Marking products with barcodes is currently so obvious that we cannot imagine the retail market without them. It is also the case with the marking on pallets. A label on a pallet or another transport and logistics package does not surprise anyone at all. While the barcode is a source of information about the product, the logistics label should be a source of information about the content of the pallet. However, the difference between marking the products and marking the pallets is considerable…
The majority of the codes used in the retail sales are standard GS1 codes with a typical stable and permanent structure, ensuring that every number is unique. Such global markings may be applied by all the participants of the supply chain without any additional agreements needed.
Unfortunately, when it comes to logistics labels, it is not so easy. A vast majority of labels are based on internal solutions which are not connected whatsoever with other partners from the supply chain and serve only the companies that have created them. The fact that such non-standard labels are used forces the following recipients to make their own internal marking solutions and put additional labels on the logistics units.
The situation is increasingly troublesome, and the supply chain participants are starting to notice the need for standardization. They ask themselves a question: should a single standard label which everybody can use be implemented? And the answer is: yes!
Logistics labels implemented in commercial networks
The GS1 logistics label is one of the basic tools used to mark and monitor the movement of loads, or in other words transport units, which enables companies (producers, wholesalers, retailers, distributors, carriers, logistics operators) to share information in a standardized way that is understandable worldwide.
The standard GS1 logistics label is implemented by more and more commercial networks, which motivates their suppliers to use it. The commercial networks were the first to notice the benefits entailed by the standardization of pallet markings. However, to fully integrate a supply chain, the engagement of other participants, mainly logistics operators, is a matter of the utmost importance. Logistics operators, applying GS1 standards as an integral part of their services, may easily harmonize the data and automate their receipt as well as ensure full integration with the client.
Currently, logistics operators rarely use the standard GS1 labels. They are used to creating their own internal solutions for both identification and communication, so they are often not aware of the benefits that the standardization may bring. Besides, they underline that they strongly rely on their clients’ solutions who are not eager to introduce any changes in their methods of identification, as they do not understand the long-term benefits of implementing the standard. On the other hand, logistics operators complain about constant problems in communication with their clients and with different markings of pallets supplied by their clients. Hence, they more and more frequently emphasize the need for standardization, also in the scope of transport and logistics.
The problem could be solved by replacing internal labels with the standard GS1 logistics label for identification purposes and implementing standardized electronic communications with other participants of the supply chain. The benefits of such an approach can be observed in the Scandinavian markets, where 90 percent of all transport units are identified with the GS1 labels.
Benefits for supply chain participants
The use of the standard logistics label brings the whole range of benefits for the supply chain participants. In addition to fulfilling the requirements of commercial networks, production companies, using standard markings, can adapt, in an easy and flexible way, to the needs of many external recipients that apply the GS1 standards. Additionally, they can use the same labels to improve their own storage processes, such as the receipt of goods, order picking and delivery. The producer using standard pallet markings will be charged with lower costs of distribution by some logistics operators than the companies which do not use these standards.
From the perspective of logistics operators, undoubtedly, the most important benefit is that, when using standard labels, the operators do not have to use their own internal labels at different stages of their transport and storage processes, which allows them to save time and reduce costs.
So, it can be expected that marking pallets with the standard GS1 logistics labels, also by the companies providing logistics services, both in storage and transport processes, will become much more common in the future. Logistics operators should benefit the most from the popularization of the standard GS1 logistics labels in the supply chain because they are the last cell in the chain.
Author: Agata Horzela
Photo: Royal Airforce Mildenhall