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If you are working in the supply chain sector, terminology like counterfeiting, contamination, labour exploitation, and deforestation will hit close to home. These trends in the marketplace are shifting focus for many organizations who rely heavily on supply chain integrity and efficiency to drive their business. But the inefficiencies in supply chains are hitting much more than the net profit line, they are having a massive impact on global health, safety and sustainability, and in turn, consumer perceptions, demands and behaviours.
The amount of food wasted in the global food supply chain is estimated at one-third, or $270 billion, while millions of people, including approximately 3 million children, die every year from malnourishment. Farms, manufacturers and consumer-facing businesses contribute 58 percent% of all food waste, according to Refed, which also represents 8 percent% of all greenhouse gas emissions and contributes to global undernourishment, according to the UN’s Food and Agriculture Organization and the World Resources Institute.
The World Health Organization estimates the counterfeit pharmaceutical market to be worth around $200 billion worldwide, annually, making it the most lucrative trade of illegally copied goods. A large percentage of those fake drugs appear in under-developed countries where healthcare is limited and critical already.
The societal pressure on industry to be more health and environmentally conscious has hit its critical mass point also. Industries have taken notice and are already starting to adjust their supply strategies by including very aggressive sustainability goals within their corporate objectives, despite whether or not regulations exist. And even though environmental lobbyists will continue to apply public pressure on the private sector, multi-national corporate executives are acknowledging the positive impact to the triple bottom line and building social responsibility into their core strategies.
Enter The Age of Traceability and Digital.
As the world moves faster with 5G and becomes more connected through emerging technologies like IoT, cloud computing, and augmented reality, the interest in combining technology with products to help fight the supply chain challenges of today continues to rapidly grow. By linking various information captured through traceability technologies to individual products, traceability becomes a very powerful tool that can enable full transparency in a product life cycle resolving much of the issues identified in the beginning of this article. And with technologies like serialization, biometry, chatbots, and geohashing, the level of granular visibility in the supply chain, from the farmer in Indonesia to the consumer in California, paves the way for high performing, consumer engaged, circular economies with high-value use cases in AI/ BI.
The challenge is that ‘Traceability as a Strategy’ has not spread through the various industries yet. Agri-Food is predominantly using it for sustainability purposes and food safety. Pharmaceutical and biotech are using it for compliance but starting to see the value in the data. And if not by regulation, many supply chain organizations are being steered by the technology providers towards which use cases to apply the technology. While this provides value, it limits the broader adoption of traceability in industry and the economic and societal potential of traceability on a global scale.
As executives continue to get exposed to the value creation and risk management that ‘Traceability as a Strategy’ offers to the triple bottom line, company strategies will begin to have an element of traceability in them. This shall cause supply chain organizations to transform into eco-systems of information, protection, engagement, and transparency, having a huge impact on the sustainability of the world.
The opportunity for supply chains to help is here, and there is no time to waste.