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Why You Need Supply Chain Traceability

June 20, 2022

There’s never been a better time to improve your supply train traceability. As COVID-19 has impacted supply chains across the globe, visibility gives your business credibility and your customers a sense of trust.

Understanding Supply Chain Traceability

In the simplest of terms, Supply Chain Traceability, or SCT, is the process of tracking products as they move along the supply chain. This starts at the beginning, from raw materials to their finished product, all along to where they are delivered for wholesale or retail.

SCT provides opportunities to ensure efficiency, meet regulatory requirements, and provide transparency to clients as they wait for their products. One of the best ways to visualize SCT is by utilizing pictures or scannable QR codes on packaging. These codes can be stored in a database of tracking, where customers can see visually where their order is.

Different Types of Traceability

Chain Traceability

Chain traceability is the history of “procurement of raw materials and parts to machining, distribution, and sales” either forward or backward. Manufacturing companies can see where their products are, where they have been delivered, and where they are going. This is also beneficial to consumers.

Internal Traceability

Internal traceability monitors movement within a specific area. This can be in a single company or plant, where several different parts are put together in different buildings or parts of a single building. This type of traceability collects and manages what has been done in manufacturing processes, to ensure efficiency and timely work. It also helps ensure quality.

Industries Using Supply Chain Traceability

Many different industries utilize SCT. From food industries to pharmaceutical supply chains, and even clothing manufacturers, SCT helps ensure quality and sustainable practices.

Food Industry

There is growing consumer demand for transparency when it comes to where their food is grown, how it’s grown, how it’s transported, and how it’s treated once it reaches the retail site. Additionally, many types of food require constant temperature monitoring to ensure quality and safety, and FDA regulations require records to be maintained and up to date to ensure food safety.

As more people demand organic and sustainable food choices, SCT is one way to give consumers a peek into where their food is coming from. But even more important than that is the ability to track an illness back to its source. SCT gives the FDA a way to trace where an outbreak began and help inform the public of what foods to avoid and where they have gone throughout the country.

Pharmaceutical Industry

SCT in the pharmaceutical industry is important in a similar way to the food industry. It ensures quality and safety, reinforces authenticity, combats counterfeit drugs, helps manage drug recalls, and keeps an effective inventory.

Clothing and Fashion Industries

Similar to the desire for consumer sustainability and organic foods, there is an increasing interest in purchasing sustainable and ethically produced clothing. SCT allows consumers to trace where their clothing was made and how it was made. The desire for more sustainable clothing is increasing by leaps and bounds; the state of New York recently announced it would pass legislation setting regulations for sustainable fashion, and it probably won’t be the last to do so.

Benefits of Supply Chain Traceability

If you’re still on the fence when it comes to SCT, here are a few reasons to implement it as soon as possible:

  1. You have a competitive advantage. As more consumers and retailers are demanding SCT, if you implement it now, you’ll have the edge over shipping companies that don’t use it. Only 23 percent of manufacturing companies use SCT, though the demand on the consumer side is increasing. 
  2. Increase in counterfeit goods. In 2018, the number of counterfeit goods seized increased by 8 percent. By participating in SCT, you can ensure the products you handle meet safety and quality standards from the first. 
  3. Global supply chain. As the world of manufacturing expands, literally, the pressure to provide more information about products and materials increases. From their origins to where and how they were transported, SCT gives an easy way to report on where your products are coming from. 
  4. Product recalls. One of the most effective ways to ensure safety when it comes to product recalls is through SCT. It can protect companies against liability in the event of a recall, as well as the safety of consumers. 
  5. Improve industry regulations. In relation to counterfeit products, SCT also helps modernize manufacturing regulations to help improve the safety and quality of goods. 
  6. Production issues. SCT helps with quality control issues, process mistakes, late deliveries, defective products, inventory shortages, and legal liabilities.

What to be Aware of with Supply Chain Traceability

Supply Chain Traceability is not as easy as 1-2-3, or simply taking a picture when a box is loaded onto a truck. As more supply chains are disrupted this year, as in the past few years due to the COVID-19 pandemic, SCT has become more essential but has also faced more challenges. These challenges can be simplified into three categories: who, what, and when.

Who

Choosing who has visibility into supply chain information and why can be a challenge. Should it be internal stakeholders, consumers, or clients? Determining who knows where products are coming from and where they are going should be determined ahead of time.

What

What information is shared? How is it shared (a list or a map)? What types of information need to be included?

When

How often will information be updated and shared? Many companies face pressure to update their SCT in real-time, which presents its own set of challenges. Choosing when you want to update the “who” as mentioned above is one of the most important questions to ask when implementing SCT.

How Do You Implement Supply Chain Traceability?

Implementing SCT goes beyond just sustainability. It also helps improve efficiency, competitiveness, and safety. So how do you begin? Start by looking at the Who, What, and When. Think about what you want to track. There are seven steps to keep in mind, which will give you a jump start on traceability.

  1. Sourcing. Where is the product coming from? How was it produced? If it was food, were pesticides used? 
  2. Processing. Where was it produced? Were chemicals used and if so, which ones? What happens if the factory is disrupted? Are the people working there treated ethically?
  3. Packaging. Is the packaging certified BPA free? Is the packaging made from recycled content?
  4. Distribution. How is the product traveling to the consumer?
  5. Consumption. Who will purchase this product?
  6. Disposal. How is the product disposed of? How is the packaging disposed of? 
  7. Circularity. Can this product be reused? Does circularity create new business opportunities?

By answering these questions, you’re off to a good start in implementing SCT. While at first, it might feel complex and painful, choosing SCT gives your company an advantage in the long run. Whether it’s for quality assurance or liability, cutting costs, or increasing consumer satisfaction, you’ll be glad you’ve implemented supply chain traceability.

Arm Your Supply Chain with Best-in-Class Technology Today

At First Call Logistics, we understand that each business’ supply chain has unique needs. Our best-in-class technology seamlessly integrates with industry-leading transportation and logistics ecosystems for advanced visibility, stronger collaboration, and improved business continuity. To learn how you can leverage First Call’s robust suite of technology to optimize resources, minimize costs, and provide better customer service, contact us today.

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