Supply chain traceability allows you to track the origin and journey of your business’s products and their inputs through every step of the supply chain. For fashion companies, for example, supply chain traceability solutions document the chain of custody of your goods and inputs from the cotton source to the importer of record.
An effective traceability solution provides supply chain transparency. It allows supply chain managers to see critical information that improves decision-making and helps ensure they are meeting the business’s sustainability objectives.
This guide examines the type of information presented by supply chain traceability solutions and explains how businesses can use this data to improve operations and strengthen their brand’s integrity.
Chain of Custody Overview
A supply chain traceability solution will allow your business to track the chain of custody of your products and inputs. You can verify the origin and supplier of all the materials used in your finished goods before they are shipped, and you can make changes if you see any conflicts between the origin and supplier and their corporate sustainability efforts.
Enhanced traceability also allows you to see the physical location of shipments, when they are berthed and when they have cleared customs. It can also identify which items have trouble getting through customs efficiently and help you identify when you need to pivot to different suppliers or shippers.
Verifiable Sustainability Claims
Consumers want to work with sustainable companies. They want to be confident that they are not hurting the environment or supporting unfair labor practices with their purchases. To win over these socially conscious consumers, your business must emphasize the sustainability of your products, inputs, and suppliers.
A supply chain traceability solution provides clear visibility into every tier of your supply network. This ensures you can share sustainability information confidently and honestly with your customers, partners, and stakeholders.
When your business knows where your goods originate, you can ensure that they are compliant with government regulations. For example, you can use data from transactions to create compliance certificates that prove merchandise was not manufactured with forced labor. You can also use this data to ensure you are compliant with legislation that prohibits importing from certain parts of China or other areas of the world.
Traceability also makes it possible to collect and share documents related to each transaction. This includes purchase orders, packing lists, and invoices. Often, these elements get misplaced or discarded as supplies move through the supply chain, but this information is critical for businesses that want to be able to trace the movement of their goods and inputs through each and every tier of their supply network.
Enhanced Business Performance
Supply chain traceability doesn’t only help your business ensure your supply chain aligns with your corporate social responsibility objectives. It also provides you with real-time data that supports the proper decisions that improve the performance of your business.
In particular, your business can assess product movement, supplier performance, and vendor compliance. If you see issues, you can choose new suppliers or vendors or make other changes to your production and distribution strategies. Ultimately, data derived from a traceability solution allows your business to adjust your processes in ways that improve your ability to meet your customers’ needs on time and in full.
The analytical insights provided by traceability are also meaningful to your business’s finance team. When they have detailed information about how products move through the supply chain, CFOs can make more effective procurement decisions regarding raw materials or finished goods in ways that optimize working capital, ensure timely deliveries, and safeguard service levels. They can also use this data to improve the company’s market share and reduce the time to market while keeping customers satisfied.
Traceability helps your business preserve the integrity of your brand. Unfortunately, when businesses outsource to other companies, they don’t eliminate their own risks and responsibilities. If a supplier is engaging in human rights or environmental injustices, their actions reflect on their clients. Businesses that want to preserve the integrity of their brands need to understand the practices of their suppliers and other players in their supply chain.
By leveraging artificial intelligence (AI) to detect anomalies in the supply chain process, traceability solutions can unearth banned or unauthorized suppliers and identify risks related to supply disruption. The ability to identify risks early and accurately provides your business with the information you need to optimize your materials, production processes, and distribution channels. Your business can leverage this data to home in on the best strategies for your bottom line.
Supply chain traceability allows you to see what’s happening in every link of your supply chain so you can improve your business’s internal decision-making processes and align your business practices with consumer demands for transparency. A traceability solution also provides your business with actionable insights that help you accelerate social and environmental initiatives.
Check out this on-demand webcast for a lively discussion between myself and Eddie Hertzman, EVP of Fairchild Media, on the importance of traceability, sustainability and ESG.
EVP, Industry Principal, Logility Mark Burstein is a seasoned expert in fashion and retail working with the world’s most renowned brands. He is active in industry organizations including the National Retail Federation (NRF) and sits on the board of the American Apparel & Footwear Association (AAFA), the California Fashion Association and Goodwill Industries. He earned an MBA from Emory University and a bachelor’s degree in Finance from the University of Florida.