the Netherlands is the Albert Heijn supermarket chain, which supplies its stores according to the Just-In-Time concept within 24 hours with minimal inventory levels at various distribution stages.
On one hand, consumer demand, and on the other, increasing competition among providers, have led to a continuous increase in product ranges and increasingly faster product life cycles. To meet these logistical service challenges, numerous (international) mergers and acquisitions in wholesale and retail trade have taken place in recent years to strengthen market positions in supply chains. This development has had important consequences for goods distribution structures:
1. Goods flows are being restructured (internationally). Increasing quantities of goods distributed through more concentrated channels entail investments in the logistics structures of large retail chains.
2. Large retail chains are gaining an increasing market position relative to their suppliers. They are attempting to reduce the number of suppliers and tighten cooperation with remaining suppliers to leverage rationalization opportunities. This also affects strategically planned cooperation between industry and trade, including joint investments in the flow of goods and information. Their goal is to meet customer wishes with minimal cost expenditure.
Aldridge and Harrison list five challenges that retail chains must face:
– Replenishment ordering: Orders for individual retail chain outlets are triggered by sales registration at cash registers.
– 7 Day – 24 hour ordering and supply: To guarantee punctual deliveries to retail chain stores, goods deliveries to distribution centers and retail stores take place 24 hours a day, 7 days a week.
– Cross-docking: Development of concepts where goods (or part of the goods) flow through a distribution center and are picked for delivery to retail stores. This means that products are coded at the manufacturer’s site, and at the distribution center, they are only sorted according to the delivery location and must be assigned to delivery vehicles.
– Product tracking: It becomes necessary to have information on where the goods are at any given time to ensure both reliability and flexibility of deliveries.
– Improved vehicle utilisation and reduced vehicle movements: In the UK, over 50% of delivery vehicles in road transport are empty or not fully loaded. Traffic jams on streets and highways, as well as rising fuel prices, force a rapid increase in transport efficiency.
Harrison and Van Hoek define, among other things, transponder technology (RFID = radio frequency identification) as a technical development capable of meeting these challenges. They assess that this technology will complement the barcode in the future because it can increase the speed of the identification process and implement improved security concepts.
This paper aims to inventory the capabilities of transponder technology compared to other identification systems, with an indication of current and future development directions.