The Rise of Product Traceability in Manufacturing
Today, product and part traceability has evolved to be a ‘must-have’ aspect in the manufacturing and retail/logistics industry. The development of technology in this segment has helped to streamline and avoid various manufacturing and operational issues. Product and part traceability has enabled both accurate information and precise identification of products. It has helped to minimize product recalls, enhance quality control, optimize production processes, and avoid counterfeit products.
Product and part traceability is identifying and tracking products across a supply chain. This process helps to track products and parts from the manufacturing unit to the final consumers. The parts that are produced within the same batch code will be more or less of the same quality, making it easier to locate all the products that may have a defect or deformation. If there’s an issue with one part or product from a particular batch, you can easily identify all the products from the batch and locate their origin or where it has been sent.
Product and part traceability increases supply chain visibility by organizing its data. It consists of logging information in a centralized database to track products at every stage. The key to precise and accurate information via product and part traceability is having a centralized system. There are various platforms and technologies that help to create a centralized traceability solution, making it more achievable than ever.
The Importance of Product Traceability
The main aim of product traceability is to track the movement of the product across the supply chain with the help of a unique identifier. The unique identifier scans the product, along with its box or pallet. The scanning can be done at several stages of the production cycle. In contrast to product traceability, logistics traceability is used to follow the products along with their box or pallets after they leave the manufacturing unit.
Product and part traceability is crucial to protecting the consumer and is about easily recalling a defective or deformed product back from the market. It also increases awareness of the product’s origin and its conditions among the customers.
One of the most challenging aspects for manufacturers lies in the ‘middle’ of the supply chain, where the products are either with the distributors or the channel partners, posing a substantial data collection challenge. Through product and part traceability, manufacturers can determine if their distribution network is functioning aptly and locate whether the distributors are breaching any rules by selling to unlicensed markets.
The Impact of Product Traceability
Product traceability has had a significant impact on the management of distributor inventory and demand forecasting. Without product and part traceability systems, it was impossible to trace damaged goods back to the source. Modern traceability systems have made it possible to locate recalled goods and follow them through their supply chain.
There are various regulations for several industries that mandate products to be traceable to the unit level, and the only way to achieve this is via serialization. Serialization includes printing and labeling unique codes on products and packaging.
Combating counterfeits is an ongoing struggle for the manufacturing industry. Counterfeit goods don’t just hurt the business or present the consumer with low-quality goods, but they also put the end-user at risk, and sometimes, even their safety is compromised. Product traceability and marking technologies play a key role in combating counterfeit goods by authenticating the product properties and verifying products as they move through the production cycle.
Blockchain Technology for Enhanced Traceability
The aim of blockchain technology is to address the various management issues that are experienced in the current supply chain sector, such as paperwork, counterfeiting, and product mislabeling. Blockchain technologies are being used to build a more transparent supply chain through a data infrastructure that securely tracks and traces products.
Blockchain technology is a digital system or a decentralized ledger. This system is designed to record transactions between multiple parties to ensure transparency, but it does so securely and in a verifiable and immutable manner. The transaction records that are noted in this system help to monitor every phase of the supply chain and the business transactions.
Walmart is one of the top leaders in supply chain management and is now using blockchain technology to create automated processes. Walmart has specifically adopted this technology to handle invoices to include various data points. These data points need to be accounted for in each invoice, and this is where blockchain technology has been particularly useful. It has eradicated discrepancies and reduced reconciliation efforts that were often labor-intensive and time-consuming.
Blockchain’s Impact on Product Traceability
Blockchain technology offers a comprehensive audit trail and allows the safeguarding of the various identities, production processes, and other confidential information across all stakeholders of the supply chain. A blockchain network resolves various issues by introducing a single source of credible information that’s immutable.
The decentralized nature of blockchain provides greater transparency, thereby proving to be an effective anti-counterfeiting measure. By combining the existing technologies with blockchain, companies can securely and reliably track and trace all the transactions that take place across the supply chain.
Industry Applications of Product Traceability
One of the industries where product traceability is not just a good-to-have aspect but a necessity is the food industry. An effective traceability system in the food industry helps to isolate contaminated products and prevent them from reaching customers. Food traceability processes help businesses to minimize trade disruptions and enable them to be compliant, improve inventory management, and maintain a positive brand image.
The healthcare industry is another sector where product traceability is of prime importance and is a matter of complying with the regulations. Traceability systems in the healthcare industry enable businesses with complete visibility regarding the movement of prescription drugs and medical devices. Through traceability systems, one can identify the history of the transfers and locations of a product from the point of manufacturing via backward traceability and track the product route towards the patient or the customer via forward traceability.
The retail industry has also incorporated product traceability systems such as RFID tags on their products. RFID technology offers various advantages to retail sector companies, such as stock visibility and greater control of the supply chain. It also enables complete product visibility, from its origin to its sale, thus enabling reliable and real-time information on the product’s history.
Product traceability has made a huge impact on authenticating products for the cosmetics industry. Counterfeit cosmetics pose a real threat to both consumers and brands. Product traceability helps to tackle the issue of counterfeit products through unique digital product identifiers, which capture real-time data at every stage of the supply chain, thus empowering companies by mitigating financial aspects.
Conclusion
Blockchain technology offers a comprehensive solution for product traceability, enhancing supply chain transparency and addressing various management issues faced by manufacturers and retailers. By integrating blockchain with existing traceability systems, businesses can securely and reliably track and trace all transactions across the supply chain, ensuring product authenticity, mitigating counterfeiting, and providing a comprehensive audit trail.
The adoption of blockchain-based traceability is on the rise, and industries like food, healthcare, retail, and cosmetics are leading the way in leveraging this technology to improve transparency, compliance, and consumer trust. As the demand for more ethical and sustainable products continues to grow, blockchain-enabled traceability will become an essential tool for businesses to differentiate themselves, optimize their operations, and build a stronger connection with their customers.
