What is supply chain traceability?

Many are trying to achieve supply chain traceability but aren’t sure where to start. And the answer is pretty straightforward. If you want to create a traceable supply chain, you need to start by managing your specification data.

Posted on 
September 11, 2020
Matthew Wright
Founder & CEO, Specright

What is Supply Chain Traceability?

The best part of my job is getting to talk to prospective customers. And I’ve noticed a trend. Many are trying to achieve supply chain traceability but aren’t sure where to start. They throw out phrases like “farm to fork” but don't have a roadmap for how to get there.And the answer is pretty straightforward. If you want to create a traceable supply chain, you need to start by managing your specification data.

The Definition of Supply Chain Traceability

Supply chain traceability is being able to understand and see how different components of your supply chain - for example, from raw materials to suppliers and customers - are interconnected. Here’s the three step approach we use at Specright to enable supply chain traceability for our customers.

How to Establish End-to-End Supply Chain Transparency

Start with your specification data

The granular nature of traceability means you have to start with the most granular form of data: specifications.

Specifications define how something is made or how it should operate. Raw materials, ingredients, packaging, COAs - even machines have specification data.

Today, this data is scattered across the global supply chain. Parts of the specification live in ERPs but most of the data lives in spreadsheets, shared drives, or sits with suppliers.That’s why the first step towards supply chain traceability is digitizing specifications across your supply chain in a single source of truth.

The rise of Specification Management software like Specright has made it easier than ever for companies to collect, standardize, and manage this data. This also makes it easy for companies to see the gaps in their data. With hundreds of templates for specifications ranging from raw materials to ingredients and even machines, it’s easy to see what data you have today and where the gaps are.

Map your supply chain data across the value chain

The goal of traceability is to see the impact of component parts on the broader supply chain. For example, if you can no longer source a specific ingredient, you need to quickly find out all of the formulas and finished goods that use that ingredient. This problem is commonly known as the “bullwhip” effect - and it’s mitigated through supply chain data mapping.

As you would expect, supply chain data mapping has various components. The first is linking specifications to one another, such as an ingredient to formula or raw material to package.

The second is mapping specifications to names of suppliers and facilities across the entire supply chain. By mapping suppliers, you can also establish secondary and tertiary supplier options in case of emergency.

In addition to mapping supplier data, it’s also important to automate supplier data like COAs, MSDS, and other key documents. By automating and connecting these supplier data streams at the specification level, you can create real-time traceability. These relationships create context and can better understand how risk impacts your supply chain.

The third step is mapping finished goods to customers or retail channels. This way when something happens, you can see not only the products impacted, but what channels or retailers need to be notified. These mappings become the connective tissue across your supply chain and creates an inherent traceability system. This allows you to easily locate a product’s origin in just a few clicks.

The Benefits of Supply Chain Traceability

Supply chain management is more difficult than ever. Increasing regulatory requirements, changing consumer demand, and the desire for sustainable practices are the status quo. With specification at your fingertips, you can make and keep these promises to your consumers.

Mitigate supply chain risk

If your consumers knew how you made and managed product data, what would they think? This question is why many companies are realizing that proper data management is the foundation of risk management.

By standardizing supply chain data in a way that’s easily traceable, companies can get ahead of problems, mitigate risk, and better control issues when they occur. This is especially true for the food industry, where food safety can make or break a brand. And with more than half of all product recalls due to mislabeling, the fear of recall is very real.

By better managing recipes, formulas and other critical data and documentation, you can rest assured that outdated or old specifications aren’t lurking in your food supply chain.

Ensure product quality

Many consumers are willing to pay more for higher quality items. But this means products have to live up to their expectations every time.

A very real challenge that brands face is “specification drift.”

This means that what you initially produce changes over time due to miscommunication, a lack of specificity or changing suppliers. And with the growing complexity of product components, there’s more to keep track of than ever.

Advanced supply chain data mapping means that the detailed information isn’t lost in translation and that your product meets customer expectations every time, over time. With Specright, many of our customers build their quality criteria into Specright to enforce quality from suppliers all the way down to the manufacturing floor.

Launch more profitable products

Supply chain traceability isn’t just about managing risk - when done right, you can use it to increase sales. Do you really know why your last big product launch was a success?

For many product development professionals, it’s difficult to tie aspects of a product to sales. With supply chain traceability, product development professionals can analyze product sales performance and isolate product components like ingredients or formulas to look for trends. Not only does this help professionals identify what products tend to drive more revenue, but it also accelerates speed to market.

At Specright, we’re hearing customers cut down their product NPD process by more than half by leveraging Specification Management. After all, your next successful product idea is probably hiding in plain sight - you just need the right tools to see the forest through the trees.

Want to learn more? Contact us and learn how Specright is changing the game for supply traceability.


Matthew Wright

Matthew Wright is the founder & CEO of Specright. Prior to founding Specright, he spent more than 25 years in the packaging industry, holding leadership positions at International Paper, Temple Inland, and rightPAQ — a packaging company he co-founded. He has also been involved in leading multiple M&A deals in the packaging industry. He sits on the Packaging Advisory Board at Cal-Poly San Luis Obispo.

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