Traceability is becoming a part of everyday parlance and central to decision-making in industries from food and cosmetics, to fashion and manufacturing. Regulatory and buyer requirements are driving the need for more visibility across supply chains, including the EU Deforestation Regulation, the FDA’s Food Safety Modernization Act (FSMA) Rule 204, the just-released EU Directive on Corporate Sustainability Due Diligence, and the Uyghur Forced Labor Protection Act (UFLPA) (on June 11th, the US Department of Homeland Security added Seafood, Aluminum and Footwear entities to its UFLPA list). Consumer demand is also a big motivator for companies to better understand — and improve — their ingredient sources. Internet search results for “supply chain traceability” can be overwhelming with options and, more importantly, riddled with acronyms, jargon, buzzwords and misinformation about existing technologies.

Not all traceability systems are created equal. Technology providers often exaggerate their capabilities, misleading buyers into thinking these solutions ensure regulatory compliance and sustainability. The term “traceability” is misused to describe chain of custody, supply chain mapping, tracking, or data collection practices that fall short of true event-based traceability. Event-based traceability answers “What,” “Why,” “When,” and “Where” at each supply chain step, based on GS1 EPCIS data standards. (GS1 is the global standards organization behind the universal barcode.) Event-based traceability provides the data required by the FDA’s FSMA Rule 204, EU Directive on Corporate Sustainability Due Diligence, EU Deforestation Rule (EUDR), and some seafood buyers.

Event-based traceability provides the data that the Global Dialogue on Seafood Traceability (GDST) and the FDA’s FSMA Rule 204 require.

A key difference between true event-based and other types of traceability lies in the system’s use of data standards and resulting interoperability. (For further reading: this research paper from the Institute of Food Technologists, which includes Wholechain, details the important factors to look for in a traceability system, such as data standards.)

Why are data standards important in determining the utility of a traceability system?

Without standards, issues arise, as we have seen historically with pen-and-paper traceability. This form of traceability presents a variety of challenges (even beyond the mere risk of relying on paper documentation, which rips, smudges, dissolves, burns, and is easily alterable). Pen-and-paper data collection results in inconsistent formats as information moves along the supply chain. Take for example how we write dates: DD:MM:YY; DD:MM:YYYY; DD:May:YY: MM:DD:YY, and all possible variations as data changes hands, geographies, and time zones.Electronic, proprietary systems that don’t follow industry or global data standards only slightly improve on pen-and-paper traceability by offering secure cloud storage. Their lack of standardization leads to fragmentation and functional silos across industries through the proliferation of proprietary data formats and traceability protocols. This is an especially important consideration as retailers increasingly require traceability of their suppliers. For instance, if a supplier uses a traceability system not based on standards for Retailer A, they cannot easily replicate or share data for Retailers B and C, despite selling the same product. As a result, suppliers pay for redundant technologies and undertake repetitive data entry in different formats, increasing costs and the risk of human error, data loss and manipulation. Ultimately, these systems create more barriers to adoption.

Transparency . . . entails a clear view of the supply chain through the use of detailed and accurate data that is easily accessible and exchanged between stakeholders and systems.

Amid the rise in demand for traceability is an absence of a common language for data collection and an accurate representation of what it means for a product to be traceable. The irony of proprietary systems and systems that claim to perform traceability, is that they undermine the goal of transparency, which entails a clear view of the supply chain through the use of detailed and accurate data that is easily accessible and exchanged between stakeholders and systems. As Wholechain’s mission is to enable transparency in global supply chains, we aim to advocate for standards and educate buyers about the implications of hiring solutions not based on industry standards.

Questions to ask when considering a traceability technology:

1. How does the technology vendor define traceability?

• Summary: Geospatial monitoring, chain of custody, supply chain mapping, and tracking ≄ traceability

• Details: Many systems that claim to do traceability do what is actually geospatial monitoring, chain of custody, supply chain mapping, or tracking. These technologies provide insights into practices and monitoring impact at specific locations across a supply chain, including the fact that a product is or is not there. These various supply chain accountability methodologies and associated technologies do not provide insights to the events or actions that are taking place at those locations. The lack of insights into events enables “gaming the system” through practices like laundering non-compliant raw materials through verified locations, product adulteration and tampering. Event-based traceability instead establishes a permanent record of the non-compliant product on a lot-by-lot basis for future intervention by providing verifiable data to compare to the physical product or report of non-conforming goods.

2. What ingredient supply chains does it already trace?

• Summary: Look for technologies with a track record of tracing challenging supply chains

• Details: Traceability, while a wildly popular concept, is challenging to pull off in reality. Consider soy. Hundreds of Brazilian farmers supply soy to dozens of soy processors, who aggregate and sell soy to another dozen of secondary processors for soy ingredients, whose buyers include aquaculture feed companies, food brands, cosmetics manufacturers, and manufacturers for other industries. Tracing soy back to the farm involves a human element (liaising with intermediaries and farmers, developing incentives for data collection, understanding specific needs and supply chain challenges) and technological acuity (systems designed for ease of use, accounting for the nuances of complex commodities such as soy while also being flexibly adaptive to complexities in other commodities). In short, find a solution with proven experience tracing challenging supply chains that is designed to adapt to meet your company’s specific supply chain needs.

3. What company challenges does the technology address?

• Summary: Stay focused on aligning the technology’s capabilities with your company’s direct priorities

• Details: Different solutions will have their areas of expertise. Evaluate your supply chain priorities: What gaps do you need to fill? Who are your stakeholders? How many products do you need to trace, and at what volume? Find a solution that matches your priorities before allowing yourself to daydream about all the bonuses that technology can offer. In other words, beware of the shiny promises that may distract from the problem at hand: if a system can offer AI data analysis but cannot perform basic integrations with your existing systems, or is just too hard to use, it risks draining your time and resources without addressing your real needs. If the system can meet your traceability needs AND offer something that will also drive sales, even better.

4. Can it integrate with existing systems that your company and stakeholders already use?

• Summary: Choose a traceability system that integrates and simplifies the use of your existing supply chain data, ensuring it’s accessible and understandable for decision-makers.

• Details: Building on the previous question, this is another key point to consider. Traceability involves taking a serious look at the data your company already collects — and needs to begin collecting — about your supply chain. Choosing a technology that can simplify your life and that of your stakeholders by automatically importing data that you already collect is high-value. Consider your Enterprise Resource Planning (ERP) system(s), on-farm or on-vessel technologies, Warehouse Management Systems, satellite monitoring, temperature sensors, IoT…the list goes on. Find a traceability system that can leverage the data you already have at your fingertips, and make it more accessible and legible to the decision-makers that ultimately need to see it. (Ahem: this is closely related to the case for data standards, which, as stated before, enable system interoperability.)

We’re strong advocates of initiatives that promote interoperability and standardization. Initiatives like these are instrumental in establishing common frameworks and protocols, reducing the complexity and cost associated with implementing traceability solutions. The GDST, GS1 EPCIS working groups for interoperability, National Fisheries Institute working groups, and other industry groups invite collaboration and innovation between key stakeholders and technology providers to more effectively address priorities that interest suppliers, buyers and consumers. We encourage companies to engage with these groups and their technology partners to communicate key challenges and opportunities, learn from each other, and help to drive innovation in their sectors.