Assessing the ROI of EPCIS 2.0 and the CBV Implementation

In today's global economy, supply chains have become complex and geographically dispersed, making it difficult for companies to effectively track and manage their operations. This is where EPCIS 2.0 and the CBV (Core Business Vocabulary) come in, providing businesses with the tools needed to improve supply chain visibility and streamline their processes. However, as with any business investment, the success of these solutions should be measured by their ability to generate a return on investment (ROI).

Introduction

The adoption of EPCIS 2.0 and the CBV has gained traction in the industry as businesses seek to improve supply chain visibility and efficiency. The EPCIS standard is a technical specification developed by GS1, an international organization that sets standards for supply chain management. EPCIS 2.0 focuses on improving supply chain visibility by allowing companies to share real-time data about the movement of goods and products among trading partners.

CBV, on the other hand, is a core business vocabulary consisting of a set of standard data elements, attributes, and values that define the information exchanged within the EPCIS 2.0 framework. CBV provides a standardized format for information exchange among trading partners, eliminating the need for custom integrations and supporting more efficient collaboration.

While the benefits of EPCIS 2.0 and CBV implementation are well-documented, it is important for businesses to understand the expected ROI before investing in these solutions. In this blog post, we will explore the key drivers that impact ROI and how businesses can measure the effectiveness of EPCIS 2.0 and CBV implementation.

Key Drivers of ROI

There are several key drivers that impact the ROI of EPCIS 2.0 and CBV implementation.

Supply Chain Visibility

Supply chain visibility is one of the primary drivers of ROI for EPCIS 2.0 and CBV implementation. With EPCIS 2.0, companies can gain real-time visibility into the movement of goods and products, enabling them to track items at each stage of the supply chain. This level of visibility allows businesses to identify and address issues quickly, improving operational efficiency and reducing costs.

Process Automation

Process automation is another important driver of ROI for EPCIS 2.0 and CBV implementation. By replacing manual processes with automated ones, businesses can reduce the likelihood of errors and improve efficiency. This can lead to significant cost savings over time.

Collaboration

Collaboration is a critical aspect of supply chain management, and EPCIS 2.0 and CBV implementation can improve collaboration among trading partners. By standardizing data exchange, businesses can eliminate the need for custom integrations, reducing the time and cost associated with collaboration. This can result in more efficient supply chain management and improved business relationships.

Measuring the Effectiveness of EPCIS 2.0 and CBV Implementation

To measure the effectiveness of EPCIS 2.0 and CBV implementation, businesses must track key performance indicators (KPIs) related to supply chain visibility, process automation, and collaboration.

Supply Chain Visibility KPIs

Some key supply chain visibility KPIs that businesses can track include:

• Inventory accuracy: Tracking inventory accuracy can help businesses identify areas for improvement and reduce inventory carrying costs.
• On-time delivery: Measuring on-time delivery can help businesses improve customer satisfaction and reduce costs associated with late deliveries.
• Lead time: Measuring lead time can help businesses identify areas for improvement in supply chain efficiency.

Process Automation KPIs

Some key process automation KPIs that businesses can track include:

• Cycle time: Measuring cycle time can help businesses identify areas for improvement in process efficiency.
• Error rate: Tracking error rates can help businesses improve data accuracy and reduce processing time.
• Resource utilization: Tracking resource utilization can help businesses optimize staffing and reduce costs associated with manual processes.

Collaboration KPIs

Some key collaboration KPIs that businesses can track include:

• Order fulfillment cycle time: Tracking order fulfillment cycle time can help businesses identify opportunities to improve collaboration among trading partners and reduce lead time.
• Order accuracy: Measuring order accuracy can help businesses identify areas for improvement in communication and collaboration with trading partners.
• Supplier performance: Tracking supplier performance can help businesses identify opportunities to improve collaboration and reduce costs associated with supplier errors or delays.

Case Study: Assessing the ROI of EPCIS 2.0 and CBV Implementation for a Global Manufacturer

To better understand the ROI of EPCIS 2.0 and CBV implementation, let's consider the case of a global manufacturer. The manufacturer produces a wide range of products and has a complex supply chain involving multiple trading partners, including suppliers and distributors.

The manufacturer implemented EPCIS 2.0 and CBV to improve supply chain visibility and collaboration among trading partners. To measure the effectiveness of the implementation, the manufacturer tracked key KPIs related to supply chain visibility, process automation, and collaboration.

Supply Chain Visibility KPIs

The manufacturer tracked the following supply chain visibility KPIs before and after implementing EPCIS 2.0 and CBV:

The data shows a significant improvement in all three KPIs after implementing EPCIS 2.0 and CBV. The manufacturer was able to reduce lead time by two days, which led to a reduction in inventory carrying costs and improved customer satisfaction.

Process Automation KPIs

The manufacturer also tracked the following process automation KPIs before and after implementing EPCIS 2.0 and CBV:

The data shows that the manufacturer was able to significantly reduce cycle time and error rates after implementing EPCIS 2.0 and CBV. Improved resource utilization also led to reduced costs associated with manual processes.

Collaboration KPIs

Finally, the manufacturer tracked the following collaboration KPIs before and after implementing EPCIS 2.0 and CBV:

The data shows a significant improvement in collaboration KPIs after implementing EPCIS 2.0 and CBV. The reduction in order fulfillment cycle time led to improved customer satisfaction and reduced inventory carrying costs. Improved order accuracy and supplier performance also led to reduced costs associated with errors and delays.

Conclusion

The implementation of EPCIS 2.0 and CBV can have a significant impact on supply chain visibility, process automation, and collaboration among trading partners. To assess the ROI of these solutions, businesses must track key KPIs related to these drivers.

By tracking KPIs related to supply chain visibility, process automation, and collaboration, businesses can gain insight into the effectiveness of their implementation and identify opportunities for improvement. The case study of a global manufacturer provides an example of the potential ROI of EPCIS 2.0 and CBV implementation.

Ultimately, the ROI of EPCIS 2.0 and CBV implementation will depend on a variety of factors, including the size and complexity of the supply chain, the level of automation already in place, and the specific business goals of the organization. Nonetheless, businesses that implement EPCIS 2.0 and CBV can expect to see improvements in supply chain efficiency, cost savings, and improved collaboration with trading partners.