Potential Next Generation Practices and Future Trends
- Applying serialization to prevent tampering.
- Incorporating technology into products and processes (e.g., rail cars of the future) to create barriers for thieves, counterfeiters and others.
- Managing traceability in high risk countries.
- Driving traceability systems and thinking into regulations.
- Expanding collaboration practices through partnerships.
- Applying traceability to individual ingredients.
- Creating business opportunities and synergies through enhanced security, safety, quality, environmental sustainability and other initiatives through more integrated systems.
- Integrating traceability with customer communications.
- Leveraging the large amounts of already existing data through the improved use of analytics.
These and other individual best practices both reflect and will be further shaped by future trends in technology, the marketplace and government policy. Some of the major emerging trends include:
- The evolution of technologies and practices will create new platforms for transforming traceability objectives from the management of business risk into opportunities for assuring customers and other value chain participants that the value of their products and brands is protected. For example, companies that want their products’ histories to be known can use tags embedded in packaging to “announce” a product’s geographic origins, life cycle results or other attributes (“organic”). Traceability thus improves risk management and enables competitive differentiation.
- There is a continuing evolution for how to answer “what’s enough reporting?” for traceability and related issues (e.g., product standards, certification). Information that is adequate for today’s needs will be insufficient in the future. At the same time, there is a recognition that not all of the information collected or requested by external stakeholders is useful or actionable.
- Companies must assess “what do customers want to know?” Companies continue to ask this question of their B2B and B2C customers as they seek to define a sustainability value proposition for their businesses. Mechanisms for sharing information among companies continue to develop, while observing legal requirements.
- Issues related to the confidentiality of traceability information are expanding. These include existing practices designed to protect against counterfeiting or theft; more recently, issues related to cyber security and software integrity are assuming greater importance.
- Practices for the protection of the confidentiality of traceability data are increasingly shaped by newer issues such as: the information boundary zone between publicly accessible cloud computing vs. private systems; and new partnership models (e.g., business/government/NGOs) and their responsibilities and protocols for protecting confidential business information.
- While technology is an enabler, innovation also requires integrating technological applications with robust business processes.
- The expanded use of traceability systems can also become a disruptive force in the product marketing, especially for consumer products companies. For years, marketers have inserted their own claims, labels and, in many cases, opinions on a product’s benefits. Traceability systems could displace these statements with information that is more factual and verifiable by third parties. The traditional demarcation between “brand names” and “private brands” could change as a consequence.
In summary, the era of traceability is upon us. Those companies that have developed an understanding of traceability systems and practices will apply them to further align their value chains around common standards and processes; reduce business costs for themselves and their business partners and customers by substituting more cost effective information for higher cost materials and logistics; advance their competitive position; educate their customers and stakeholders to enhance their brands; and apply traceability initiatives as another means to make their business strategies and operations more sustainable and differentiated in the marketplace.
Note: The perspective presented by Dr. Yosie is the result of deliberations of the IBM-World Environment Center “Innovations for Environmental Sustainability Council.” Announced in January 2012, other founding members include: Boeing, CH2M Hill, Coca-Cola, Dow Chemical, F. Hoffmann-La Roche, General Motors, Ingersoll Rand, Johnson & Johnson, and Walt Disney. Other topics being addressed by the Council this year include: sustainable buildings and infrastructure; innovation for water resource management; and sustainable logistics.