Traceability Primer

Supply chain actors implement traceability standards, processes and best practices to meet a wide array of business, technical and regulatory requirements. Traceability is also a very effective management and governance tool that can be integrated into the existing business processes and extended supply chains activities of any company. Enabling standards-based traceability brings about seamless interoperability between supply chain actors. It also delivers enhanced visibility into an actor’s supply chain activities: from receiving of products or components to production, warehousing, and dispatching of products to other supply chain actors or directly to end consumers. When reviewing specific needs, actors will implement various levels of product traceability to enable those needs.

Drivers for Implementing Traceability Best Practices

Traceability & Industry Standards

Supply chains can be global and complex. There is not one simple schema describing who is involved in the supply chain, from upstream to downstream in all industry sectors. Yet, there are typical roles and functions in all supply chains. By the time a consumer product is purchased, consumed or used, it may have gone through a number of supply chain events and physical transformations. Each event or transformation may have involved a number of different actors. Tracing the products history becomes a critical and urgent requirement when an unsafe product has caused harm to a consumer or user of the product.

Traceability DefinitionTraceability is the ability to trace the history, application or location of that which is under consideration. (ISO9001:2000)

4

UPSTREAMSUPPLIERS

INTERNALManufacturing / Assembly &

Storage

DOWNSTREAMCLIENTS

ENABLE DOWNSTREAM TRACEABILITYENABLE UPSTREAM TRACEABILITY

Traceability: Generic Principles & Aims

ENABLE INTERNAL TRACEABILITY

INTERNAL TRACEABILITY

5B2

Organisations

Organisations with defective products

Product Flow

A3 B2 C1 D1 E3

A2

A4

A5

A1

B1

B3 D2

D3

E2

E1

E4

E5

A6

C2

B4

E6

Manufacture 1st processor 2nd processor Distributor Point of Sales

TRACING (to trace backwards)

Traceability – General Principles & Aims

6

A3 B2 C1 D1 E3

A2

A4

A5

A1

B1

B3 D2

D3

E2

E4

E5

A6

C2

B4

E6

TRACKING (to track forward)

Traceability – General Principles & Aims

Manufacture 1st processor

2nd processor Distributor Point of Sales

B2

Organisations Product Flow

Defective Product Flow

Organisations with defective products

Terminology Challenge

Product supply chains involve many actors – from brand owners, own-brand retailers, designers, manufacturers, contract manufacturers, producers, value-added services providers, distributors, retailers, Internet retailers, importers, brokers, carriers, third-party logistics, product safety testing and certification bodies, and many others. Although these terms for actors are commonly used, they may:- be used in different ways depending on the context, reference document and

associated definitions;- cover various functions as actors may perform a range of functions (e.g. a

retailer can play the role of an importer and a brand owner of own-branded goods identical to, and owned by, other parties, but will have different identification codes);

- have legal implications for reporting of unsafe products and remedying the issue; and

- have legal and financial liability associated with them that requires risk assessment and product liability insurance coverage for both the physical product and possible litigation.

Traceability Data – can be both public and private

Master Data: permanent/lasting nature, relatively constant across time, not subject to frequent change, accessed/used by multiple business processes and system applications, neutral/relationship dependent

Transactional Data: created during the physical flow of goods, can only be collected when events occur.

Building Safe & Secure Supply Chain is multi-faceted

Cumulative tracking

Single source data base

Distributed Information SourcesOr « traceability network »

One up – One down

Types of Traceability networks

For limited communities

Driven by regulations

The optimum model for the

future ?

Next Generation Strategy: “Value Traceability”

supply chainoptimizationcompliance

branding&

marketingrisk reduction

Reduce Risk

Asset Optimiz.

Increase rev.

Lower costs

Delivering….

Consumer Focus

100% Perfect Recall

100% Traceability

Differentiation

Compliance Traceability

While compliance and risk reduction aspects can be critical, they do not encourage investments beyond the required minimum

FOCUS:stay in business

FOCUS:increase value

Value Traceability