Supply Chain Traceability [Key Drivers & Implementation Tips]

Consumers, as well as authorities, demand more transparency and supply chain traceability than ever before. It’s a trend that won’t go away, specifically affecting how you need to manage your warehouse. At the same time, today’s technology allows us to gather more supply chain data than ever before. By utilizing them right, data can improve traceability.

In this blog post, I will take a closer look at the drivers for supply chain traceability and how the right warehouse management system (WMS) can help you achieve it.

What drives traceability requirements in supply chains?

The first driver for supply chain traceability is the customer delivery experience. We’ve all been there, wanting to know precisely where our package is and being frustrated when it seemed to have fallen into a black hole somewhere along the way. According to a report by IBM, 71 % of consumers state that they are willing to pay a premium for brands that provide good delivery traceability from the warehouse right to their doorstep.

Another driver is the matter of traceability as a tool for product safety and to prevent fraud and counterfeiting. An increasing number of regulations put pressure on companies to add more origin and production information and make their products traceable through the entire supply chain.

What does traceability mean for warehouse management?

All supply chain traceability starts in the warehouse. Here, essential data on all entering and exiting items can be collected, organized, and visualized. Supposing you have the right tools to do it, of course. Before modern warehouse management, there were significant gaps in data regarding product movement. Today modern technology, such as bar code reading and RFID, can be used to know exactly what product is where, being picked by whom, being delivered when and how – at any given moment.

Four ways a WMS can help you improve supply chain traceability

As we all know by now, traceability is all about data. But all that data is no good without a “brain” that will analyze, optimize, and visualize them, thus making it possible for us to understand them. That brain is your warehouse management system. There are several ways in which a modern WMS can help live up to the increasing demands from customers and authorities towards supply chain traceability. Here are some of them:

• Connecting the nodes of the delivery chain

  By integrating the data from suppliers, transport companies, and the warehouse. This will make your supply chain visible and understandable. The WMS will help you collect data from the point an order arrives at the warehouse until it is delivered to the customer. It is the chain between transport delivery from supplier to storage and storage to the consumer.

• Enabling control on item level.

  By collecting data from verification/scanning of individual articles in warehouse processes, you will know where, when and what is happening in the warehouse.

• Calculating resources used on order level.

  This information can be used, e.g., to communicate environmental impact to customers and track efficiency. Also, it enables businesses to compare their different warehouse sites on productivity and efficiency.

• Making emergency product recalls easier

  By providing information on product origin and to whom it has been delivered. Remember Volkswagen´s Diesel Engine Recall in 2015? Customers and shareholders were stunned when Volkswagen was caught cheating on diesel emissions tests. The company recalled 11 million vehicles worldwide and was forced to set aside more than $18 billion to cover recall costs, legal claims, and other related expenses. Shares tumbled immediately and took two years to recover.