Today, almost every product in the market comes under the perishable category, as every product has a shelf life. But when we talk about perishable goods, we usually mean the items with shorter shelf life, such as food items, medicines and other consumables. These perishable goods require faster response time for recalling them in case if any damage or problem detected. Traceability can help minimize the distribution of harmful items to the consumers by ensuring faster response rate and quicker product recalls. Let us understand how.
Why is traceability important for perishable goods?
Traceability gives brand owners visibility of their products along the supply chain – from its origin till the point of sale.
At every point in the supply chain journey, there are multiple trading partners responsible for moving the product till it is sold to the consumers. Moreover, each finished product usually has several components like raw materials, ingredients, etc., which may have been provided by different suppliers.
Traceability helps trace each of these elements from across the upstream supply chain, amongst multiple trading partners, ensuring any issue is detected easily and as early as possible. Hence, traceability establishes a relation between upstream and downstream supply chain. Let us get an idea how traceability does the job of establishing this link.
Upstream and Downstream Traceability
Upstream Traceability is the journey of a product from farm to the manufacturer, while Downstream Traceability is the journey of a product from manufacturer to the consumer. Every product is made of various components. Every component has its shelf life. And this stands true for food items as well. Consumable such as food, beverages, etc., usually have a shorter life span. With traceability, not only can product batches be tracked in the downward supply chain but even its components that has gone into those batches can be easily traced in the upward supply chain.
Does traceability help in quick recall to ensure consumer safety?
Yes, traceability helps in quicker product recalls for all categories, but it is much more critical for perishable goods. Faster recall can also help in safeguarding a brand’s reputation in the market. It is also especially helpful in case of pharmaceutical drugs where delays can result in fatality.
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 needs and 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 the 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, agriculture, personal care, healthcare,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 time, 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 for the downward supply chain because once they produce the product 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 a 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 the downstream supply chain, but it is also essential as far as the upstream supply chain process is concerned.
How do companies generally reach the need for 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-out in 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 the 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 component of those batches because components keep coming and assembling happens and finished products goes into that. If you look at it from that perspective, 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 a traceability system is a very subjective question. When you talk about traceability systems, for most people, the perception that comes to their mind is that traceability is an application. It is some sort of application where they log in and get a report for what is moving where. But that is just one element of the 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 system is 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 do 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 processes 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 the 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 need to be realigned according to achieving the end result of traceability.
Sounds like quite a problem at hand, especially 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 need 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 stock taking in the warehouse, etc.
You are saying that the information is in a human readable format and they have to put in a 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 the 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 information like 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 receives the 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 goes 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 a 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 of 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 are 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 the 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 a 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 are 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 the 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 a 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 a consumer 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 a 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 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 cases 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 database 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 needs to be interoperable. Largely there are a 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 it 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 a common interface for the consumers to validate information related to the product.
To address this problem in India, we have a 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, etc. This can be extended further to have more information, even traceability information, 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 platforms, as of now more than 15,000 companies are publishing product data onto smart consumers. We have close to around 10 million product data which is already being published to Smart Consumer mobile application.
We also see a lot of consumers downloading (Android & IOS) this on a voluntary basis and we also see a lot of scanning of products, which happens in Smart Consumer mobile applications. 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 number 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 direction.
Most importantly before jumping into any traceability application implementation, the brand owner has to go back and review their supply chain process entirely, make a judgement in 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 an impact as well as it enhances. Because if any brand is going for traceability implementation, it’s change management. Change management will definitely impact the business. Change management will definitely slow down business processes. But if it is a 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 the long term it is going to benefit.
Yes, absolutely!
Thank you, Bijoy. That was a really insightful session.
Product traceability is the ability to identify, track, and trace products as they move along the supply chain. The product information is linked to a traceability system with the help of barcodes which allows businesses to extract information on Who (with whom), What (is the product), Where (with which trading partner), When (at what time), and Why (why was it scanned). Authorised people can scan the barcodes to know all these details using a scanner.
This empowers businesses with quality control, systematic information sharing, more transparency, and continuous monitoring of products in the market. The role of traceability is overarching, it benefits not just the manufacturers but also the retailers, distributors, and the end consumers.
These are the Some Types of Benefits of Product Traceability for Consumers
Ensures Food Safety
Product traceability allows businesses to ensure the quality and safety of food products. By tracking the product journey, right from production to transportation, businesses can trace food contamination and recall the lot quickly.
Provides Nutritional Information
With product traceability, brand owners can share important product information such as direct human contact with food, product authenticity, hygiene checks, etc. with the consumers. Consumers can leverage this information to make an informed purchase decision and be safeguarded from adulterated or counterfeited products.
Supports Ethical and Sustainable Practices
Consumers can check if the products are produced in an environmentally safe and socially responsible environment by tracing the origin of food products. They can do their part in fostering a sustainable future by purchasing products that are not made using toxic raw materials or are detrimental to the society and environment.
Builds Trust & Confidence
Barcodes are a source of reliable information which can be scanned at any point and by anyone boosting the trust and confidence of the consumers.
Facilitates Recall Management
A robust recall process calls for transparency in the supply chain. When product information is readily available it will facilitate better and timely recall management practices for products. When product damage or contamination is identified at an early stage, cases of consumer dissatisfaction will be fewer.
Reasons why consumers demand product authenticity
Health protection
Safety
Performance
Values and ethical reasons
Health Protection
Consumers today have become extremely cautious about their health. They are very particular about the type of food products they buy and consume. Barcodes empower such consumers with more accurate information which can be trusted. It provides necessary information such as product ingredients, origin, composition, expiry date, manufacturing date, allergens, nutritional information, and more. This information prevents consumers from consuming products that may affect their health.
Safety
By scanning barcodes on products consumers can know the source of origin, and manufacturing unit, and can verify its originality. This can prevent consumers from purchasing counterfeited products and ensure their safety. Barcodes serve as a guarantee of genuine and safe products to consumers.
Performance
Some products are sold because of the best-in-class performance they provide. Verifying product authenticity of such products prevents consumers from buying from inauthentic sources. In a market where suppliers are numerous and can provide multiple copies of an original product, it becomes even more crucial to ensure the product is authentic.
Values and ethical reasons
Consumers want to support businesses that work with integrity and are aligned with a greater good such as sustainability. Consumers therefore identify the authenticity of the products and do not buy any counterfeited products.
Authenticity beyond the product
Products are the mouth of the brand. They speak on behalf of the companies and when counterfeited products of such brands exist in the market it deteriorates the brand image. Consumers develop a negative impression of the brand in their mind which in turn impacts the revenue and profit of the brand.
Therefore, authenticity plays a dual role; it empowers consumers and at the same time differentiates businesses from other counterfeited products available in the market. This results in building healthy long-term business and consumer relationships, supreme customer satisfaction, and goodwill for the brand.
What are some ways that businesses use to authenticate their products?
Verified by GS1 –Verified by GS1 is a global platform that can be used to scan or verify product authenticity. Consumers or businesses can enter details of the GTIN, Global Location Number (GLN), and other GS1 ID keys, in the platform to know whether that product is verified by GS1 or not.
Smart Consumer App – Smart Consumer App allows consumers to validate the information source easily. Consumers can scan barcodes and verify details such as manufacturer, origin, and nutritional information. Brands can leverage the platform to directly promote their products to consumers.
Authorised Barcodes – When registering for barcodes companies should always register with authorised institutions only. In India, it is GS1 India which provides barcodes that comply with global best practices and standards. Barcodes issued by GS1 are accepted worldwide as well.
Why do businesses need to protect their products from counterfeits?
Counterfeited products are a grave danger to industries, the economy, innovation, trade, health, safety, and the environment. It also impacts the reputation of a brand and decreases the satisfaction levels among consumers. Every year, the Indian economy incurs losses in crores because of the prevalence and existence of counterfeited products in the market. Lack of consumer awareness further makes the situation critical making it extremely important to adopt a standard-based service to detect and deter the adoption of such products. Product authentication can therefore prove to be a masterstroke in our industry.
Frequently Asked Questions
1. How does product traceability differ from product tracking?
Product traceability is the process of tracing the complete journey of the product starting from the production to the consumer. Tracking refers to keeping a record of the entire product details.
2. Is product traceability mandatory for all industries?
Product traceability is not mandatory in all industries; however, it is advised to have a traceability system in place for all products to streamline operations.
3. Are there specific regulations governing product traceability?
Yes, the GS1 Global Traceability Compliance Criteria Standard provides regulations to build compliance with traceability. It is the basis for ensuring key compliance and traceability protocols to implement a traceability system in the industry.
4. What information is typically included in a product traceability system?
A product traceability system provides data such as quality control results, handling and storage conditions, final routes, distribution channels, and raw materials. This information is crucial in tracking and tracing the product journey.
5. How do companies implement product traceability in their supply chains?
Companies can implement product traceability in supply chains with the help of traceability systems such as Datakart Trace. They can keep complete track of product inventories to ensure they do not send lots earlier than they have been consumed in the markets.
6. How does product traceability benefit retailers?
Retailers benefit from accurate and complete information on product SKUs. This reduces their dependency on third-party sources since they get information directly from a centralised product repository that is being updated almost on a real-time basis.
7. What role does product traceability play in food safety?
Food traceability is the cornerstone of providing consumers with safe and healthy food choices. Food contamination can be identified early which can speed the recall process with traceability. When all safety and regulatory standards are met, consumers will be safeguarded from consuming a contaminated product.
8. Can product traceability help reduce waste in the supply chain?
Yes, by having a comprehensive record of the products in the market, businesses can avoid overstocking and stockouts. This in turn will benefit the environment as less waste will be recorded.
9. Does product traceability only apply to perishable goods?
No, product traceability can be applied to all types of goods, whether they are perishable or non-perishable. Businesses aim to reduce waste, track product journeys, ensure quality, etc. which can all be achieved through a traceability system.
EPC codes, unique digital IDs for products, revolutionize tracking with RFID technology. They improve supply chain efficiency by enabling real-time visibility and inventory management, benefiting various industries.
What is the EPC Code?
The EPC code, or Electronic Product Code, acts like a unique digital fingerprint for a physical product. Imagine it as a serial number on steroids! This globally unique identifier, developed by EPCglobal, leverages RFID technology to allow for wireless tracking. Unlike barcodes that require a direct line of sight, EPC codes can be read from a distance. This translates to major improvements in supply chain efficiency. Businesses can track product movement in real time, gain instant inventory insights, and even combat counterfeiting – all thanks to the power of EPC codes.
Radio Frequency Identification (RFID): What is it?
Radio Frequency Identification (RFID) is a technology that uses radio waves to wirelessly track and identify objects. Imagine tiny tags attached to products. These tags contain an antenna and a microchip. The antenna catches radio waves from a reader device, which then transmits a signal to the microchip. The microchip, in turn, transmits its unique identification data back to the reader.
This allows for contactless, automatic identification, offering several advantages over traditional barcodes. Here are some key benefits of RFID:
Faster and more efficient reading
Can read multiple tags simultaneously
Works without line-of-sight
Can store more data than barcodes
Overall, RFID revolutionizes tracking and identification in various industries, from retail and supply chain to access control and asset management.
EPC Operation: RFID Tags and Readers
The way we track products is undergoing a transformation powered by GS1 RFID technology, which utilises EPC (Electronic Product Code) and RFID (Radio Frequency Identification).
Here’s a breakdown of this dynamic duo:
EPC (Electronic Product Code): Imagine a unique digital fingerprint for every product. This standardized code, developed by EPC global, allows for global identification of items. Think of it as a supercharged serial number!
EPC RFID Tags: Picture tiny stickers with a microchip and antenna. Attached to the product, these tags store the EPC code. These EPC RFID tags are the workhorses of the system, enabling wireless tracking through EPC in RFID technology.
RFID Reader: This device emits radio waves. When the tag’s antenna picks them up, it activates, and the microchip transmits the EPC code back to the reader. This wireless communication eliminates the need for line-of-sight scanning, unlike traditional barcodes.
This seamless interaction between EPC codes and RFID technology (GS1 RFID) unlocks several benefits:
Wireless Reading: No more struggling with line-of-sight limitations like barcodes. GS1 RFID works from a distance, streamlining the tracking process.
Real-time Tracking: Readers can scan multiple EPC RFID tags simultaneously, providing instant product location data. This empowers businesses with real-time inventory insights.
Enhanced Efficiency: With real-time data, businesses can optimize supply chain management, improve inventory control, and gain valuable insights into product movement.
GS1 RFID, powered by EPC and RFID, empowers businesses to seamlessly track products, leading to greater efficiency, transparency, and improved decision-making across various industries. While EPC barcodes may still be used in some applications, GS1 RFID offers a powerful alternative for situations where traditional barcodes fall short.
EPC Applications in Different Sectors
EPC barcode, paired with RFID technology, are revolutionizing how various sectors manage their products:
Retail: Imagine checkout lines that scan your entire shopping bag at once! RFID with EPC enables faster purchases, improved inventory accuracy, and real-time loss prevention in stores.
Pharmaceutical Industry: Ensuring medication authenticity is crucial. EPC tracks drugs throughout the supply chain, preventing counterfeits and ensuring patient safety.
Logistics & Transport: Real-time tracking of shipments with EPC streamlines deliveries, minimizes delays, and optimizes routes, leading to cost savings and improved customer service.
Agriculture & Food: Track farm-to-table freshness! EPC monitors food products throughout the supply chain, ensuring proper storage conditions and enhancing food safety.
Manufacturing: Streamline production! EPC tracks components and finished goods in real-time, optimizing production lines and preventing inventory shortages.
Healthcare Sector: Improve patient care! EPC tracks medical equipment and supplies, ensuring their availability and optimizing sterilization processes.
These are just a few examples – the applications of EPC technology continue to expand across various sectors, driving greater efficiency, transparency, and safety.
Frequently Asked Questions
1. Can EPC/RFID tags be part of a fabric label sewn into an apparel item?
Absolutely! Special fabric labels can be embedded with EPC/RFID tags, offering a discreet and durable solution for tracking apparel. These labels withstand washing and drying, ensuring the EPC RFID tag remains functional throughout the garment’s life.
2. Do EPC/RFID tags contain information about consumers?
No, EPC codes typically only hold product identification data (e.g., brand, size) and are not linked to specific consumers. Privacy regulations further safeguard consumer data when using GS1 RFID or EPC RFID technology.
3. How EPC is used in RFID?
EPC stands for Electronic Product Code. It’s the unique data (product code) stored on the RFID tag’s microchip. RFID technology allows the wireless reading of this EPC code by an RFID reader, enabling efficient tracking and identification of products using EPC in RFID.
4. What are the concerns relating to the use of RFID?
Some people have privacy concerns regarding potential tracking of individuals through RFID tags. However, EPC codes used in GS1 RFID and EPC RFID applications are usually not linked to specific consumers, and regulations control data collection and usage.
5. How does RFID impact consumers?
RFID can benefit consumers by improving product tracking with GS1 RFID or EPC RFID, potentially leading to faster checkouts, better product information access (e.g., through mobile apps), and improved product authenticity verification. However, some may be concerned about potential privacy issues.
6. Will RFID replace barcodes?
Not necessarily. While RFID offers advantages like wireless reading and storing more data, barcodes remain a cost-effective option for many applications. They might coexist and complement each other, with EPC/RFID being used for situations where barcodes fall short.
7. Is RFID new?
The core concept of RFID has been around for decades. However, advancements in miniaturization and chip technology have led to its wider adoption in recent years, making EPC/RFID a more viable solution for tracking and identification across various industries.
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.
With the rapid growth of e-commerce, detailed & accurate product attribute information becomes more crucial since consumers became highly dependent on what they see online to make purchase decisions.
Additional product information in terms of what is mentioned on the product label, such as food ingredients, consistency, its life, calories, recipes and much more, becomes inaccessible in case it is not provided in product description.
That’s why national repository of product information plays a critical role in storing and sharing consistency, complete, accurate and trusted information on products from across categories. This information gains further trust as it is provided directly by manufacturers/brand owners.
India’s national repository of product information is DataKart, which is also linked to Smart Consumer mobile app that empowers billions of consumers with digitally access of product information.
The Smart Consumer mobile application (free for Android and iOS) is developed by GS1 India, a global supply chain standards organization. It lets consumers scan the product barcode using their mobile phones, to access complete product information before making purchase decisions. Besides product information, the app also provides information about the consumer care details of the company, and an option to file complaints or share product feedback directly with brand owners.
Smart Consumer app also enables consumers to validate product licenses, including FSSAI, AGMARK, BIS, etc.
Please note that only product barcode numbers starting with 890 could be scanned using the app since these are unique product IDs, provided by global supply chain standards organization – GS1 India.
Additionally, regulatory compliance authority on food – FSSAI & AGMARK, recently directed food companies to upload their product information along with their license numbers and expiry dates, on the Smart Consumer mobile app.
To know about how this app works, click on this link
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.
With newer products being launched every year, consumers has a wider range of products to choose from. This wide accessibility is also attributed to various new players in e-tailing offering services in remotest corners of the country.
But despite all this, the retail scene looks grim. Consumer confidence in products is diminishing than ever before and with more awareness, consumers have started asking for product authentication as proof to rely on product claims.
Barcodes play an integral role in establishing product identity and verifying product claims. These black and white bars on the product label, which up till now considered just a convenience at point of sale counters, have starting gaining more and more importance from consumers’ perspective.
Besides being used in several B2B operations, today barcodes are being considered by consumers as a gateway to truth. This is possible with the advent of various mobile scanning applications that enable consumers get more information on products and sometimes, verify the claims made on the product label.
The premise of most of these applications is to provide complete product information to enable shoppers make the right purchase decisionssince the insufficient / illegible information on product label, at times, cause hindrance.
On such trusted mobile application is Smart Consumer app, which was launched in December 2016, with an objective of empowering consumers with reliable product information. This is particularly important since most of the scanning applications bank on crowd-sourced product data, which, at time, is incorrect and mislead consumers. In the sharp contrast, data populated on the Smart Consumer app is sourced directly from brand owners of products.
A simple scan of the barcode, starting with ‘890’, using the Smart Consumer mobile app, enables consumers to access information, such as brand name, ingredients, product image, MRP, net content, dimensions, Regulatory information like FSSAI/ISI/BEE license number and its validity, etc.
Smart Consumer app can also be used to share feedback on products, directly with their manufacturers.
So, what are you waiting for? Download the Smart Consumer app from your Google Play or Apple Store, and start scanning barcodes starting with ‘890’.
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.
Selling is no longer confined to physical retail outlets. With proliferation of online shopping portals, consumers today look up, evaluate and purchase products through a mix of offline and online selling channels. This enables them make better informed purchase decisions on variety, price and location at just a click of a button.
While five years ago, fbb (Future Retail’s fashion brand), sold its popular own brand merchandise through its retail outlets only, it now sells them through its own shopping portal and that of several other leading shopping portals like Amazon, Flipkart, Myntra, Paytm, etc. This has very significantly enhanced market reach and accessibility to its wide range of apparel products.
To enable the above, fbb switched from using its proprietary barcode numbers to GS1 barcode numbers (EAN codes), which was a key requirement for listing products on multiple online shopping portals. This also allows fbb to provide a lot more consumer related information about its products than what was possible earlier through offline sales channels, since its SKU data gets populated into GS1 India’s DataKart, the online national repository of information on retailed products and their attributes, linked through the GS1 barcode number.
DataKart also enables it generate and allocate unique barcode numbers to thousands of its products, without ambiguity and with the assurance that its products would get recognised and accepted since GS1 standards are the de facto product identification standards in retail worldwide.
“Internally, we no longer have to maintain and manage two separate supply chains for offline & online and we now have real time visibility to inventories and stock movements, whether selling through our retail stores or catering to requirements of multiple shopping portals. This eliminates unnecessary effort and costs in managing our supply chain and logistics operations, while enhancing our ability to seamlessly meet requirements of today’s omni channels and ensure our product availability at all times to shoppers”, said Me. Alok Dharadhar, Chief – Retail & Head, Business Processes at fbb
Through GS1 India’s ‘Smart Consumer’ mobile app which has been downloaded by thousands of consumers across the country, fbb now has the ability to reach out directly to consumers and market its own brand products, a lot more effectively through a scan of the GS1 barcode on our products.
The switch to GS1 barcode numbers has also helped it streamline and maintain a single coding structure for our entire range of products, which greatly simplifies its product item master management, ordering and supplies receipt operations.
