Product Traceability in Supply Chains: The Definitive Guide
Published: 2024-01-17 10:39:30

In response to this increasingly challenging phenomenon, many of the world's leading brands have invested in product traceability systems, tools that allow companies to control their products throughout the supply chain until they reach the end customer. Traceability technology is advancing rapidly and has changed a lot in the last two years; QR codes are scanned hundreds of millions of times a day by billions of people, and RFID chips appear in more and more products, and both “tags” establish important functions in traceability programs.

## What is product traceability?

Product traceability refers to the ability to track and trace products in their supply chain from production or manufacturing to the end customer. Product traceability requires the generation and organization of supply chain data and is used to increase supply chain visibility.

Technologies for product traceability have developed rapidly in the last decade alongside the emergence of regulatory requirements for unit-level tracking of tobacco products ( EU, 2014 ), pharmaceuticals ( USA, 2013 ) and medical devices ( EU, 2017 ). Today, many industries have begun to adopt traceability technologies for their benefits beyond regulatory compliance. Modern **[traceability solution](https://www.transgenie.io/traceability-software)** are benefiting companies in the following ways:

- Establishing visibility of distributor and channel routes and mapping the product path to market
- Detection and identification of sources of product diversion and parallel imports
- Creation of tools for demand forecasting and inventory planning
- Track recalled items, returned products, and damaged and defective products
- Promote sustainability programs such as recycling, carbon footprint monitoring and the circular economy
- Build trust with customers by communicating product provenance and sustainability

Highlighting the importance of traceability for sustainability, the European Union's Green New Deal has defined digital product passports, which include standards to trace a product's inputs, as a key initiative to drive companies to be more sustainable. , covering a wide range of industries and products.

## Summary of the technologies necessary for product traceability

Traceability requires some combination of the following technologies and technical processes, although not all are mandatory:

1. A system for generating unique codes or labels for products, from thousands to hundreds of millions. This is often called “product serialization.”
2. Hardware and processes to print and apply unique identifiers such as barcodes, QR codes, data matrices or electronic chips (RFID, NFC) on product packaging, boxes and/or pallets.
3. Devices for scanning codes on products throughout the supply chain, such as cameras, chip scanners, handheld devices, and smartphone-based mobile applications.
4. Monitoring of logistics units for containers, trucks, etc. – often with GPS and environmental sensors.
5. Integrations between your enterprise resource planning (ERP) and manufacturing execution (MES) systems, printing and warehouse systems, and your traceability platform to capture all relevant supply chain events at their source.
6. A **[product traceability software](https://www.transgenie.io/traceability-software)** system or software platform that provides a single source of truth across all supply chain data sources.

## What is upward and downward traceability?

Supply chain traceability can be divided into “ upstream ” and “ downstream ” traceability. The first refers to the origin and route of the inputs, ingredients or raw materials of your product, while the second refers to the tracking of your product after production through the supply chain to the customer.

## What is the difference between “track and trace” and “traceability”?

Both “traceability” and “track and trace” are often used interchangeably to refer to product or supply chain traceability. Traceability is increasingly popular today and can refer to both upstream and downstream use cases.

## What is product traceability vs. logistics traceability?

Product traceability focuses on assigning a unique identifier or code to each individual product and maintaining a record of each product's journey through the supply chain. This usually requires scanning equipment and personnel to scan the product and its box, pallet, etc. at multiple points in the supply chain.

Logistics traceability usually refers to the tracking of containers or other logistics assets using GPS sensors throughout their journey on trucks, ships and planes.

To achieve product traceability across multiple distribution points and to the end customer, it is often more practical to independently collect product location data from QR code or RFID scans than to try to integrate it into multiple data systems. logistics.

## Advantages of product and supply chain traceability and visibility

Traceability brings significant value to companies with complex supply chains and distribution networks, as it can detect parallel imports, improve distributor inventory management, simplify product recalls, contribute to regulatory compliance, help to achieve sustainability objectives and communicate the origin of products to end customers.

## Conclusion:

This definitive guide on **[product traceability in supply chains](https://www.transgenie.io/traceability-software)** underscores the paramount importance of transparency and accountability in today's complex business landscape. As industries embrace advanced technologies, from blockchain to RFID and IoT, the journey of a product from source to end-consumer becomes more traceable than ever before.