There could be many reasons that traceability is useful or required for supply chains. For example, quality assurance and consumer confidence play a major role in the food supply chains. In pharmaceutical supply chains, safety and the facilitation of product recalls might need the help of traceability. While the term ‘traceability’ is frequently heard in supply chain management and is reasonably well known by the general public, having a system that provides reliable and trustworthy traceability information in a cost-effective fashion remains as a challenge for many, if not all, supply chains.
With the emergence of Industry 4.0 and the technological development for Internet of Things (IoT), supply chain traceability information might be more readily collectable and easier to manage. Supply chain traceability provides verifiable traceability information about products, which is not only useful for and satisfy the increasing need of the end users or consumers, but also can provide decision support for companies operating along different supply chains. In this sense, supply chain traceability enables customer satisfaction and marketplace understanding, which are crucial elements for supply chains to be successful.
Establishing supply chain traceability relies on a wide range of expertise and innovative approaches. These include a thorough understanding of supply chain business processes and operations, business optimization, artificial intelligence and Internet of Things.
A recent project, led by Dr Yong Wu from the Department of Business Strategy and Innovation at Griffith University, has demonstrated how supply chain traceability could be established for the meat industry. The project addressed the challenge that there are instances where red meat products have been falsely marked as products of Australia in order to take advantage of the perception of premium quality. It investigated how product traceability could be achieved at different levels for the Australian red meat industry. Reports of the project (funded by the Australian Meat Processor Corporation, AMPC) can be accessed at https://www.ampc.com.au/2020/04/Blockchain-for-the-Meat-Industry-Where-and-How.
A study like the above AMPC project presents great opportunities for businesses.
- Opportunity to review current supply chain. Supply chain traceability needs to be established based on thorough understanding of business processes and operations, which usually can be leveraged as an excellent opportunity to critically review supply chains and make improvements accordingly.
- Market and early adopter advantage. Supply chain traceability can offer market advantage in a future market. Product provenance is becoming an increasingly important consideration for consumers. Early adopters of supply chain traceability might gain advantages such as product competitiveness or customer loyalty, as a brand which gives consumers confidence in its authenticity and quality may secure or capture more market share in the future. Traceability information can be further used as a differentiator to offer the ‘story’ behind products for better promotion and engagement with consumers.
- Regulatory compliance and risk. Supply chain traceability information provides regulatory compliance and reduces risks. It will not take too much imagination to see how supply chain traceability information could help if it were available during the case of strawberry needle contamination. Supply chains will have a much quicker response to an emerging health-related situation, and more importantly limit the extent of damage arising from the incident to different parties along the supply chain.
Associated with the opportunities, there are challenges need to be considered when establishing supply chain traceability:
- Need for collaboration and cooperation. Usually a supply chain wide approach is required to ensure traceability information is properly collected and maintained, which in turn needs collaboration along the supply chain.
- Costs. The initial investment for infrastructure and information systems for supply chain traceability could be considerable. How should each supply chain partner contribute to this investment needs to be clear before a traceability project starts.
- Benefits. Benefits are good, they should not be a challenge. However, who will be able to enjoy and how much of the benefits derived from supply chain traceability will also need to be clearly defined and the mechanism agreed.