Denis O’Brien is the Director of Standards & Solutions at GS1, a Global standards organisation assisting businesses to capture and send information. Denis spoke at the National Manufacturing & Supply Chain conference, pitching the benefits of incorporating tracebility standards into the supply-chain.
The vast majority of businesses use it in one form or another. Some rely on it, some view it as red-tape, others use it to optimize their operations. It is of course; documentation and data.
Traceability begins with documentation, be that in the form of hard or soft copies. As discussed in my previous post, documentation can be key to optimizing business operations, particularly in industries such as agriculture.
The traceability function has three main aspects:
- Identify – This is to mark each unit, stock, person, ect.
- Capture – This is done via writing the units down, or using barcodes, etc.
- Share – Collecting this data and using it to improve your processes or technology.
The aim of traceability is to integrate the supply chain. In examples such as the horse meat scandal, companies realize the necessity to have access to reliable information elsewhere in the supply chain.
Traceability can ensure quality controls are met and reliable products are provided to the customer. It also deters against counter-fit goods entering into the supply chain. It is not only the consumer or individual company that gains from an integrated supply chain, but all entities within the supply chain can benefit.
Denis divides traceability into two main categories:
Internal – Internal traceability refers to all the operations within the company’s walls. They are easily controlled, managed and changed. The company may determine the standards, technology and resources required, then adapt them when necessary.
External – External traceability refers to the rest of the supply chain. This is evidently more difficult to manage and control. There are several other interests, opinions and goals brought to the table, therefore achieving an agreed standard across the supply chain can be difficult to implement.
The traditional form of supply chain management is the ‘one up, one down‘ approach. This approach means that any one organisation should only deal with the organisation directly above or below them in the supply chain. Denis believes this model has become outdated.
The traceability network must be integrated, as shown in the feature photo above. Communication must be open, reliable and easily accessible for all partners in the supply chain. In doing so, a company can create a more appropriate and efficient model to improve the overall process to deliver maximum value to the customer.
Problems can be identified, information can be accessed and solutions can be implemented with far more efficiency when transparent procedures are shared among partners.
It is not only to identify and capture information, but through technological traceability, sharing has become a vital tool in optimizing a company’s processes.
Using softwares such as Bar-coding and Electronic Data Interchange (EDI), have already standardized this traceability network across several industries.
Realizing the potential for a reliable, standardized and fully integrated supply chain can be the starting point for not only optimizing processes, but to achieving a competitive advantage. Increased efficiency, waste minimized and reliable materials are just some of the benefits to adopting these standardized traceability technologies.
With the onset of globalization, ensuring that information is transferred successfully and transparently, is becoming even more essential in today’s successful businesses. Adding value to the customer is key, ensuring that every part of your supply chain is adding value is difficult, although achievable through transparency within the supply chain.
My Lessons Learnt:
- Information (data) sharing is key to optimization
- Transparency, accessibility and standardization within the supply chain are vital components to managing the supply chain.