By Terry F. Yosie
Traceability has become a hot topic as global companies try to stay ahead of real-time consumer reaction that spreads like wildfire on social media. From fruits and vegetables to pharmaceuticals, traceability systems are being used to track product ingredients, movements and ownership throughout the supply chain to improve products and services.
This was a major topic in February at the first meeting of the Innovations for Environmental Sustainability Council, which the IBM formed with the World Environment Center and companies including Boeing, CH2M Hill, Coca-Cola, Dow Chemical, F. Hoffman-La Roche, General Motors, Ingersoll Rand, Johnson & Johnson and Walt Disney.
We agreed that as advances in technology have made it easier to acquire and analyze information about product development, distribution and use, the issue of traceability has moved front-and-center for business and competitive strategy.
The speed of supply chains has created more challenges for companies, where even minor missteps can have major consequences. Because supply chain issues can have a lingering impact on brands, the effectiveness of traceability has become a concern of supply chain executives and chief marketing officers alike.
Take the food industry as an example, where the need to monitor and trace the safety of the food supply has never been more crucial, or more difficult. As food systems become increasingly global, more producers, distributors and retailers must follow unique standards of quality, processing and accountability for multiple countries, which compounds the complexity of the task.
The implications are real: Up to 30 percent of populations in industrialized countries suffer from food-borne illnesses each year, and about 1.3 billion tons of food are lost or wasted each year around the world.
But we are making progress. China’s Shandong Commercial Group, the world’s largest producer of pork, has stepped up its traceability efforts to track and monitor meat as it moves from farm to market. They are using software, sensors and GPS technology to construct a system throughout its regional supply chain. If illness strikes, as it did with the swine flu pandemic in Europe during the last decade, it can be quickly identified, isolated and addressed.
That’s an example of smarter supply chain management that’s interconnected and collaborative, with networked processes that improve efficiency and transparency. This approach makes it easier for organizations to achieve end-to-end traceability of their inventories, from raw materials to product components and finished products.
Such traceability systems benefit businesses and consumers alike. Applications can include consumer safety, temperature tracking, speedy product recalls, and reduced spoilage and waste.
With the proliferation of smart technology, predictive modeling for supply chains has become a reality. Traceability technologies can be integrated into business processes so companies can prevent problems before they crop up. When materials and products are equipped with sensors and GPS technologies, companies can verify whether bananas are truly organic, or where antibiotics were compounded. Wineries can calculate the best time to harvest grapes, and furniture manufacturers can learn the provenance of lumber.
The era of traceability is in full swing. Companies that embrace the systems, processes and practices of smarter supply chains can introduce innovations that improve the relationships with their customers, strengthen the integrity and performance of their operations, reduce costs, and advance their competitive position.
Terry F. Yosie is President and Chief Executive Officer of the World Environment Center in Washington, D.C.
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