Labels on the packaging sometimes do not correspond to reality. Products in the store can be unsafe, and almost any kind of goods, including even medicines, can be counterfeited. For manufacturers, these are big reputational risks, for buyers - risks to health and even life. Existing opaque and complex supply chains do not allow to track fraud, counterfeiting and non-compliance with storage conditions, but there are already technologies that can correct the situation.
How many people and companies are involved in the production of your clothes, appliances, food? Components, stages of production and processing, delivery are woven into complex and multi-component supply chains, available only to its participants, and even then, not completely.
It doesn't look acceptable to governments, consumers, NGOs, and other stakeholders. The idea that supply chains should be traceable and transparent has received a lot of interest from manufacturers and company executives.
Why Is Traceability Important in Supply Chain?
Lack of traceability of supply chains can seriously affect business processes up to a complete shutdown of the company. It is difficult for company executives to track the substitution of ingredients for cheaper or even more dangerous ones, which can be made by groups of workers for material gain. Food fraud
is a serious problem, one of the ways to deal with it is to erase the lack of connectivity of the internal work of the company.
Documentation problems, such as lost original documents, can cause an unexpected end to their journey to international cargo, followed by losses for suppliers. Some cargoes have an expiration date and may not wait for paperwork, so it is so important for food supply chain to be traceable.
Stops, failures, and other problems are easier to detect when all supply chain members interact directly with each other. But beyond internal work, transparency of supply chains is important for public opinion, media and NGOs and can protect and improve the reputation of the manufacturing company. Sometimes even the employees of the company cannot know that the production involved child labor, dangerous materials, prohibited means of production. Scandals involving unscrupulous production can destroy companies, as they have done with the Rana Plaza factory collapse
, slave labor in the Thai seafood industry
, and deforestation in Malaysia and Indonesia
To Consumer and Back
Traceability and visibility of supply chains can be more than just a corporate tool. Transparency is also becoming a tool
in the hands of consumers who can make more informed purchasing decisions
when they have information about production, components and delivery. Studies have also found that the consumer is willing to pay 2 to 10%
more if he is also provided with information. So, people can support the production of clothing and food companies that provide good conditions to their employees, use quality ingredients, and support domestic manufacturers.
Fear of openness
Many companies refuse to work in the "glass kingdom" and hinder the process of their work. They believe that too much open information can harm the company's operations. But even those companies that want to move to openness, cannot simultaneously transfer all information about supply chains in open databases. This is a complex and usually expensive process that does not always pay off quickly.
Supply chain traceability solutions
Companies need incremental solutions that will, at great cost, move internal production and delivery information into single registries that are constantly updated and accessible to governments and consumers.
Many have turned their attention to blockchain as a good base for such solutions. Large companies have already launched or are still testing their own blockchains, medium and small companies turn to specialists. Distributed networks are stable and worth trusting, which means that they will be able to cope well with the task of making supply chains transparent.
For example, FCE BLOCKCHAIN
provides an opportunity to open supply chains partially. employees of the company. Production secrets and special ingredients have always been a matter of interest for buyers, but also for competitors.
It is also important to make the transition to a transparent supply chain painless, which is also possible for FCE: companies do not need years of developing their own blockchain to transfer their internal work to it. All the tools
you need already exist, and you can learn more about them now.
Transparency Means Responsibility
Consumers should not be detectives investigating the path of every product they would like to buy. Global problems of child labor, the use of substandard ingredients, illicit additives and hazardous production must disappear with widespread openness and transparency of supply chains. Better internal regulation will allow better decisions to be made, saving time, effort and resources, which is ultimately good for the environment and human health.