October 29, 2021

Traceability in Supply chain

The supply chain has become more complex as products flow up and down from/to various points more frequent basis. Numerous parties participate in the product supply chain and possess a wealth of knowledge and data. Industries must maintain product quality in order to safeguard their brand and to compete better. A rapid recall of a product can save a person’s life when a product that is directly tied to their health is discovered to be contaminated or of poor quality. In this instance, the producers must pinpoint the source of the problem and the product’s position. These are some of the challenges that necessitate product visibility across the supply chain. And traceability is a system that enables the resolution of all of these concerns. Traceability refers to the ability to track an entity’s history, application, or location throughout the supply chain using recorded identification.

Challenges faced during implementation 

One of the major challenges faced in implementing Traceability is the technology & data

While technology is expanding its reach while there are still a lot many warehouses still operate with paper at the integral points, although RFID chips and scanners are now conveniently available.

Among the factors impeding technology adoption include company executives’ lack of knowledge,the belief that it is a fad, and a desire to wait for wider acceptance before committing. Even company executives who see it as a promise are hesitant to spend money and effort in it due to the absence of industry-wide standards and processes. 

Thus, for it is to be effective, it is necessary for everyone in a typical supply chain business to be convinced of its benefits; key stakeholders must be on board and see the value in using it. As a result, market acceptance is a critical issue to address.

Complex worldwide supply chains, entail a large number of unrelated actors—producers, brokers, transporters, processors, wholesalers, retailers, and consumers—who may lack trust in one another. This has a significant impact on the level of collaboration. For instance, these players may be reticent to exchange data and/or engage in direct relationships or intermediaries that would facilitate the transmission, validation, and reconciliation of data across multiple parties. Business frameworks that enable coordination among these numerous participants are essential.

A significant difficulty in traceability is ambiguity in product information, which results from the recording of ambiguous and unclear product features that are difficult to track. This might be a result of inefficient and largely manual record-keeping, supply chain complexity, or identification lag time. Particularly difficult is the process of blending or comingling ingredients, or the utilization of a raw resource to generate a semi-finished or final culinary product. Traceability issues can also develop when items change their IDs or ownership, are repackaged, or transit international boundaries using different naming and labeling procedures.

Why Traceability is important in the current world

Having complete information on a product from conception to completion is critical for any business’s success. A traceability system is the finest instrument for obtaining and disseminating that information. It enables all supply chain actors to add value to the manufacturing and distribution processes. From product planning through disposal, and therefore to accomplish innovation in the product design process. Several of the system’s primary benefits are listed below

1. Transparency: To plan and act effectively, supply chain actors must be aware of the product’s know-how status. The product’s users must be informed of all pertinent information, such as the product’s ingredients, processing history, date of manufacturing, and country of origin. The entire manufacturing process, from conception to completion, should be accessible, allowing actors to access this information at any time. Traceability contributes to supply chain transparency
2. Quality Control: Customer happiness is critical for a business to remain competitive. The consumer is satisfied when they have trust in using the product and can obtain all necessary information about it. The company’s quality control method must be zero-tolerance throughout the product manufacturing process. Whenever a quality-related issue is brought to the attention of any actor along the supply chain, appropriate and immediate action must be made to enhance the design and manufacturing process in order to implement the necessary corrective actions in the subsequent lot or batch of production. To accomplish this, the players must trace back the supply chain and determine where and when production failures happened. A traceability system that includes a capability for tracing back helps actors manage the quality control process.
3. Decrease time to market: A traceability system keeps track of all pertinent information at each stage in the supply chain, establishing a link between all divisions within a business, from order processing to inventory management, processing, packing, warehousing, and despatching. This information enables actors to act in a timely manner, ensuring that all required products are made and delivered on time. This contributes to the total cost reduction of the manufacturing process, hence increasing the company’s profit.
4. Combating Product Counterfeiting and defending brand: A company develops a brand over time by producing novel products, maintaining a high standard of quality, and thereby garnering client happiness. This brand will vanish in an instant when counterfeit products bearing the same trademark but with inferior quality enter the market. Traceability enables the tracking of the original product along the supply chain, assisting actors in combating product counterfeiting.
5. Increased SCM efficiency: Traceability systems contribute to supply chain management process efficiency by decreasing costs, primarily logistics, by giving complete information from product conception to retail in the market. This enhancement fosters collaboration among supply chain actors, thereby strengthening their economic and technical capabilities.
6. Strengthen relationships with consumers: As previously stated, customer happiness is critical to corporate success, and satisfaction is obtained when we communicate with customers. The more information we supply to customers, the more connected they will get with the product and its producers. With an effective traceability system in place, consumers may access product-related information at any time, assisting actors in maintaining contact with them.
7. Increase competence: Knowing a customer’s purchasing behavior enables a business to make the goods on time and launch it appropriately in the market. A retailer’s traceability database enables him to determine which products are sold in what quantity and during what season. Similarly, he is aware of the type and brand of the goods sold and can thus determine the quantity of a particular product to order at what time to suit the customer’s expectations. This assists him in developing the confidence necessary to compete against competitors. It may also be a source of competitive advantage for supply chain partners, as traceability systems aid in increasing SCM efficiency by resolving product safety issues. It also assists the company in comprehending its logistic system and enabling them to create high-quality items on time.

Increasingly competitive marketplaces require businesses to have agile, effective, and efficient supply chain management processes. To accomplish this, businesses must have access to product data and information throughout the supply chain. They can track the location of products downstream and the processing history and other treatment of products upstream in the supply chain using an automatic traceability system. However, today’s supply chain is complex, with all actors geographically distributed throughout the world. They lack familiarity and trust with one another and hence are averse to sharing critical information on a global scale. This is a significant obstacle to creating an effective traceability solution. 

Businesses that invest in powerful traceability capabilities will be able to deliver the right product to the right location at the right time. All this with the appropriate level of customization and speed—all at a competitive price. Additionally, they will be able to meet critical sustainability expectations and regulatory needs from stakeholders. Additionally, they will be more resilient to supply and demand shocks. These capabilities will drive significant growth and profitability, as well as enable the development of new business models.