4 Benefits of Supply Chain Traceability Solutions for Your Business
As firms add new partners, grow into new locations, and strive to fulfill ever-changing regulatory requirements, today’s global supply chain requires increased visibility. Implementing supply chain transparency has become essential for businesses to assure quality, secure products, protect consumers, optimize inventory location, and ensure on-time market delivery.
To meet these requirements, companies require tools that support faster reaction times for managing potential recalls and avoiding dangers posed by faked goods and counterfeit items that could harm brands and compromise customer safety. Businesses must use technology that enhances their ability to monitor and trace products across the product lifecycle throughout the supply chain.
Overview of Supply Chain Traceability Solutions
Traceability in the supply chain enables the tracking of products from the source to the customer. Supply chain traceability examples include using blockchain technology, customizable tracking templates, and technology-backed package labeling linked to unique digital product IDs. Businesses can respond swiftly to costly supply chain interruptions to mitigate risk and speed up any necessary recalls.
Creating a transparent supply chain allows businesses to scout and clear bottlenecks to maintain control. Supply chain traceability is also essential to many businesses for sustainability and CSR initiatives.
According to Bain’s Global State of Traceability Report, a conversation with 150 top supply chain professionals indicates that 68% of executives consider traceability to be “very or extremely critical.” This is evidence that supply chain traceability solutions are essential for developing data systems with high integrity for valuable assets.
Benefits of Supply Chain Traceability Solutions
Traceability in the supply chain is the key to understanding how products are manufactured, where they’ve been, and where they’re going. Below are the benefits of traceability in supply chains that every business should consider.
1. Brand protection and consumer satisfaction
Customers evaluate a company based on product quality and response to an issue. Brands cultivate consumer loyalty by being honest and providing constant product and service excellence. Customers are lost when brands fail to react to complaints and problems.
Supply chain traceability is useful when investigating a consumer complaint. It is also necessary when evaluating a prospective recall and administering an actual recall.
Any large recalls have a substantial effect on a company’s stock performance and bottom line. Implementing a traceability solution will expedite recalls, strengthen collaboration with authorities, facilitate improved information exchange with customers, and control the damage to brand reputation. Only with a solid supply chain traceability solution can batch recalls be conducted more rapidly.
All the things you produced and sold must be labelled to determine their origin. Manufacturers can trace a defective unit’s life cycle in reverse. The information gathered via traceability includes the date and time of production, machine used for production and packing, staff involved in the production and packaging, raw materials, and inventory locations.
2. Transparency about sourcing
According to the 2021 “Transparency in an Evolving Omnichannel World” Research by FMI and NielsenIQ, approximately three-quarters of respondents believed that it is “critical” for brands and manufacturers to be transparent, such as:
- Calculating a manufactured product’s carbon footprint
- Lessen waste in the supply chain by generating data via product tracking and tracing
- Make data-driven predictions in the supply chain to reduce costs, improve efficiency and access intelligent insights
3. Discovering supply chain weak areas to prevent forgeries and theft
Among the worst events that can happen to a business is its products being stolen or counterfeited.
Not only do counterfeits result in an immediate loss of sales, but customers may also lose confidence in the brand. If someone receives a substandard counterfeit product using a brand’s name and emblem, there is a good possibility they will be disappointed with them and take their wallet elsewhere. If items are misdirected or stolen, the company loses money and may be faced with a more significant supply chain issue.
Other supply chain bottlenecks include poor storage methods, inefficient operating processes, poor inventory management, insufficient supply chain transparency and limited resources.
Traceability in the supply chain functions as a forensic tool to combat counterfeiting, diversion, and many other issues. That is why investing in data analytics technology can help to gain data insights from specific bottlenecks, understand how to solve and prevent the same issues in the future.
For instance, a company can identify where a batch of food products may have been damaged or compromised through food traceability and sustainability, which data will reveal if a shipment deviated from its specified route, which could suggest theft or other misdeeds detrimental to bottom line and reputation.
To eliminate counterfeits in the market brands can implement product-level anti-counterfeiting measures by using technology like smart cards, color-shifting links, RFID tags, UV inks, digital decoding, holographic images, unique identification codes on packages and electronic tax verification systems. Integrating multi-faceted anti-counterfeit programs into the supply chain can protect companies against counterfeiters.
4. Helps in building stronger partnerships
The benefits of supply chain transparency extend beyond your consumers. A company with a transparent supply chain fosters a culture of trust across its whole ecosystem and attracts suppliers and partners with similar values.
Moreover, a culture of trust will facilitate open communication with your suppliers, the formation of long-lasting partnerships, and the constant improvement of supply chain partnerships. When suppliers see that honesty and openness are valued, they are much more inclined to settle production difficulties with ease, lend better credit terms and supply higher quality products.
Companies should also urge their suppliers to get the latest traceability powered inventory management systems to enhance production, and improve management. These can be achieved by enhancing supply chain communication, exchanging quality control data and inventory management best practices, and providing compliance training.
Supply Chain Traceability Solution is the Next Revolution
In an increasingly uncertain global economy, there is rising pressure on leadership teams in every business to increase sustainability, performance, and resilience. A supply chain traceability solution can help companies achieve these objectives and gain a competitive edge.
Companies with extensive traceability systems can deliver the best product to the correct location at the most appropriate time with accurate customization, at scale.
Blockchain is also a powerful tool emerging in today’s supply chain processes to address deficiencies in end-to-end traceability, financing, coordination and speed of product delivery. Meanwhile, Web3 offers a compelling case, especially for the shipping sector to boost collaboration in disparate systems.
Companies will also be able to meet the primary sustainability needs of stakeholders and regulatory obligations with a sustainable traceability app. In addition, they will be more resilient to supply and demand disruptions. These capabilities will produce robust growth and revenues and enable the development of new business models.