The ROI Of Track And Trace Solutions

Dan Bieler Principal Analyst
Pascal Matzke Vice President, Research Director
August 10, 2018

By Dan Bieler, Sebastian Selhorst, Pascal Matzke, and Michael Glenn

Securing executive buy-in for any digital investment requires a detailed and carefully articulated business case. The case for investment in digital track and trace solutions serves as an example for any CIO looking to get backing for an internet of things (IoT) project. As with IoT, track and trace solutions require committed information sharing and collaboration across an ecosystem of diverse stakeholders, using differing systems. In our report, “Building Your Digital Business Case: The ROI Of Track And Trace Solutions,” we share a blueprint for an effective digital track and trace business proposal and offer our Total Economic Impact® (TEI) ROI calculator, curated for this solution.

Track and trace is about more than supply chain efficiency; a fully functional solution targets customer pain points, exceeds expectations to cement loyalty, and generates fresh value.

Sell your track and trace investment to leadership around four business outcomes and their effect on customer experience:

  • Asset management. “Where’s my stuff?” Customers expect real-time information regarding the location of a product they ordered. Uber Eats has mastered this on the micro scale, with customers being able to track their delivery from the restaurant to their doorstep. Expectation for real-time traceability has graduated from fast food to shipping freights, so expect your B2B and B2C users to demand this level of accuracy on a larger scale in the future, as well as a seamless returns process.
  • Compliance and risk management. Reduced risk of theft: “Get off my stuff.” In 2015, cargo theft stood at $22 billion annually. Unfortunately, no track and trace solution will prevent an armed hijacking, but if information about an asset’s location is presented accurately and in real time, it is less likely to be stolen. You can take this one step further and take advantage of a solution that sends out alerts when the asset moves out of a specified area.
  • Increased asset performance. Data entry optimization and accuracy — swapping cumbersome, error-prone manual data entry for a quick scan — almost totally eradicates the fat-finger errors that cause disruption to the supply chain and chips away at customer retention rates.
  • Faster reaction to changing conditions. Combining track and trace data with deep supply chain knowledge, as well as other sources such as weather or traffic data, allows you to be flexible as conditions change. Panalpina has added another layer of sophistication on top of this, embedding assets with the capability to make autonomous decisions on which route is best to take depending on conditions.

After carving out the business benefits, don’t forget to take a forensic approach to the costs of your project. Initially, they will include hardware, software, and connectivity. Over time, your operational costs will creep up as additional costs of maintenance, design, consulting, and adding or training staff come into play.

Curate a checklist to calculate your ROI, including:

  • What is the cost of the existing process you want to digitize?
  • What tangible KPIs can you define?
  • Launch an agile track and trace pilot.
  • Study your connectivity options to ensure reliable services.
  • Use Forrester’s TEI framework for your business case.
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