Retail
Maximising supply chain traceability
Madhava Venkatesh, co-founder and CTO of TrusTrace explains how companies can maximise the use of supply chain traceability systems.
M
adhava Venkatesh co-founded TrusTrace in 2016 offering a platform for supply chain
traceability at scale within fashion and retail, which has quickly become the foundation for some of the most ambitious sustainability programs in the world.
How can companies garner a full understanding of their products? Robust traceability systems help
companies evaluate their supply chains and prioritize changes that accelerate sustainable transformation. Understanding these products requires a robust and detailed traceability system that identifies: a) which goods and materials to trace b) what data they need from the supplier c) how frequently the data will need updating. With these key aspects, a complete picture of a company’s materials will come into play.
How can companies build a traceability plan? Tere are various technology platforms available for building a traceability system, but the most important ingredient to any of these systems is data. To build a traceability plan, companies must engage with both key internal staff such as sourcing, procurement, compliance and important suppliers. Ten, they must all work together to develop practices and processes for building and maintaining the traceability system. Supply chain traceability and transparency may be the goal, but
many rely on this method to support their sustainability initiatives as well. Working in tandem with a traceability platform, a sustainability data hub will make key ESG data usable across different functions. Companies may want to build a traceability plan that informs executive leadership, marketing, sales, and more.
What are the three key data elements that every enterprise should trace? To design the traceability system, companies must collect product data, direct and indirect supplier data, and product traceability data. Ten, they must classify this data. Product data is key. Without knowing the exact bill of materials or product material composition, a traceability system will not deliver
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value. Terefore, brands should focus on building their product data through suppliers. Tey also need data about direct and indirect suppliers that can
help measure those suppliers’ performance against sustainability parameters. Some data includes scope 2 and 3 records about emissions; data for mapping relationships among suppliers, facilities, materials, finished goods, and purchase orders; and third-party audit data about suppliers and their facilities. Enterprises also need product traceability data:
• Who – who are the parties involved • What – the primary products/materials moving through the supply chain
• Where – where the movements are taking place, such as a factory, production line, warehouse, point of sale, or beyond
• When – when the movements occur, such as which time zone • Why – why the movements are happening.
How can companies understand which of their products
contain ‘high risk materials’. One major step towards a sustainable reality is identifying products that contain high risk materials. Specific to each company, identifying material risks can vary depending on the raw materials used in your products and how you process them. For example, identifying conflict minerals and related risks may be important in electronics manufacturing – but identifying animal welfare, deforestation, or chemical usage might be critical for risks related to leather production. With every industry being different, it’s critical to understand the risks based on your suppliers’ region, primary materials, and the value processes involved.
How can companies classify their data (public information vs internal) and put it into action? With all of this data, it’s critical to classify it according to how it will be used. It could be classified as information that is: • Shareable with consumers, such as sustainable materials, certifications, and carbon footprint
• Information for the supply chain such as BOMs and product components
• Information for surveillance bodies such as quality reports and chain of custody data
• Information for recyclers such as material composition and chemicals used.
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