Supply chain traceability is often confused with supply chain management (SCM) when there are differences, and the two terms should not be used interchangeably. SCM is an internal matter that has to do with managing inventory, supplier relationships, and logistics.
Supply chain traceability is becoming an increasingly important external matter related to the provenance of goods and how they arrive in the consumer’s life. This means access to a supply chain map to show whose hands the product travels as it is manufactured.
Higher expectations around traceability
More customers want to know where their products originate as consumer consciousness is at an all-time high. People want to spend their money responsibly.
Part of this is knowing that the manufacturer and supplier sound environmental practices, do not exploit others, and do things in keeping with expectations created in their marketing campaigns. For example, if a food product claims to be organic, supply chain traceability should prove this.
In other cases, supply chain traceability is a safety matter, as in the pharmaceutical industry. If there is a problem with a drug, its production progress must be traceable to identify where the issue arose to correct it. After all, lives might be at stake. This is more of an internal process as matters of confidentiality might feature and cannot be breached.
Many industries must comply with regulatory traceability practices for safety purposes, such as the food, pharmaceutical, and chemical industries. Mandated procedures include tracking products and manufacturers throughout all processes.
Companies reduce risks of SCM issues by implementing traceability systems that include mapping the product’s life from end-to-end. This means including lot and batch numbers on parts from suppliers to track and trace inferior quality products that do not meet company specifications.
At Specright.com, the software allows a company to link Supplier Corrective Action Reports (SCARS) and customer complaints to a specific lot or batch for immediate intervention to rectify a defect or problem.
A detailed supply chain map shows where raw materials are sourced, which companies and organizations work with them during manufacturing, shipping, storage, sales, and deliveries. It can go as far as detailing individuals’ names responsible for critical tasks, although this is internal information and would not be published publicly.
Supply chain transparency
There are three questions to ask when determining what to do with a detailed supply chain traceability map. First, who will have access to the information, and what will they be using it for? This could include internal and external stakeholders, customers, and product consumers.
Second, what type of information should be shared, and how detailed does it need to be? Third, how frequently will the data be shared and updated, and how close can it be kept to being real-time given clients’ and customers’ desire to see things as they happen?
The answers to these questions guide the nature of the supply chain traceability and transparency mapping process. As mentioned before, the traceability map might be adapted to suit the purpose, such as a version for consumers that will contain less detail than a version for the board.
Advantages of supply chain traceability
Analyzing a company’s supply chain can highlight areas of risk to the company that might disrupt production, result in inferior products, or cause a bottleneck in manufacturing. For example, a supplier who has delivered poor quality products poses considerable risks to meeting demand for a product.
Traceability allows for quick interventions, which could include canceling a contract and seeking another supplier, returning inferior parts for replacement, or placing an emergency order for additional supplies.