BRIEF: This white paper attempts to shed light on best practices for evaluating your current tracking system and measuring ROI for any future investments. From identifying the steps, metrics and processes required for the successful implementation and ongoing optimization of an asset tracking program, you will glean guidance from the experts in the field of container tracking.
As outlined in Part One of this Asset Management & Tracking White Paper Series, a well-orchestrated method for tracking and
managing assets is critical for any healthy supply chain. In its most basic sense, this process should allow for the systematic tracking, evaluation and management of containers. The end goal then becomes avoiding unnecessary capital expenditure and reducing overhead, all while alleviating the common risks typically associated with managing, maintaining and owning those assets.
Unfortunately when implementing a new system, the all-too-common misconception is that a successful asset tracking program begins and ends with the software and hardware implementation. In reality, this is one of the most erroneous myths associated with tracking.
While choosing the right hardware and software is certainly a critical part of setting up the new process, true success lies
in building a solid foundation before technology is even brought into the equation.
Laying the Foundation for Your Asset Tracking Program
The steps required to implement a container management tracking program require more than simply installing software and purchasing hardware. You must first begin by preparing and evaluating the back-end of your current process. This critical step goes beyond the need to simply ensure that the right system is identified and implemented. When done correctly, preparation of the back-end should result in having the metrics and Key Performance Indicators (KPIs) in place to define future success and measure ROI.
3 Steps for Successful Back-end Implementation
Step 1: Evaluating the Current Process
How is the current tracking process performing? Can it even be measured? Understanding these metrics plays a critical role in evaluating the success, failure and ROI of any tracking process. In order to gain a qualitative picture of how the current process is performing, begin by considering the following questions:
Note: Carefully recording the performance of the current system to get a baseline will make it much easier when it comes time to
measure the ROI of the new tracking program.
Step 2: Understanding The Pros and Cons of Asset Management Systems
At a high-level, there are two types of container tracking options available: Aggregate and Individual. Choosing the right one
depends on the complexities and budget constraints of the supply chain.
Aggregate Tracking vs. Individual Tracking
Aggregate Asset Tracking: Typically a manual (i.e. pen and paper or excel spreadsheet) process. Aggregate Asset Tracking uses
“tribal knowledge” and visual label tracking to determine the net “in and out” of assets in the supply chain.
Pros: Ease of Implementation, Start-up Costs
Cons: Not as Accurate, Frequent Reconciliations
Individual Asset Tracking: Built to accommodate the intricacies of complex supply chains. Individual Asset Tracking relies on barcodes and RFID along with GPS data to track assets.
Pros: Real-time Accuracy, Item-level Dwell Times
Cons: Time Intensive Implementation, Higher Level of Change Management Required
Step 3: Preparing for Stakeholder Alignment
When implementing any asset tracking program, success is often dependent on gaining both top-down and bottom-up buy-in from stakeholders, particularly the people at the plant level who will be responsible for compliance with the system. In order to achieve this level of alignment, it is necessary to have the KPIs in place that each stakeholder truly values.
Beyond ROI, Valuable KPIs Include:
Defining and Implementing the Asset Tracking System
After the back-end prep work has been done, the KPIs have been defined and the best tracking type has been identified, the next step becomes defining the critical components that combine to create the entire process. Remember, an asset tracking program is only as strong as each of the individual moving parts supporting it.
The Five Critical Components to Implementing Asset Tracking
Evaluating Value & Proving ROI
Measuring, managing and monitoring the performance of the new tracking system begins by first having a clearly defined set of KPIs. When mapped directly to the metrics evaluated during the back-end preparation process, these analytics will not only shed light on how the new system compares to previous processes, they will also play a large role in refining the new process, while continuing to replicate past successes.
Criteria to Consider When Evaluating ROI
With these KPI’s clearly in place, measuring and proving ROI comes down to simply comparing each metric against the performance prior to implementation.
Outsourcing Your Asset Tracking System
For organizations without the in-house expertise required to build, implement and manage a proprietary asset tracking system, seeking an outside provider is a viable option. Not only are outside tracking system providers often able to reduce any initial installation expenditures, they also offer the expertise and resources necessary to ensure that the new system is able to stand up to the challenges of evolving supply chain visibility demands.
For example, the team at CHEP provides comprehensive setup, support and consultation to ensure the successful implementation of the container tracking system. From choosing the right technology to tracking and reporting, common advantages of partnering with CHEP include:
To learn how CHEP’s Container Management Solutions can help you meet your business goals, please contact us at: 888-873-2277 or via email at info.containers@chep.com.
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