10 Unrealized Benefits of Serialization
Itemized serialization pays rich dividends to your business by optimizing processes, making inventory 100% traceable, minimizing human errors, and increasing transparency throughout the supply chain. Here are 10 unrealized benefits of serialization for the brands:
1. Inventory accuracy and traceability
Serialization detects and prevents duplicate scanning of items thus ensuring 100% accuracy. Since all the information is stored in the barcode, it is very easy to trace its journey within a warehouse and through the supply chain.
2. Easy tracking of user and machine actions
Since barcode scanning allows capturing 100% data in the system, in case an incorrect step is taken by a staff member it can be easily tracked. Brands can get down to the exact item barcode which is faulty, and the staff member that has made the mistake. This makes error mapping quick for training purposes and helps identify loopholes in the processes. This is not possible to record on SKUs as the number of items having the same barcode are many and zeroing in on the exact faulty item is difficult.
3. Automate processes to reduce the resource time investment
Rather than using lengthy spreadsheets or approximations for taking crucial warehousing decisions, serialization enables easy automation of processes. Consolidating multiple steps helps reduce manpower and handle repetitive tasks more efficiently allowing managers to focus only on important tasks. It avoids costly errors and consequent business losses.
4. No need for wall-to-wall audits
In an SKU-based system, conducting wall-to-wall physical verification of the items require all operations of the warehouse to stop in order to avoid recounting the same items. This is not an issue with itemized serialization as each item has a unique ID and is perfectly mapped to the bin. With real-time inventory sync, in case there is any change the barcode will ensure it gets captured in the system. With 100% bin level inventory accuracy, regular wall-to-wall audits are not required.
5. FIFO and FEFO for order picking
By having all the information accurately stored in the barcodes, brands can prevent piling up of aging inventory, obsolescence, and wastage. As the product expiry date of each item gets mapped to the barcodes, brands can use the First-In-First-Out (FIFO) algorithm to push out those items that entered the warehouse first. This method is widely used in industries where inventory is prone to obsolescence, such as fashion.
Likewise, the expiry date of each item being stored, items expiring first are sold off first by the First-Expiry-First-Out (FEFO) method. Companies dealing in perishable products such as packaged milk or pharmaceuticals mostly use the FEFO method.
6. Location Adherence in Picking
In a scenario where an SKU is distributed among several bins and the whole SKU is represented by a single barcode, the picker may pick the items from any bin thus impacting bin level accuracy. SKU-based order picking will either not specify which bin the item needs to be picked from, or the system will not prompt an error when the item is picked from a mapped location. This can lead to inventory mismanagement, obsolescence, and errors in counting. On the other hand, when picking is done by following the individual barcode of each item, the picker will pick the item from the bin specified by the system. This ensures the inventory count is accurate at all times, there is no need for regular audits, and there is 100% traceability within the warehouse.
7. Effective price analysis with the possibility for daily margin adjustments
Processes get interrupted whenever prices are revised in the stores. With serialization, brands can keep track of their cost prices and sales prices dynamically for different items. Margin adjustments can be made at individual style and piece level. Given the fact that the inventory is completely digitized, brands can easily adjust the prices of their stock depending upon the demand and location.
8. Efficient returns management and processing
Serialization allows brands to link each returned item’s barcode with its reason for return. This makes for great insights into why customers are rejecting the products and what corrective measures must be taken. Repeatedly returned items can be quarantined for a thorough quality check, to understand the defect. Rather than creating new SKUs, serialization of inventory enables brands to send the exact item back to the vendor in RTV (return-to-vendor). As soon as a serialized item is returned, it can be made live immediately (depending upon its condition), expediting re-commerce and increasing the chances of resale.
9. Easy SPF (Seller Protection Fund) claims to process
When the exact reason for return is mapped to individual pieces of inventory, along with the image, it is easier for marketplaces to file a claim with brands for the rejected item. This ensures quick reconciliation with the brands.
10. Simple UX/UI for faster order processing
Serialization helps digitize the warehousing process and allows brands to use handheld devices or Bluetooth scanners for scanning items. This eliminates chances of human error and enables working with an automated system accessible through a simple UX/UI. All of this precludes the need for costly high-skilled labor, cuts down on training time, easy cross functioning, and ensures faster order processing.
As is clear from the above pointers, serialization lies at the very heart of automation in warehouses and is the first step toward making supply chain processes more efficient, cost-effective, and highly competitive.