We helped FM Logistic launch the goods marking service in 5 months
FM Logistic, headquartered in France, is a global logistics corporation. Nestlé, Wrigley, Auchan, Michelin, Volvo and over a thousand other major players entrust their supply chains to it. FM Logistic has 22 warehouse complexes with total area of 816,000 sq. meters across Russia. Total warehousing space operated by FM Logistic is 4,000,000 sq. meters on 3 continents (14 countries). Net revenue of FM Logistic is €1.4 bln. FM Logistics aims to become the leader of sustainable omnichannel supply chains and builds its processes and IT infrastructure to continuously improve its services.
Its logistics services are full-scope, from transportation and storage to picking and delivery of B2B and B2C orders to consignees. The services are comfortably, transparently and reliably realized through the whole company-client relationship process.
The FM Logistic Business Challenge
In 2019, Russia introduced the law on digital marking of tobacco products, perfumes, clothing, footwear, tyres, photography equipment and other product groups. Most FM Logistic partners have such goods in their range. The logistic provider anticipated that its customers would be disposed to outsource the code marking routine and contemplated offering this service as an option.
There was no off-the-shelf solution for it at either IT or management level. The other FM Logistic locations also had no experience with such services.
All processes had to be developed from scratch, and asap: the niche was free and attractive to many companies.
In 2019, FM Logistic straight off started developing an IT marking solution with another contractor. Yet, after a year of efforts and millions invested, they ended up with an unstable system; any failure in it could cost FM Logistic and its partners financial losses and criminal prosecution.
And then the task was handed over to the kt.team.
Within the shortest deadlines, deliver the launch of the service for product code marking based on the Chestny Znak (Honest Mark) system and tracking the movement of marked goods to FM Logistic. The IT system that provides the service must run 365/24/7 and be capable to handle the simultaneous processing of dozens million codes.
Marking is More Than Just Sticking s Label
The digital marking law was adopted for better transparency of commodity markets and tapering off counterfeit sales. Hence the goods to be marked need not only to be "code-labeled" right after production or crossing the border, but also be traced on their journey from the manufacturer to the end customer, with transfer of the data on each goods movement step to controlling authorities.
The life cycle of marked goods has five major stages; each has several business processes with branches and limitations implemented within it. The goods owner must report each change in their status to Chestny Znak.
Plus to that, marked goods also move within in-house business processes of FM Logistic.
- visited FM Logistic's warehouses twice;
- spent hundreds of hours on phone calls with FM Logistic, from warehouse operators to division managers;
- analyzed the marking laws;
- studied the core business process and dozens of nested sub-processes involving marked goods;
- figured out how the Chestny Znak system works
before starting out with coding.
This allowed us to avoid the previous contractor's mistake. Instead of taking an existing application for warehouse scanners and 'rebuilding' it (the way our colleagues had chosen), we developed a microservice system from scratch. The product was called ParaDigMa.
Result 1. FM Logistic Bears Minimum Extra Staff Costs for the Service to Get Codes from the Chestny Znak System
We have fully automated the process of obtaining the Chestny Znak codes. FM Logistic's staff handles only the incoming documents upload operation and the final operation of attaching labels with codes to packages.
ParaDigMa analyses uploaded invoices and searches for the goods to be marked. It filters out the invoices that do not contain such goods. For the invoices that contain such goods, ParaDigMa highlights their type and quantity, and then auto-requests the codes from the Chestny Znak. The codes loaded into Paradigma are automatically linked to the product name.
The staff receives a ready-to-use list of codes with the right type and quantity. All that remains is to print out and attach them.
Result 2. All Movements of Goods, from Receipt to Withdrawal, Are Auto-Registered in Chestny Znak
The marking code is scanned at any operation with goods. Examples include stock-taking, intra-stock movement, wholesale, sale to the final consumer, returns, consolidation into an LTL freight or kit, etc.
Depending on the operation type, ParaDigMa performs a set of actions ensuring the data transfer to the Chestny Znak system: it searches for a code in its database, checks its current status, verifies its new owner and last owner, requests a change of status or transfers the freight handling stage data.
In this way, FM Logistic helps customers comply with legal requirements without unnecessary costs for in-house staff and IT.
Result 3. FM Logistic Clients Can Choose Whether They Need the Whole Service or Just a part of It
The marking and tracking service is made of a group of microservices, each of which has its own application area.
The microservices are interrelated, but can also run autonomously.
For example, an FM Logistic client sources the marking out or makes it in-house. However, at will, it can upload the codes to ParaDigMa and commission the further tracking of goods and the data transfer into Chestny Znak to FM Logistic. Optionally, either for in-stock movements only, or up to withdrawal of goods from circulation.
The ParaDigMa perfume marking service was launched in 5 months in MVP mode (August 2020-January 2021), and fully deployed in 8 months (April 2021).
The system consists of microservices. There are 20 million lines of code in its core. By comparison, a space shuttle is controlled by 400,000 lines of code
Over 2021, 25.72 million items were coded through ParaDigMa.
6 FM Logistic partners – Shiseido and Chanel among them – use the full ParaDigMa marking and tracking service.
Two other FM Logistic partners obtain codes through another service, but use ParaDigMa for tracking goods while they are in the FM Logistic ecosystem.
ParaDigMa runs 365/24 and does not need disconnection for servicing.
Up to 300 FM Logistic employees work in ParaDigMa at the same time; in parallel, the system receives data from the client's three WMS systems and exchanges data with the Chestny Znak system and alternative marking service providers.
In April 2022 we added marking of further product groups: footwear, clothing; bedding, table-, toilet- and kitchen clothes. We are ready to link up, with minimum adaptations, the product groups "new pneumatic rubber tyres", "cameras, flash lights and flash tubes", "bicycles and bicycle frames", "wheel chairs", "packaged water", and "dietary supplements".