From governments and regulatory bodies to companies and consumers, the value of supply chain traceability has become more easily understood. Supply chain traceability is defined as the ability to identify and trace the history, distribution, location and application of products, parts and materials, to ensure the reliability of sustainability claims in the areas of human rights, labor (including health and safety), the environment and anti-corruption. It allows us to verify where resources or materials come from, as well as product quality and authenticity.
Historically, the pursuit of product traceability began in the 1930s when some European countries aspired to prove the origin of high-quality food such as French champagne. These days, traceability remains a prominent issue in the food industry because products are something experienced and consumed by people on a daily basis. TechNavio’s analysts predict that the Global Food Traceability market will grow at a compound annual growth rate (CAGR) of 9.88% over the period of 2014-2019. Traceability has become important in other industries as well, due to product quality, safety and security being universal issues.
The pursuit of traceability presents many challenges, especially for large companies. When companies manufacture a variety of products from raw materials sourced globally, they face a giant task of fully tracing all the materials or resources used since documentation and disclosure standards vary across the globe. Another challenge is the cost for supply chain actors. Tracing materials along the supply chain requires substantial investments in technology and processes. Further, coordination between suppliers and manufacturers involves time and resources.
Achieving full traceability includes various levels of verification necessary throughout all stages of the supply chain. Suppliers are located around the world, some in remote areas. Language, skill and access barriers require technology that ensures access to data systems that are secure for all users. Companies should push their support for the continued expansion of traceability schemes to deliberately increase the number of certified commodities a particular product requires, which will also increase the sustainability of product lines.
With progress towards global industry-wide traceability, companies need to initiate support for the innovation of tools and technologies that will increase the progress significantly. The long-term benefits are well worth the effort: businesses who require traceability throughout their supply chain gain operational efficiency and process consistency. Moreover, meeting stakeholder requirements is easier with additional information about the product. Overall, traceability leads to a more organized and sustainable supply chain.
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