What are the supply chain traceability benefits for various departments?

There are numerous driving factors behind the fashion industry’s adoption of supply chain traceability solutions. Every business has its own needs, complexities and challenges that will determine the type of solutions it needs.

If you want to build your supply chain traceability strategy, I recommend you read this article: Traceability Strategy

The supply chain traceability benefits for a fashion company are linked to objectives regarding the individual departments. The information collected along and during the process is at the service of different departments within the company and based on the user of the platform, the defined objective, and the output that is sought.

We, therefore, analyze the benefits of adopting a Supply Chain Traceability Solution for the fashion brand departments of Procurement, Quality, Compliance and Sustainability

Supply chain traceability benefits per Procurement and Quality Department

Certainly, one of the reasons why companies choose to adopt traceability is to verify the authenticity of their products, thereby enabling the validation of their claims. Through the collection and management of data and information, every brand can not only prove and safeguard the authenticity and origin of materials but also ensure the quality of its products.

Association of physical and chemical tests with each type of product, material, or order. In this way, the brand is able to understand how many tests have been performed by suppliers and which materials are involved, acting directly by requesting possible additional tests.

Another significant motivation is ethical sourcing, as it allows for a detailed understanding of the manufacturing stages, enabling the validation of such claims. If my subcontractor does not track the materials, I have evidence that perhaps they are not purchasing the materials I asked them to buy. I can then understand, based on the type of order, who the suppliers are, where the goods are, where they started from, and how they were shipped. Even from an impact perspective, knowing whether the goods were shipped by sea or air changes the impact of this.

Risk Management: Identifying potential problems within the supply chain, mitigating the risk of non-conforming materials or materials from conflict zones. Implementing a traceability system helps companies identify operational inefficiencies and improve processes, facilitating the sharing of data and documentation among supply chain actors.

Product Lead Time: One of the most important KPIs for the Procurement team. It analyzes potential shipping delays from both the direct supplier and the tr2 – tr3 etc. Thus, I understand if there is a delay at the source and I can reschedule my production.

Supply chain traceability benefits for Compliance Law

Another significant aspect concerns regulatory compliance. Legislation is a driving factor in the industry’s push towards the implementation of traceability. The range of laws and regulations related to traceability is broad and continuously expanding.

The laws applicable to your business will depend on the regions where you produce and sell, the requirements of third-party retailers where you supply your products, and the scale of your operations. In this case, the determining factor for a Supply Chain Traceability solution will concern the accuracy of the data.

One solution could be an interactive map that shows all supply chain transitions that have been mapped and traced with varying levels of granularity and data verification. This can include both declared and verified information.

If there is a regulation that one day requires ceasing trade with a certain region of the world, I can instantly use the platform to see which of my suppliers are at risk and act directly with them. I have this level of visibility at the finished product level, on the Factory – material suppliers – related chain of custody, so all the documents that have been tracked and uploaded and entered before can be seen on the map

Here are the main regulations that have come into force in Europe in 2023:

Waste Shipment Regulation: Stricter rules on the transport of waste to ensure environmentally friendly disposal.

Corporate Sustainability Due Diligence Directive (CSDDD): Requires companies to proactively prevent negative environmental and social consequences of their activities. DISCOVER MORE HERE.

Corporate Sustainability Reporting Directive (CSRD): Improves transparency of corporate sustainability information, providing stakeholders with a clear view of the company’s impact. DISCOVER MORE HERE.

Green Claims Directive: Establishes strict criteria for environmental claims, combating greenwashing practices.

Ecodesign for Sustainable Products Regulation (ESPR): Introduces specific eco-design requirements and introduces a ‘digital passport’ to track a product’s sustainability throughout its life cycle DISCOVER MORE HERE.

EU Deforestation Regulation (EUDR): Addresses anti-deforestation measures, ensuring products comply with sustainable sourcing practices.

Supply chain traceability benefits for the Sustainability Department

Meeting Sustainability Commitments
Many companies have publicly taken on ESG commitments to reduce the environmental and human impact of their activities. To achieve these goals, a traceability solution is necessary. Some commitments include:

Reduction of Emissions: Companies that have comprehensive emission reduction plans aligned with scientific objectives need a traceability solution to know where the greatest impact occurs in their supply chain. Analyzing data collected through a traceability system is the only way to build an effective and targeted emission reduction strategy.

Switching to Sustainable Materials: Companies intending to increase the overall percentage of recycled, natural, or preferred materials in their product offerings need to know who supplies these materials. If a company wants to switch from conventional to organic cotton, it needs proof that the materials are actually recycled or certified organic. Companies that wish to support their suppliers through this transition to more sustainable materials must be able to identify and collaborate with them.

Circularity: Companies committed to implementing repair, recycling, or resale programs should collect data on products and materials re-entering their ecosystem. This includes data on the volume of recycled products, completed repairs, and resale data. Collecting this information will help companies understand the impact of circularity initiatives and narrow down their focus to the most effective scheme. By collecting data on repairs, for example, companies can make informed decisions about the design and production of more durable products.

Social Impact: Companies committed to respecting human rights should ensure they work with facilities that promote fair and safe working conditions. Analyzing data on practices and social impact is crucial for achieving this goal.

Supply chain traceability benefits for supply chain actors

There are many advantages for supply chain actors as well. Our philosophy is based on collaboration to prevent problematic situations.

One of the significant challenges for companies is understanding if there are subcontractors involved. Often there is a relationship with a supplier, but in reality, the process occurs elsewhere, at least in part. It’s essential that subcontractors also collaborate with us, sending samples to allow an understanding of every product within the supply chain. Any unforeseen issues in timing or testing can be an alarm bell for those who have commissioned the work.

It is important to have a relationship with producers to gain a better understanding of who is involved in the chain and how to achieve a higher level of traceability, as it requires a partnership with all steps in the supply chain.

As more and more companies adopt traceability technologies and delve deeper into the analysis of their supply chains, it becomes possible to highlight producers who might not comply with ethical standards, especially when it comes to subcontractors.

Constant monitoring of suppliers, in fact, allows for identifying the most critical stages of the supply chain from an environmental and social standpoint, enabling solutions to mitigate such impacts.

Supply chain traceability benefits: Business Objectives

The advantages for individual departments of a fashion brand have repercussions at the business and economic level.

Goals might concern the elimination of operational inefficiencies, attracting ethical consumers, or increasing shared value through sustainable practices, looking beyond current needs.

The benefits can concern the brand and its reputation; through traceability systems, the commitment to environmental and social responsibility objectives is demonstrated. Data collection and a greater understanding of the supply chain can represent the first step in achieving broader sustainability goals, increasing competitive advantage and providing added value for customers.

Finally, a traceability solution gives you access to data that can not only improve your understanding of the environmental and social impact of your activity but also allows you to eliminate inefficiencies, unwanted costs, and waste. It opens the way to a more dynamic, efficient, and strategic business.

Supply chain traceability benefits: Conclusions

There are many supply chain traceability benefits for each department. Traceability in the fashion production chain represents a fundamental element to ensure responsible production practices. It is configured as a precise tool at the service of a sustainable procurement strategy.

The ultimate goal is to build a sustainable value chain. Do you want to know our case studies? Click here

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