Should you aggregate or not?

Should you aggregate or not?

I have had a lot of questions recently that boil down to the question of whether or not to aggregate product. So here are some thoughts about the things you need to consider…

What do I mean by aggregation?

First of all, let’s just clarify what I mean by “aggregation” in this context. For the purposes of this discussion (and for the purists amongst you, forgive me as I know this is not the classical definition of the term), I take aggregation to mean several things all packaged together:

  • Putting Unique Identifiers (UIDs) on the smallest saleable product packages, typically cartons.
  • Putting UIDs on one or more levels of shippers, e.g. cases and pallets.
  • Building the relationship between the UIDs on the various levels of packaging in a database as the serialised cartons are packed into the serialised cases and then the cases put onto serialised pallets.

In what I will term Track & Trace (T&T) legislation, aggregation is required for very practical reasons. In this type of legislation, the sale of products from one commercial owner to another is tracked in some way at the individual UID level. As product passes down the supply chain it would often be impractical to scan each smallest saleable unit UID as it was sold. Therefore, the likes of wholesalers and hospital chains, who often handle the product in shippers, simply scan the shipper UIDs and infer the serialised contents using the database information discussed earlier.

In what I will term an End to End (E2E) model, UIDs are applied to the smallest saleable units and serialisation information is compiled in a database. Shippers are not strictly required to be serialised in the purest form of this model, as the only time the UIDs are needed is at the end of the supply chain, when the product is (mostly) being handled at the smallest saleable item level. This is a much simpler and cheaper model than T&T as packing lines are less complex and distribution supply chain nodes do not need to be serialisation enabled.

So you can see immediately that, if you are only dealing with product that is destined for a pure E2E legislative model, then there is no legislative reason to aggregate and this could be much cheaper to implement.

A few factors to consider

However, there are a few factors you should consider before deciding how to move forward:

  • Are the legislations you are considering pure E2E or, like the EU FMD, are they potentially T&T, at least for some products?
  • A number of legislators are starting with E2E models, but are intending to move to T&T in the near future.
  • Are the assets (packaging lines, warehouses, etc.) handling only pure E2E products?
  • Will the evolution of your business mean that your assets are likely to need to handle T&T models in future, particularly with short lead times?
  • Are there other benefits that you might derive from aggregating?

In our experience, the net result of these and other considerations often leads companies to implement aggregation capabilities on many, if not all of their serialised packaging assets, even if they do not necessarily aggregate all serialised product on these lines.

If you would like to discuss these, or other serialisation-related questions, please don’t hesitate to contact me.

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