Trends Driving Need, but Existing Solutions Lack Maturity, Gartner Says

A variety of factors are coming together to increase the important of supply chain traceability as an element of supply chain visibility, but current software offerings lack maturity, and companies have been fairly slow to adopt third-party solutions.

That's the view of Gartner analyst Christian Titze, who recently wrote on the topic as part of Gartner's "predicts" for global logistics for 2017.

Supply Chain Digest Says... Many technology and supply chain leaders assigned with traceability initiatives lack a complete understanding of the functionality and benefits that such capabilities might offer for the end-to-end value chain, slowing progress.   What do you say? Click here to send us your comments Click here to see reader feedback

What are traceability solutions?

Titze says supply chain traceability is "a verification and risk management capability, allowing business partners, authorities and ultimately consumers to manage and respond to risks - occurred or potential - in a responsive and documented way. It is becoming a critical requirement for enabling product tracking, governance control and visibility across all stages of sourcing, production, distribution and consumption - the end-to-end supply chain."

Titze says that traceability has gained significant momentum globally, driven by new laws and regulations, the growing concerns of consumers relative to product safety and integrity, and the need for companies to adopt greater levels of transparency and responsibility, both to consumers and supply chain stakeholders.

Key trends driving the interest in and need for expanded traceability capability include, the following, Gartner says:

• Regulatory requirements, legal frameworks and guidelines within life science and food and beverage industries.

• Ethical compliance and environmental sustainable practices of companies.

• Security/safety for products that are at high risk for theft or counterfeiting across industries.

• History of movements (and conditions) of items - component, substance or product – and assets for complete, reliable and prompt recall operations.

Traditionally, Titze says, the main focus of traceability has been on upstream supply networks, tracking the source and origin of the raw materials and components. But the scope has now expanded to downstream capabilities, tracing goods along the multi-layer distribution networks through to the end consumer.

Of course, SCDigest notes, such downstream traceability is critical for effective recall processes, by more tightly limiting the products subject to recall just to the specific lot or batch where there is a safety concern, say in a food product.

From a technology perspective, achieving robust traceability capabilities is not easy.

Titze says "Existing enterprise application suites such as ERP, dedicated logistics and transportation suites and quality management systems, do not offer the required multi-enterprise visibility and traceability capabilities. The current market for traceability solutions is immature but emerging with vendors enhancing and integrating offerings along a product roadmap."

Naturally, solutions have started to emerge to serve particular markets, such as food/beverage and life sciences.

As of now, no single technology vendor offers capabilities that covers the full set of use cases for traceability, Titze says, making it important for companies to dig deep to make sure traceability solution providers have the capabilities their organizations require, or at least are rapidly moving that way.

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Titze also says that despite the significant need for traceability, many technology and supply chain leaders assigned with traceability initiatives lack a complete understanding of the functionality and benefits that such capabilities might offer for the end-to-end value chain, slowing progress.

SCDigest editor Dan Gilmore notes that "Robust traceability capabilities can often be justified from the reduced costs they provide from just one product recall. Yet, adoption has been slow in industries where recalls are common. This is a puzzling situation."

"Visibility was and still is a top priority with supply chain leaders," Titze concludes. "But now this foundational capability is enhanced, not only allowing to monitor orders, shipments, data and events in real time ("Is everything moving according to plan?"), but also to verify the history of movements and transaction handoffs across stakeholders - allowing organizations and authorities to withdraw, recall or reroute products identified as at risk, or documenting deviations across the regulatory compliance criteria."

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