In today’s consumerist economy, the sale of a good or service is not merely a transaction – it is a brand promise that what is being sold to a consumer is genuine. The idea that a product isn’t what its seller claims it to be is highly detrimental to consumer perception. The trust that is built gradually over time depletes instantly and damages the brand, delivering a possibly fatal blow to future sales.
Long term sales, an important parameter of overall business success, is compromised when a consumer is given a product that is inauthentic, inferior, or unsafe. A brand’s social dimension, defined by the information shared by consumers online and through word-of-mouth, also takes a hit. With their aggressive focus on product data quality, today’s consumers are also acting as activists, taking action against brands that do not deliver on what they promise.
Counterfeit products like medicines, faulty medical devices, contaminated foods and unreliable sourcing practices threaten the safety of the public and erode consumer confidence in the brand and destroy its reputation.
Counterfeit medications, faulty medical devices, contaminated foods and unsustainable sourcing practices threaten public safety, waste precious natural resources, erode consumer confidence, and destroy brand reputation. If companies refuse to invest in due diligence, they will suffer the brunt of superfast exchange of information about their products on social/ media and its adverse effects on the brand image. Along with affecting those who sell through shopping websites, brick-and-mortar retail will also be affected. Consumers will instantly switch their loyalties to companies who can build and sustain a sense of trust and transparency among consumers.
Traceability is the ability to verify the history, location or status of an item by means of documentation. In the process of traceability, serialization along with unique identifiers are assigned to consumer goods/complex medical devices as the first step towards complete, end-to-end visibility over supply chains.
Disruptive technologies, such as artificial intelligence, the Internet of Things, blockchain and collaborative platforms, can take traceability systems to another level by offering detailed reports on any product’s status and movements and creating direct links between the various stakeholders along the supply chain, low taper from producers to end users.
Traceability can be adapted to any industry. In fact, some sectors, such as the pharmaceutical industry, are subject to legislation that requires it, such as the European Union’s Falsified Medicines Directive (EU FMD) and the United States Drug Supply Chain Security Act (DSCSA).
GS1 Traceability Service:
GS1 India, a supply chain standards organization, has launched its traceability service for businesses. The service seeks to provide brands with complete track and trace of their products across the supply chain.
Created in response to growing demands of establishing end-to-end traceability of the products in the supply chain and the consumers’ questions on the product origin, the service enables brands to gain end-to-end supply chain visibility and an ability to give access to this information to consumers for product verification.
Based on the principles of linking physical movement of good with the information flow, it ensures product information transparency. Besides, traceability also helps in reducing counterfeits by enabling counterfeit detection right at its source.
End-to-end traceability is the ability to trace all products right from the procurement of raw materials to production, transportation, and consumption. It fosters increased visibility in the supply chain and promotes quick identification and redressal of issues such as delays, quality control, and accountability. Traceability plays an indispensable role in every industry, be it healthcare, FMCG, apparel or energy by empowering them with accurate product details and detailed documentation of the entire product lifecycle. As a result, businesses profit from swift deliveries and process efficiencies.
Regulatory Compliance
Regulators have become extremely stringent and will continue to be so to establish a compliant framework in the industry. This causes immense pressure on the companies as now they have to work under constant regulatory scrutiny. Traceability comes as a rescue to all the companies who have been walking on a tightrope because of this. It allows business owners to provide end-to-end traceability and a complete audit trail of their products. This helps in avoiding any confusion or discrepancies that may occur while in the supply chain cycle, nurturing trustworthy relationships.
The role of traceability is not limited to encouraging lasting and healthy relationships, but also, in strengthening efficiency, resource optimisation, and risk mitigation at each stage of the supply chain. The data extracted through traceability authorises the business owners to zero on the process incompatibilities and refinement areas. Furthermore, it cultivates a streamlined and transparent approach to managing product details in a centralised database, promptly.
The Importance of Data Integrity
When accurate and real-time data is stored and captured, data integrity will automatically boost. It is no wonder that products whose information is accurate have a higher chance of reaching consumers securely. Traceability captures authentic data right from the source or manufacturer, eliminating product information intermediaries and false information. This motivates business owners to adopt traceability to maintain their product data integrity.
Empowered Consumers
The benefits of traceability for sellers and consumers go hand-in-hand. Access to accurate and authentic product information to the end consumers builds their confidence and trust in the business, boosting business sales. Consumers feel more empowered when their right to information is provided in full without any disruptions. Consumers can know the exact manufacturing place of the product and authenticate the product ingredients or development process.
Product traceability has numerous benefits in the manufacturing industry
Product traceability provides multiple benefits, some of which are mentioned below –
Material and information flow mapping – Material and Information flow mapping, also referred to as Value Stream Mapping, is a step-by-step process of bringing goods into the market. This method allows business owners to visualize the steps effectively and eliminate any unnecessary steps that can cause disturbance or delays. Traceability during this mapping is crucial as it provides businesses the information on what and when about the products and helps identify loopholes in the process. You can monitor the operational steps, time, and quality of the products and work on improvements wherever necessary.
Supply chain management – In the supply chain, the role of traceability is inevitable. You can see the entire product journey on a single platform and raise concerns in case of any disruptions.
Conduct in-depth analysis – Traceability allows you to have an in-depth analysis of your product journey, starting from the procurement of the raw materials to its consumption by the end consumers. Leveraging traceability you can swiftly navigate through any difficulties and always be prepared for the future.
Room for continuous improvement – Traceability promotes continuous development in the processes. Business owners can identify problems and work on them when they can trace their products effectively.
Where traceability can come up short – and how to fix it?
Traceability can bring progress in an organisation only when it is leveraged most productively. In any industry, traceability has its loopholes and requires immediate action and assistance failing to which the organisation may have to experience a downhill. To avoid this situation, traceability training at all levels should be made compulsory by organisations. Traceability systems should be regularly audited to prevent or manage any future challenges. In addition to this, it is important to ensure product development and procurement are being done in tandem with consumer needs with the help of traceability.
Conclusion
For any organisation, traceability is a testament to the organisation’s value and product integrity. So, if you are a business owner make sure you have a proper traceability system in place to track your products efficiently and elevate your customer experiences. Ensure your product information reaches the right audience at the right time at the right place with end-to-end traceability.
Frequently Asked Questions
1. How does traceability help in ensuring product quality and safety?
Organisations can trace their product journey hassle-free from a single platform with the help of traceability. This helps in ensuring product safety and quality at different levels of the supply chain.
2. Can traceability be applied to various industries beyond manufacturing?
Traceability can be applied to any service or product industry wherein there is a requirement to track products. As a business owner, you can trace your product’s journey directly from the manufacturing of the product to its consumption.
3. What are the primary challenges in implementing traceability systems?
Achieving interoperability, regulatory compliance, data security, and manual data entry are some of the key challenges organisations face while implementing traceability systems. To avoid such challenges, it is advised to get registered with GS1.
4. How does traceability contribute to regulatory compliance in different sectors?
In different sectors, traceability promotes the visibility of products in the supply chain, ensures product authenticity, and finally contributes to regulatory compliance.
5. What role does technology play in enhancing traceability processes?
6. How does traceability impact sustainability and environmental responsibility?
Traceability directly impacts sustainability and environmental responsibility by helping reduce waste production. It helps to authenticate if the products are made in environment-safe best practices and using safe raw materials.
7. What are the key components of a robust traceability system?
A robust traceability system is one where all the staff members are trained on its application and use. Where no data is fed manually and information consistency is maintained throughout the process.
8. How can businesses leverage traceability to improve inventory management?
With traceability, businesses can know in advance when their stock level is insufficient or when there is a chance of overstocking. This information helps them keep a sufficient inventory level and manage it proactively.
This episode of our podcast focuses on explaining traceability to brand owners and what should they look for in a traceability solution?
Supply chain visibility is generally the starting point for predicting demands, gaining visibility, sustainability, ensuring effective recalls and safeguarding business from counterfeit. But things are generally not simple as they should be. Various applications and systems being sold promising to meet that need but how should one evaluate them. Let’s find out.
Transcript:
Hello, friends! This is our first podcast of the series – Supply Chain Insights. Here, we will discuss various supply chain issues, global standards to address them, and their benefits to consumers and different industry stakeholders.
Today, we have with us Mr. Bijoy Peter, to help us understand some of the basics of a traceability solution and why should manufacturers have it?Bijoy has been working closely with the Indian industry for over 10 years. In this time span, he has worked with organizations of all sizes, studied their needsand consulted them on selecting and implementing the right traceability solution.
So, Bijoy, let me start by asking what is traceability and why do you think that Indian brands need it when government recalls are unheard of in Indian scenario?
Traceability is an important business requirement in today’s context. Primarily, because the consumers are increasingly getting conscious about products, which they buy and consume. If anything goes wrong during the transit process in the supply chain or during the production process, etc.,or if any product withdrawals need to be made, it is very much required for the brand owner to know which product is lying where in the supply chain. In today’s context, the supply chain is not just regional, it can be at a national level and it can even cross borders. Also, it helps in safeguarding the brand image because today, the impact of social media networking sites is huge. If a consumer finds something wrong in a product, that message can spread like wildfire and brand owners may not have much time left to take corrective actions.
Besides non-food and non-healthcare categories, is there any other product category that requires a traceability system? If yes, why?
Every product has got a shelf life. If you look across industries, be it food, beverages, personal care, healthcare, agriculture, even in technical industries, you can see that every product has got a shelf life,or every product is perishable in nature. The life of the product could be 1 day, 1 month, 1 year or may be a few years. Most of the times, it is important for a brand owner to keep track of the batches that are being produced and are released into the supply and logistics network until the life of the product. It is essential for a brand owner to ensure that he has control of what is moving where.
One very interesting thing you have mentioned here. The way you are seeing traceability is the complete visibility of the supply chain. But if something goes wrong in the raw material, can brand owners also trace that using a traceability system?
Yes, they can. Where and in which part in the supply chain you are implementing the traceability system also matters. Largely, brand owners take responsibility of downward supply chain because once they produce the product and it is sent to his distribution network, to his warehousing network, to his retailers, consumers, etc., that is the point where the brand owner generates business. But all these products also have a lot of input raw materials, which he must be sourcing from n number of suppliers. A final product or a finished product can also go wrong because of some defect in the input raw materials. From a perspective of traceability, it is not only essential in downstream supply chain, but it is also essential as far as the upstream supply chain process is concerned.
How do companies generally reach to the need of a traceability solution?
When companies establish a traceability system, it all starts with a basic inventory management in warehousing. They want to automate their inventory process. If you ask them what is the problem they are trying to address by virtue of having some systems in place?They say they are finding issues as their later batches are getting delivered before the earlier batches. Most of the companies find it difficult to maintain the concept of first-in-first-out or the first-expiry-first-outin the supply chain process. If they do not have a proper process in terms of controlling this first-in-first-out or first-expiry-first-out process, they will end up sending products into the supply chain or into the logistics network, which probably would be expiring very soon or which probably will not have a necessary shelf life in place. They will then realize at some point of time that in their warehouse, a huge stock might be lying, which will expire very soon.
Besides expiry management, what is the need for visibility in a supply chain?
The requirement for visibility in supply chain can come up because of various reasons. Most of the product segments in today’s context are vulnerable to counterfeits, diversions, etc. There the use of traceability is primarily to know what is moving where, and from that perspective they can put measures and systems in place in order to avoid diversions, counterfeit products, infiltrations, etc.
If a consumer is complaining about some performance issues of the product and if the brand owner would want to trace it back, and track which batch and what has been the components that have gone into those batch of product and what were the componentof those batches because components keep coming and assembling happens and finished products goes into that. If you look at it from that perspective, there the need is different but by and large the system remains the same. They also need downwards supply chain tracking and they also need upwards supply chain tracking. The intention and the use case might be different. So, this is basically in terms of after sales service. Everything will come into place based on how fast the brand owner can respond to such situations. The response level of a brand owner to any consumer complaint originating out of any product, will elevate the consumer trust in that brand.
Are there any characteristics that brands need to keep in mind before selecting a traceability system or is there one system that kind of fits all companies of all sizes?
How to select traceability system is a very subjective question. When you talk about traceability system, for most people, the perception that comes to their mind is that traceability is an application. It is some sort of applicationwhere they log in and get report for what is moving where. But that is just one element of traceability system.
So, what is a traceability system?
Traceability system is a composition of best practices, best process management, IT or automation, implementation of IT systems to enable automations, and information capture. Traceability systemis very subjection, When we say, traceability system, it involves process improvements – how the brand owner receives his raw materials, how the raw materials will go into the production process, how the finished goods products will be produced, where it is being stored, and from there what are the different locations where the inventory movement happens and how it reaches the retailers and how it eventually leads to the consumers. There are different touch points from the time a product is produced till the time it reaches the consumers.
Also, what kind of systems are required and how the traceability system needs to be implemented purely depends upon what level of tracking and tracing the brand owner wants. It can also be decided based on the sensitivity of the product, which he wants to trace.
Like you said that one needs to have an end-to-end traceability system for it to be effective. What you mean when you say that at what level do you want to track?
Ideally, a traceability system should be end–to–end. But there will be different factors which come into play when any brand owner or any company wants to implement traceability. Most of the companies when they start the business, the focus is around expansion or growth of the business.
Whatever traceability systems or process that they have implemented may not be effective as they scale up or as they expand their business process. So, if someone is taking traceability as a business need right in the beginning, the focus should be on kind of systems he implements. Whatever systems he implements should be agnostic to any kind of vendor dependency, it should necessarily have adoption of standards – what are the best standards in identification, data capture and information sharing is concerned, irrespective of whatever technology is being used. Third aspect of focus should be whether the system or the process or the application which is being implemented would help him to scale enough as the business scales up. In a way it should be scalable, the interfaces should be based on best standards and the business processes needs to be realigned according to achieving the end result of traceability.
Sounds like quite a problem at hand specially for brand owners. How should they tackle this with the right traceability system in place?
The first and foremost step is to establish a link between the physical movements of the goods with the information flow. Then depending upon the criticality of the item that they are tracking or depending upon the value of their tracking, they can decide on what kind of data capture technologies they want to use – whether it’s a barcode, whether it is an RFID or any other data capture technology. Third aspect is that you need to have a system of uniquely identifying the product in your supply chain. Fourth, your system interfaces should be built in such a way that if there are multiple stakeholders who needs this traceability data of your products, you should be in a position to share that information.
So, when you say that you need to physically identify batches, capture the batch number or batch identification in your application, who should do it?
This information is available on every product that we buy from the market, which is largely in human readable format. When we are talking about an effective traceability application, it is where we link physical movement of the goods to the information flow.
Automatic data capture technology needs to be used in order to facilitate capturing this information from time to time and without error. While this information is available to us in human readable format, this manual feed into systems can lead to human errors and effectiveness can go down. So, the best technology which can be used by any brand owner and it has to be done at the source, whoever is producing the product, whoever is actually building a finished product, pushing it into the supply chains, they will be the stakeholders who should actually capture this information.
So, generally, if they are using a barcode or if they are using a RFID tag, etc. what essentially it requires is, it should have the ID and if they intent to track it, it is again based on the criticality of the product, it should have the batch number of the products. So, these two should be the minimum things appearing on the barcode.
Nowadays, with the emergence of 2-dimensional barcodes, you can even capture more information into one single barcode with little space. It will enable you to capture the product ID, the batch number, even expiry date, manufacturing date, etc. This could enable any person who is processing that product while he is receiving or sending it, his systems will be in a position to identify the shelf life of the product, etc., automatically, rather than any manual intervention in place.
By virtue of this, it (traceability)also enhances the efficiency of various inventory management processes, receiving, issuance, or physical stocktaking in the warehouse, etc.
You are saying that the information is in a human readable format and they have to put barcode but most of the products already carry a barcode, which a retailer scans when we buy a product.
The barcode which you find in most of the products that you buy from the market is just carrying an ID of the product, which will help retrieve information about the product as to what product it is, net content, price, etc. and it is largely used for point of sale application. It also enables the company in terms of tracking the product in supply chain and it becomes like a universal ID in terms of enabling all the supply chain stakeholders to identify what the product is. The brand owner gives that ID to the product. But critical informationlike the batch number, expiry date, etc., still appear on the product as human readable information.
For instance, if a retailer wants to have traceability of the product that he is buying in his own supply chain, he captures this information manually while he receivesthe product. So, he scans the product barcode, then he captures the expiry date, then he captures the batch number if the product is critical, i.e., of short shelf life, etc.
This information can very well apply on the cartons and the boxes in which the products have moved in the supply chain. There is a product and the product go into the boxes and these boxes move to the supply chain. From the manufacturing process, let’s say from the factory, it goes to warehouses, it can go to distribution centres, it can go to distributors, and then it can go to retailer’s distribution centres and then while it reaches the retail store that product is actually coming out of the box.
If you look at it from a brand owner perspective, if he has a barcode on his carton, which has information like product ID, batch number, expiry date or maybe any other information which can enhance the efficiency of his supply chain then he has good tracking in his supply chain. That is kind of a level 1 traceability system, which we can introduce.
Second aspect that comes is that he wants to make sure that even if it gets into the retailer’s shelf, at that point of time also there needs to be a traceability, then the brand owner can think about having a 2D barcode on his products, which can carry this information.
With the emergence of QR code technologies and GS1 standards like Digilink, etc., the brand owners can also help consumers, who actually buy this product, get traceable information about the product because if they read this QR code using any normal reader on their smartphones it can take them to places where the brand owner is tracking in the supply chain till the point it reaches the consumer.
There are two things that are coming to my mind – one is you said one needs to put a barcode on the carton. So, if a manufacturer puts a barcode on a carton, because the bigger cartons will be opened and smaller cartons will be created at the distributor end or at a wholesaler end, how do that work? And if there is a barcode and somebody needs to scan it who should be scanning it and how, in order to establish traceability system?
This is where the business process is going to play a critical role. If you look at the packaging scenarios in consumer goods, there will be outer cartons, there could be scenarios where outer cartons can have inner cartons and then there will be the products this inner carton, etc.
If you go and look at all the healthcare regulatory traceability requirements across the globe, there is a need of tracking the outer cartons, inner cartons and even at the primary product level, etc., because medicines and drugs are always considered as very critical from that perspective.Whereas in food and beverages and consumer electronics goods, by and large, there is two layers of (identification) in these product sectors. That is why in most of these electronic products nowadays there is a practice, you will find some sort of two-dimensional barcodes in electronic products which you buy, which has got serialisation in it. So, traceability in a perspective, it can vary from product to product.
If someone says that no I need to make sure that every unit which is produced and sent into my supply and logistics network I want to have a track of where all this this each unit of product, that is where it becomes unit level traceability. There, we get into a situation, which is largely you can see in healthcare sector – serialisation. Secondly, it also depends upon what is the problem which the brand owner is facing.
Most of the brand owners get into unit level traceability when they feel that there is lot of counterfeit infiltrations happening and he wants to have a track of every individual unit which is being circulated in the supply chain.
Whereas, in some customers, the business requirement for a company would be if I get a consumer complaint I should be in a position to locate my batch from my supply chain and remove it from my supply chain and take corrective actions at the earliest possible. There they will only look at batch level traceability.
Based on what you just said, each trading partner including retailer, distributor and a wholesaler would need to scan each box or a product unit using a manufacturer app. How feasible is it for trading partners to do that in an open market?
Serialisation/unit level trace tracking, etc. has largely been regulatory driven and the product where there is stringent regulations existing where all the stakeholders have to comply with certain guidelines as far as the storage and the movement of the product is concerned or the selling of the product is concerned. That is why such track and trace applications you will largely see in healthcare sector because it is regulatory driven. And since there is a regulation in place, the stakeholders in the supply chain have no choice other than following the regulation.
Serialisation is also used by many other brand owners as a voluntary initiative. There will be certain level of the supply chain that the brand owners will have control over. For instance, in his own supply chain he will have his own warehousing network etc., or he will have his own distribution network. Every brand owner and whoever has implemented this is to try and keep control on track things to the best level in the supply chain where he has control on it.
Serialisation by virtue of large adoption of smartphones and using QR codes, there is an ability which the brand owner can give to the consumer because once he buys it (product), using normal smartphones,and aconsumer can at least do the authentication of the product and can obtain deeper information about the product which always lies with the brand owner. Even if there is a break of tracking from the distribution network to retailer, etc., eventually if a consumer tries to track it.
Now the question is that if someone copies that or duplicates that number, there will be certain level in the supply chain where the brand owners will have control of. From wherever the consumer query is coming, he can fairly predict that whether this was supposed to be there or whether this verification has already been done in his system already. These are the areas which will give him alerts as to take necessary action.
One of the use case is most of the brand owners can tell the consumer that yes we have a system in place and tomorrow if there is a consumer complaint they are better equipped to investigate and find what is going wrong where. It is kind of a detection mechanism. If these systems are not there, they (brand owners) would be unable to detect what is happening.
It can also be a mechanism for the brand owner to give the consumer more information which probably he was not able to communicate via the labels on the product.
There are various brands that we use in everyday life. And there are so many authentication apps. Is there a common data base for a consumer to refer to or a brand to put their information on?
The database can be common, the database can be different. But the point here is that all this need to be interoperable. Largely there are lot of traceability service providers in the market, they have their own systems in place, and different customers use their services. There will be other traceability service providers where other companies will be using their service. They all have their own interfaces, which would enable consumers to validate.
From that context if you want to look at you will end up downloading a lot of mobile apps.
This is not feasible as well because I as a consumer would not know which app to download for scanning of which product.
Absolutely. This is where the industry has to come together and promote a common platform, which would enable product information repository, which would enable common interface for the consumers to validate information related to the product.
To address this problem in India, we have Smart Consumer mobile application which would enable consumers to scan the product barcode and get basic information or the label information about the product. He is in a position to validate the FSSAI licence number and many other regulatory aspects related to the product, asian pinayetc. This can be extended further to have more information even traceability information also as part of the product.
What is a Smart Consumer mobile app? What type of products are there in the app? Why should a consumer care about installing the app or using it?
If you look at smart consumer mobile application platform, as of now more than 15,000 companies are publishing product data onto smart consumer.We have close to around 10 million product data which is already being published to Smart Consumer mobile application.
We also see lot of consumers downloading this on a voluntary basis and we also see lot of scanning of products, which happens in Smart Consumer mobile application. This would enable consumers to get authentic product information because the information which is published in the Smart Consumer application is by the brand owners.
Brand owners can take this platform and extend it further in terms of enabling the consumers or empowering the consumers with more product information – it could be traceability information about the product, it could be marketing and promotion information about the products, or anything which they wish to share with the consumers, or anything which they wish to talk to the consumer about the brand.
Are there any challenges or possible reasons why Indian brands don’t opt for a traceability solution?
Why brands don’t opt for traceability or why brands are doing traceability is truly dependent upon what kind of business problems the brand has. Most of the companies wish to have a traceability system in place but are confused as to how to go about it.
Large amount of companies jump into traceability implementation by virtue of looking for solutions. They look for what kind of systems and applications available in the market or solution providers are there. They go back and evaluate their software applications and then they take that directions.
Most importantly before jumping into any traceability application implementation, the brand owner has to do is go back and review their supply chain process entirely, make a judgement in pinay kantutan terms of till what level in the supply chain he can bring in controls, and why he needs traceability and at what level he needs traceability. There is a lot of homework or preparation he has to do before getting into the conclusion as to what solution he needs as far as the traceability is concerned.
Without doing all this if they jump into taking any kind of traceability off the shelf application available and try to retrofit that into his processes, many things may not work or may not be a successful implementation. And it has to be taken always in a gradual process. Then, decide upon a course of action and what kind of approach and what kind of application and solutions which is going to be used.
And the starting point should be what he is trying to achieve.
Absolutely. The objective needs to be very clearly defined.
Does traceability system impact business growth in any way and how?
It has impact as well as it enhances. Because if any brand is going for traceability implementation, it’s a change management. Change management will definitely impact the business. Change management will definitely slow down business processes. But if it is being well prepared, well thought out plan, if it is executed well, then it will definitely enhance the efficiency and will definitely enhance the business processes and it also brings the desired results.
It could be a short-term impact but in long term it is going to benefit.
Yes, absolutely!
Thank you, Bijoy. That was a really insightful session.
To know more about GS1 India’s traceability service, visit this link.
According to the Global Brand Counterfeiting Report 2018, the amount of total counterfeiting in the global market had reached 1.2 Trillion USD in the year 2017 and was projected to reach 1.82 Trillion USD by 2020. You will be alarmed to know that even a country’s most crucial Defence products and equipment are counterfeited, let alone luxury goods and other high value items.
The same 2018 report also says that the online counterfeiting led to 323 Billion USD loss in the year 2017. If you are alarmed by the above-mentioned facts, then this article will throw some detailed light into and how can one curb counterfeiting.
What is Counterfeit?
Counterfeit is a burning issue in the world economic framework. But before we move forth, let’s understand what is counterfeit all about. Counterfeit products mean nothing but the presence of spurious products in the market. This is one of the biggest threats to the existing brand names.
People prefer picking up brands because brands provide higher quality of products and the value attached to the brand.
With upgraded technology, it has become easier to copy any brand with ease. The counterfeiting industry is expanding at such a pace that it is now a trillion-dollar threat to any business and or any brand.
Problems caused by counterfeiting
Loss of sales revenue and profit margin: With the influx of cheap and exact replica of the real products, people fall for the same. The cheap price and easy availability of the same being the reasons, the existing original brands or businesses start losing on sales revenue and thus face a deficit a profit margin.
Fraudulent product warranty claims: With fraudulent products comes fraudulent claims. The counterfeit products for obvious reasons are availed to the consumers at comparatively much cheaper rates because of the usage of compromised quality materials and poor-quality treatment. Thus, their longevity also gets compromised.
Product liability claims: With counterfeiting comes no product liability claim. So, in case you encounter defective or damaged products. Or not getting adequate warnings or instructions regarding the product, or even the warranty, you do not have the option to the complaint and seek for the product liability claims. The reason being is that you cannot trace the origin of the counterfeit product. Traceability is a big problem with counterfeits.
Damage of brand and product reputation: A common user cannot distinguish between original stuff and a counterfeited one. For him, a replica seems to be the original one. But when replicated products do not live up to the quality of the brand, the brand, and the product’s image get hampered. And most importantly, the customer’s faith in the brand gets shaken. Thus, the customer’s trust focus shifts from the existing brand to some other brand.
How does Traceability help?
With the intrusion of fake goods in the market, traceability can only help survive brands or even small-scale businesses. Traceability varies from product to product. Traceability is divided into two major segments; one is unit traceability and the other one is batch traceability. Unit traceability allows tracing of every single unit and batch traceability allows tracing of the entire batch. Every original brand, business, and the product uses a barcode on its product.
With Traceability system in place, brand owners can locate the entire batch of the product or any single product from the batch, from the supply chain and can take corrective measures if needed. GS1’s traceability provides a solution to such business problems. For more information, visit https://gs1india.org/content/traceability
India’s pharmaceutical industry today enjoys global eminence for producing the largest volume of generic drugs in the world, meeting over half of the global demand for vaccines and almost 25% demand of medicines for the United Kingdom. Indian drug companies are recognised globally for their operations across the world.
Despite this critical role that Indian pharmaceutical industry is playing in global healthcare, it becomes a target of various counterfeit allegations from across the world, from time and again. As per a study done in 2014 by one of India’s trade bodies, around 25 per cent of drugs in the India’s domestic supply chain are fake, counterfeit or substandard. According to a report released in April’19 by the office of the United States Trade Representative, 20% of pharma products in India are counterfeit.
As per a report published by the Institute of medicine (IOM), “To Err is Human”, 44,000 to 98,000 deaths occur annually due to medical errors, out of which 7000 deaths per year can be traced to medication errors. This report also recommended three important strategies to avoid medical errors —preventing, recognizing, and mitigating harm from error. The first strategy (recognizing and implementing actions to prevent error) has the greatest potential effect. This includes having systems in place that can detect the possible harms and mitigate them from reaching the patients. Traceability is also one such preventive system that prevents fake drugs from entering into the supply chain.
This report also recommended barcoding of medications as a solution for accurate drug identification.
What is traceability?
According to GS1 – a global organisation that develops standards for identification and barcoding, traceability (in healthcare) is defined as a process that “enables you to see the movement of prescription drugs or medical devices across the supply chain. You can trace backwards to identify the history of the transfers and locations of a product, from the point of manufacture onwards. And you can track forwards to see the intended route of the product towards the point of care.”
A strong track & trace system across supply chain trading partners can help address the menace of drug counterfeits. This requires adoption of global traceability standards by pharmaceutical companies, at different product packaging levels.
An available solution — DAVA (track & trace project of DGFT for medicines exported out of India)
To sustain confidence in the medicines produced in India, the Directorate General of Foreign Trade (DGFT) issued a notice outlining the creation of a track and trace system, way back in 2011. This system enables traceability of pharmaceutical consignments exported from India, to avoid spurious drugs entering into at any points in the supply chain.
The DGFT’s notice mandates exporting pharma companies to mark their export consignments with GS1 barcodes at various packaging levels. This information, along with product hierarchy (parent-child relationship) must be uploaded onto the Drug Authentication and Verification Application (DAVA) web portal, before the consignment is released for customs authorities to scan the barcodes on consignments and cross check the information. Over 380 large and medium-sized pharma companies today upload their daily production data to DAVA.
Regulators and patients alike can authenticate Indian pharmaceuticals and drugs anywhere in the world using DAVA by simply scanning the barcoded labels on packaging.
DAVA has also been recognised by the Asia-Pacific Council for Trade Facilitation and Electronic Business (AFACT), under the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), who awarded it the e-ASIA Award, as the best trade facilitation system in the region.
The Asia Pacific Council for Trade Facilitation and Electronic Business (AFACT), under the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), awarded the e-ASIA Award for best trade facilitation system in the region to DAVA, a GS1 standards-based traceability system for pharmaceutical.
DAVA (Drug Authentication and Verification Application), a national portal, tracks and traces the movement of pharmaceuticals exported from the country.
It was launched by India’s Directorate General of Foreign Trade (DGFT) last year to help prevent counterfeit drugs from entering the supply chain.
Once fully implemented, approximately 250 large and more than 8,000 small and medium businesses would use this system to upload daily production data of their export consignments.
The system also enables product authentication by barcode scanning through its mobile app, which can be used by consumers, regulators and custom officials worldwide.
