As the eCommerce sector grows, supply chain directors are recognizing the importance of traceability in meeting both consumer demands for sustainability and regulatory requirements.
The Value of Traceability
Traceability’s financial benefits are significant, with a McKinsey survey indicating that nearly half of Gen Z and Millennials are willing to pay more for sustainable products. Moreover, a report from Avery Dennison highlights that addressing overproduction, which leads to $64.5 billion in waste annually, could cut down on packaging waste and carbon emissions by reducing unnecessary transportation.
Regulatory Compliance and Cost Savings
The rise of extended producer responsibility (EPR) legislation and the anticipated sustainability-related regulations in the food industry by 2030 underscore the importance of traceability. The European Union’s Digital Product Passports (DPP) initiative, which mandates digital data collection throughout a product’s lifecycle, is set to influence global trade practices.
Transparency and Optimization
To achieve transparency, products must be assigned unique identifiers. This allows for the tracking of product movement and contents, leading to optimized shipping routes and resource use, and ultimately, emissions reduction. Producers can monitor and reduce their Scope 3 emissions, which include transportation efficiency and emissions intensity.
Verifying Material Sources
Traceability is crucial for verifying the origins and contents of raw materials. It enables companies to confirm the use of recycled content or virgin feedstock in their products and to ensure compliance with certifications for fair trade and organic farming.
Interoperability and Circular Economy
The Electronic Product Code Information Services (EPCIS) Standard facilitates interoperability among trading partners by standardizing data-sharing processes. This allows stakeholders to access information on product origin and composition, which is vital for enabling a circular economy.
From Waste to Value
Digitized traceability data aids stakeholders in recycling or upcycling materials. It provides end consumers with clear instructions on packaging, such as through QR codes, enabling them to make more sustainable purchasing decisions.
The demand for transparency in supply chains is growing among consumers and regulators. With advancements in digital solutions like 2D barcodes and RFID, companies can now meet these expectations, ensuring product authenticity, proper sourcing, and responsible disposal. Traceability not only benefits businesses but also contributes to a more sustainable environment.
