Maximizing the Retail Supply Chain
How to revolutionize your brand approach to create a truly frictionless retail customer experienceDownload the Whitepaper
Supply chain leaders have learned some valuable lessons over the past few years — chief among them is that they need to expand their supplier networks to keep goods moving and satisfy increased demand, especially in the face of volatility. For contingency planning and network expansion to be successful, leaders need a clear view of where both raw materials and finished goods are at any given point in time, which makes supply chain traceability an absolute necessity.
What Is Supply Chain Traceability?
Supply chain traceability refers to a firm’s ability to track the movement of goods — whether that’s raw materials from suppliers or finished products to customers — throughout the chain of custody. Supply chain traceability enhances transparency and visibility, enabling leaders to better anticipate (and plan for) disruption, reduce risk, meet demand, adapt to changes in the marketplace, and seize new revenue-growth opportunities.
How Businesses Benefit from Supply Chain Tracking
With greater visibility across the entire supply chain, businesses are better able to:
- Predict and Plan for Potential Risk: The key to supply chain traceability is real-time data, not only about the actual location of goods and materials in transit but also about conditions at each stage throughout the value chain. These conditions can range from environmental conditions, such as an incoming storm with the potential to delay shipments out of a supplier’s facility, to geopolitical conditions, such as international conflicts leading to raw materials shortages, and everything in between.
Being able to access this real-time data, as well as historical data, and use it to run predictive algorithms can help supply chain managers proactively assess and plan for risk, thereby enhancing supply chain resilience.
- Optimize Business Processes: With greater transparency comes the ability to identify (and solve for) potential bottlenecks within the supply chain. By uncovering and eliminating hidden inefficiencies, supply chain managers have the opportunity to not only streamline business-critical processes but also reduce operating costs.
- Optimize Costs: Traceability offers supply chain leaders a holistic view of costs so that they can make more informed decisions around sourcing and production to reduce overhead and boost profitability.
For example, two different suppliers — supplier A and supplier B — may offer the same raw materials for the same price. However, supplier A is located closer to your manufacturing facility than supplier B, meaning you can save on transportation costs, export or import costs, and duty costs by sourcing from supplier A.
- Improve Supply Chain Integrity: By tracking a product throughout its entire lifecycle — and beyond — a supply chain manager can identify any potential discrepancies or vulnerabilities in the sourcing, manufacturing, or distribution processes that could compromise that product’s quality, authenticity, and overall integrity.
- Ensure Regulatory Compliance: Supply chain traceability is closely linked to regulatory compliance in a number of industries, particularly in food manufacturing. According to various standards and regulations, including the ISO 9000 quality management and assurance standard series, the ISO 22005:2007 traceability standard, and the U.S. Food and Drug Administration’s Food Safety Modernization Act, manufacturers are required to monitor the location of products at every stage of the supply chain.
Supply chain traceability is especially important for managing recalls. Being able to track products based on their lot and serial numbers makes it easier for supply chain managers to locate recalled items and send out teams to withdraw them in the interest of consumer safety.
- Support Sustainability Initiatives: As a growing number of businesses set sustainability goals — more on that in just a moment — supply chain tracking and traceability will make it easier to not only meet those objectives but also validate claims of sustainability, strengthening brand reputation and consumer trust.
The Relationship Between Traceability & Sustainability
The concept of sustainability — that is, the ability to meet the needs of the current generation without compromising those of future generations — has taken on new significance in the face of the growing threat of climate change. Modern consumers are more aware than ever of the impact of their purchasing habits and are shopping accordingly. According to NielsenIQ data, 78% of consumers say a sustainable lifestyle is important to them.
In addition to being the ethical thing to do, committing to a sustainable business model and working to incorporate more sustainable practices has real business value. In that same NielsenIQ report, 30% of consumers say that they are more likely to purchase products with sustainable credentials.
Supply chain traceability enables manufacturers to validate their sustainability claims by demonstrating where they source materials from, how those materials are harvested, whether their manufacturing processes minimize environmental impact, and how their products are used.
Key Factors Driving the Need for Traceability
To say that supply chain managers find themselves in a difficult position would be something of an understatement. From navigating volatility within the global supply chain caused by geopolitical conflicts, natural disasters, cybersecurity threats, and pandemics to meeting fast-changing consumer preferences and demand for more sustainable products and processes, expectations are higher now than ever before.
All of these factors are driving sustained demand for supply chain traceability — and, consequently, supply chain tracking technology. This technology, when properly utilized, can give managers access to advanced analytics and data-driven insights, providing the visibility they need to optimize operations, minimize disruption, and innovate.
But implementing this technology is often easier said than done. According to a survey of supply chain leaders conducted by Bain & Company, 68% of executives said that they view supply chain traceability as either “very or extremely important.” Despite that fact, these same supply chain managers have struggled to identify a best-fit platform from a sea of solutions, and those that have implemented solutions have had trouble scaling them to accommodate changing business needs.
It’s clear that there needs to be a better approach to building scalable platforms that support supply chain tracking and traceability — and that’s where low-code development comes into play.
Enhancing Traceability Through Low-Code Application Development
Low code is a software application development technique that enables businesses to quickly and easily design and develop applications using a graphical user interface (GUI). Users of low-code platforms such as Microsoft Power Apps can create applications by simply dragging and dropping components into a flowchart-style arrangement. Once a user is satisfied with their arrangement, the platform will automatically program and generate code for that application.
The benefits low-code development offers are clear: Businesses can reduce development cycles for simple applications from weeks to just a matter of minutes, lowering costs, enhancing productivity, and increasing agility in the process. Using low-code development, supply chain managers can rapidly develop and deploy track-and-trace applications and scale those applications over time to adapt to changes in the marketplace and accommodate changing business needs.
Common examples of low-code applications that support supply chain traceability include:
- Automating integrations and approvals associated with change orders, receiving, and production
- Automatically capturing revised ship dates from emails or other systems, routing those revised dates for approval, and updating ship dates within enterprise resource planning and production systems
- Automatically capturing quality data from the production process and customer returns merchandise authorizations and storing it within a collaboration system such as SharePoint
- And much, much more
With over a decade of experience helping manufacturing companies build more resilient supply chains and a Microsoft Advanced Specialization to our name, Hitachi Solutions brings the right combination of industry and technical expertise to help you enhance supply chain traceability using the Power Platform.
Now is the time to prepare for supply chain volatility, embrace sustainability, and build trust with your customers — contact us today to get started.