Why are digital links revolutionizing supply chain management?
Digital links radically reshape how manufacturers source, produce, and move goods by introducing a small but game-changing innovation to the good old barcodes. Think QR codes that combine a product ID, like the ubiquitous GTIN, with a web address. Boom! Products can now go online.
Not only that: a single digital link QR code can serve several purposes because it behaves differently according to who or what is reading it, where, and with which device, providing different and contextual information, links, functionalities, and experiences.
It’s easy to see why digital links printed on items, parts, and packaging might be the most sustainable, flexible, and effective way to create smart products. And smart products are essential to optimize all supply chain stages, from integration to operations, purchasing, and distribution.
And they don’t stop working when a product has reached its final destination: they go beyond order fulfillment and can keep transmitting once in the hands of consumers until they get disposed of.
Individual products can be closely monitored, and their info can be updated with every QR code scan. This comprehensive and dynamic view of items enhances traceability and transparency and provides numerous benefits for brands, business partners, service providers, and consumers.
By creating “living” digital twins of products, digital links unlock the potential for significant improvements in inventory management, waste reduction, and cost savings. Furthermore, they enable more effective management of product recalls and the implementation of fraud prevention measures.
This advanced level of supply chain oversight allows businesses to respond quickly to issues, take immediate corrective actions, and ultimately provide a higher level of service to their customers.
Let’s look at how digital links can help businesses improve and streamline their supply chain management.
Digital link QR codes enhance collaboration and decision-making
Digital links can be pivotal in improving collaboration and decision-making across various aspects of supply chain management.
By providing real-time, accurate information and facilitating communication between stakeholders, digital links can help organizations optimize their operations, mitigate risks, and drive continuous improvement.
Cross-functional communication
Effective collaboration and communication between various stakeholders, suppliers, manufacturers, logistics providers, and retailers are essential to avoid supply chain issues.
Digital link QR codes can be a unified platform for sharing real-time information, ensuring all parties are aligned and can make informed decisions.
For instance, a pharmaceutical company could use digital links to share information about inventory levels, production schedules, and shipping timelines with its suppliers and logistics partners.
This seamless flow of information can help prevent stockouts, reduce lead times, and improve overall global supply chain efficiency.
Strategic decision-making
Supply chain management often involves complex decision-making processes that require input from various stakeholders and access to accurate, up-to-date information.
Digital link QR codes can provide real-time data on key performance indicators (KPIs) such as inventory levels, order status, and shipment tracking, helping supply chain professionals make more informed decisions.
Supplier performance evaluation
Evaluating the performance of suppliers is crucial for maintaining a reliable and efficient service without supply-chain disruptions.
Digital links can provide businesses with real-time data on supplier performance, such as lead times and quality metrics.
This information can help organizations identify high-performing suppliers, address potential issues, and drive continuous improvement.
For instance, an automotive manufacturer could use digital links to monitor the delivery performance and quality of components from their suppliers, ensuring that production schedules are not disrupted due to supplier-related issues.
Digital link QR codes promote interoperability and global standardization
Digital link QR codes are based on the digital link protocol set up by GS1, which maintains barcode standards worldwide.
By embracing digital link QR codes and the global standardization they represent, businesses can unlock significant interoperability, efficiency, and collaboration benefits.
Adopting digital links as a universal language for supply chain information can help companies navigate the complexities of the global market and drive lasting improvements in their supply chain operations.
Cross-border commerce
In an increasingly globalized market, businesses must be able to communicate and exchange information across borders and diverse supply chain ecosystems.
Digital link QR codes, built upon globally recognized GS1 standards, provide a universal language for supply chain information, enabling seamless communication and data exchange between various stakeholders.
For example, an international fashion brand could use digital links to share product information, shipping details, and customs documentation with partners and regulators across multiple countries, streamlining cross-border commerce and reducing the risk of delays and disruptions.
Data integration
Adopting digital links can help businesses simplify data integration by providing a standardized format for product information and supply chain certifications. The CIRPASS organization’s work in the EU to establish the Digital Product Passport’s foundation is built around this concept.
This standardization can reduce the complexity of managing and sharing data across multiple systems, platforms, and partners.
For instance, a global electronics retailer could use digital links to consolidate product data from various suppliers and manufacturers, simplifying product information management and ensuring consistent data across their entire supply chain network.
Interoperable technologies
Digital link QR codes can serve as a bridge between various supply chain technologies, such as Internet of Things (IoT) devices, blockchain platforms, and enterprise resource planning (ERP) systems.
By providing a standardized method for encoding and sharing data, digital links can help businesses leverage the full potential of these technologies and drive greater supply chain efficiency.
Regulatory compliance
As supply chain disruptions become more frequent due to a more complex and globalized interconnection, businesses face increasing regulatory scrutiny and must comply with various international standards and requirements.
Digital links can help companies demonstrate compliance by providing a standardized, transparent, and traceable method for sharing product and supply chain data with regulators and auditors.
This is the case with the EU Digital Product Passport we mentioned before, but governments and institutions worldwide are developing and enforcing more and more product regulations.
Digital link QR codes help companies advance inventory management
By leveraging digital link QR codes, businesses can significantly enhance their inventory management capabilities, leading to cost savings, increased efficiency, and improved customer satisfaction.
Implementing digital links in inventory management can help organizations stay agile and responsive to changing market conditions and evolving consumer demands.
Inventory levels
One of the key challenges in supply chain management is maintaining optimal inventory levels to meet customer demands while minimizing carrying costs.
Digital link QR codes can help businesses monitor stock levels and product movement in real-time, enabling them to make data-driven decisions and maintain the right inventory balance.
Product tracking and visibility
Digital links can improve product visibility throughout the supply chain, allowing businesses to track items from production to the point of sale and beyond.
This enhanced visibility can help identify bottlenecks and inefficiencies, enabling organizations to optimize inventory management processes.
For instance, a food and beverage distributor could use digital links to track the movement of perishable items through the supply chain, ensuring that products are delivered on time and reducing the risk of spoilage or waste.
Inventory forecasting and demand planning
Accurate inventory forecasting and demand planning are essential for ensuring businesses have the right products available at the right time to meet customer needs.
Digital links can provide valuable data on sales trends, seasonal fluctuations, and customer preferences, helping organizations develop more accurate forecasts and plan their inventory accordingly.
Returns management
Managing product returns can be a complex and costly process for businesses. Digital link QR codes can help streamline returns management by providing real-time information on product status, history, and location.
This data can help businesses quickly identify and process returned items, minimizing the time and resources required to manage them.
Digital links foster supply chains that are actually smart
By adopting digital link QR codes in their supply chain management, businesses can create smart supply chains that are more efficient, responsive, and customer-focused.
Real-time data collection and analysis
By integrating digital link QR codes into their supply chains, businesses can gather real-time data on product location, condition, and usage patterns.
Stakeholders, such as logistics operators, warehouse managers, or retail associates, can scan the QR code on the packaging or product to update and share crucial information.
This wealth of data can help organizations optimize their supply chain analytics, reduce waste, and improve efficiency.
For example, a logistics company could require its drivers to scan QR codes on packages when loading and unloading refrigerated trucks, ensuring that perishable goods are transported under optimal conditions and reducing the risk of spoilage.
Predictive and preventive maintenance
Digital links can provide insights into product performance and wear, allowing businesses to anticipate maintenance needs and prevent failures.
Businesses can identify potential issues before they escalate by gathering data from QR code scans by end-users or service technicians. This proactive approach can minimize downtime, reduce repair costs, and extend the lifespan of their products.
Digital links help maintain product safety and reduce waste.
Traceability and recall management
Digital link QR codes can facilitate rapid identification and removal of compromised or defective products, reducing the risk to consumers and the financial impact of recalls.
Enhanced traceability can also help identify sources of issues, enabling businesses to address root causes and prevent future problems.
Dynamic pricing and waste reduction
Digital links can provide real-time data on product inventory levels, expiration dates, or other relevant information, allowing retailers to implement dynamic pricing strategies that encourage selling items before they become unusable.
Businesses can improve their bottom line and minimize their environmental impact by reducing waste and ensuring that products are sold at their optimal condition.
Safety and handling information
Digital link QR codes can provide consumers and supply chain stakeholders with crucial information on product safety, handling, and disposal. This increased accessibility can lead to improved product management, reduced risk, and greater overall security.
For instance, an automotive parts manufacturer could use digital links to offer customers detailed information about installing, using, and disposing of parts containing hazardous materials, such as brake pads with asbestos.
Similarly, a furniture retailer could use digital links to provide customers with information on safely assembling, maintaining, and disposing of their products, reducing the risk of accidents and ensuring proper recycling.
Digital link QR codes can combat counterfeiting
By integrating digital links into their anti-counterfeiting strategies, businesses can significantly enhance their ability to protect their products, customers, and brand reputation.
Next-level product authentication
Counterfeiting is a significant challenge for businesses across various industries, resulting in financial losses and damage to the brands themselves.
Digital link QR codes can help fight fake items by providing a secure and reliable means of product authentication.
By embedding unique identifiers in the QR codes, businesses can verify the authenticity of their products at any stage of the supply chain.
Supply chain oversight
Supply chain monitoring through digital links ensures that products are sourced, produced, and distributed through authorized channels.
This oversight can help prevent counterfeit goods from entering the market and protect the integrity of the supply chain.
For instance, a pharmaceutical company could use digital links to track the movement of their products from manufacturing facilities to authorized distributors, ensuring that counterfeit drugs do not reach consumers and compromise patient safety.
Legal enforcement and brand protection
Digital link QR codes can be an effective tool for law enforcement and brand protection teams to identify and track counterfeit products.
By providing a secure and tamper-proof means of product authentication, digital links can help authorities seize and remove counterfeit goods from the market, ultimately safeguarding both businesses and consumers.
For instance, a global sports apparel brand could work with customs officials and law enforcement agencies to use digital links to identify and intercept shipments of counterfeit merchandise.
Embracing the circular economy with digital link QR codes
Beyond the linear model
The traditional linear model of supply chains, which emphasizes a one-way flow of materials and products from manufacturers to consumers, often leads to waste and inefficiency.
Conversely, the circular economy aims to minimize waste and maximize resource efficiency by promoting recycling, reusing, and repurposing materials.
Digital link QR codes enable businesses to track and trace products throughout their entire lifecycle, creating opportunities for circular supply chain models.
By promoting circular practices, brands can reduce their environmental impact and demonstrate their commitment to sustainability while enabling unprecedented business models related to product maintenance and reselling.
Circular initiatives
- Product lifecycle transparency: Digital links can provide detailed information about products’ origin, usage, and end-of-life options, encouraging responsible consumption and disposal. For instance, an electronics manufacturer could use QR codes to share information about recycling programs and proper disposal methods for their devices. By doing so, the company can help reduce electronic waste and promote environmentally responsible behavior among its customers.
- Reverse logistics: Digital link QR codes facilitate the tracking and management of returned or recycled products, streamlining reverse logistics processes and promoting resource recovery. A furniture retailer, for example, could use digital links to track returned or damaged items, ensuring that they are appropriately refurbished, repurposed, or recycled. This reduces waste and enables the retailer to offer pre-loved products at a discounted price, catering to budget-conscious customers while promoting sustainability.
Digital links empower ethical and sustainable supply chains
Responsible sourcing
Digital link QR codes can provide detailed information about suppliers’ social and environmental practices, enabling businesses to make informed decisions about their partners.
For example, a coffee company could use digital links to share information about their coffee bean suppliers’ fair trade practices and environmental initiatives.
By ensuring transparency and traceability in the supply chain, digital links can help businesses demonstrate compliance with ethical and sustainable sourcing standards.
Fair labor practices
Digital link QR codes can be used to track and verify labor conditions in the supply chain, ensuring that workers are treated fairly and ethically.
A fashion brand, for instance, could use digital link QR codes to provide information about the wages, working conditions, and labor rights of workers in their garment factories.
By making this information accessible to consumers, the brand can raise awareness about fair labor practices and promote demand for ethically-produced products.
Digital link QR codes strengthen disaster response and humanitarian efforts
Relief supply chain management
In times of crisis, efficient management of relief supplies is crucial to saving lives and alleviating suffering.
Digital link QR codes can help streamline relief supply chain operations by providing real-time inventory levels, locations, and delivery status data.
For example, in the aftermath of a natural disaster, humanitarian organizations could use QR codes to track the distribution of food, medical supplies, and other essential items to affected areas.
This real-time data can help ensure that aid reaches those in need more quickly and efficiently, preventing potential bottlenecks and misallocation of resources.
How to unlock the power of digital links for supply chain
Digital link QR codes can transform supply chain management in once unimaginable ways, bringing endless benefits to several business areas simultaneously.
The great news is that you can start implementing digital link-based processes right now, way ahead of the official deadline for the momentous switch from the traditional barcodes to the new digital link QR codes: the so-called “Sunrise 2027”.
All you have to do is create your account on digital-link.com and start digitizing your products right away. Just add the GTINs, and we will take care of creating the digital link, its dynamic QR code, and a smart product page that can be customized to serve many different purposes.
And if you need advice about making the most of digital links for your supply chain, please contact our experts at info@digital-link.com or drop a message in our live chat.
