Strategy, Legal & Operations
How traceability can support Canadian manufacturers
Fuelled by digital transformation and Industry 4.0, manufacturers around the world are overhauling their traceability processes and improving the way they do business with technology.
This includes many Canadian manufacturers that are offering value-added services in addition to their products. In process manufacturing – including players in food and drink, chemicals, metals, and pulp and paper – this change is particularly pronounced, where the digital mission is centered around collaborative innovation.
According to Sage research, this process manufacturing focus on technology is fueled by developments in international trade and the globalization of markets, with 49% of Canadian process manufacturers being affected by regulatory change (such as United States-Mexico-Canada Agreement (USMCA) and Brexit uncertainty).
Regulatory disruption increases supply chain complexity, creating problems for process manufacturers. Current trade volatility across the world may mean you need to think carefully about subjects such as
- Tariff exposure and other costs.
- Compliance – irrespective of any deals made (such as free trade agreements between Canada and the US) goods will need to be declared, with custom procedures applied and opportunities for tax/duty planning.
- Relationships with suppliers – if you rely on certain components, understanding whether you’ll continue to get them will be a priority as lead times may increase.
- The security of customer relationships and the effect on demand volume, contract terms, pricing and rebates.
You should examine your supply chain closely, taking care to understand where tariffs may potentially hit your business and asking suppliers about their own plans for regulatory disruption.
The research also says that instead of tightening your purses in these unpredictable times, process businesses in your industry are investing in new technology. Leaders already invest in strong, digitised global trade and supply chain solutions. Those who don’t could be caught short.
What can new traceability technology help with?
As you expand your operations internationally, your commercial pressures and expectations are likely to increase. This puts strain on the supply chain, and by using information to manage quality, inefficiency and the threat of recalls, traceability is vital, and in certain industries a global requirement.
You often need to follow international standards controlling quality and traceability, which impacts the sourcing of raw materials. In process manufacturing, tracing what goes into products in what can be long and complex supply chains is crucial, as any contamination can result in serious issues.
Tracing can show whether a product is what it claims to be, which is important in industries such as pharmaceutical manufacturing where counterfeit products can cause serious problems. As well as providing authenticity, tracing also provides accountability.
In sub-sectors like food and drink manufacturing, product traceability might not be just a legal requirement – it’s the ability for the customer to make the right product choice.
For consumers, the difference between vegan, vegetarian and nut/gluten/shellfish-free food is not only about taste, it can be a matter of life or death. Traceability gives manufacturers the security of a healthy brand, healthy customers and healthy profits.
Investment in new and advanced traceability technology provides you with:
- Real-time visibility into the status of all processes
- Automatic notifications that allow your business to be more informed, allowing you to react to events such as non-compliance or demand triggers
- The ability to report and share product and materials data with your suppliers and customers, allowing them to understand where materials came and where they went.
Through the visibility afforded by traceability, you can significantly improve your operation. Compliance issues can lead to unhappy customers, damaged reputations and significant fines. Investment in better traceability helps you avoid these problems, avoiding a product recall situation.
With the right information, you can promote efficiency and improve decision-making through advanced traceability. You can:
- Monitor for regulatory compliance – avoiding compliance issues that leads to unhappy customers, damaged reputations and significant fines
- Support product recalls
- Promote efficiency and improve decision-making
- Better manage materials
- Monitor a need for new materials
- Improve demand planning
- Better manage logistics
- Arrange better terms with suppliers.
Sage research reveals that more than 90% of process manufacturers reported risks in not having supply chain traceability, with serious concerns around incidents hitting the value of the brand and not meeting required regulations.
Although cost to human life and litigation as a risk came down lower than brand value and regulations, it was highest in sub-sectors such as pharmaceutical manufacturing, where contamination can directly lead to death and regulation is extremely tight to prevent this from
Three forms of emerging technology to focus on
With traceability being so important in compliance, keeping brand value, avoiding litigation, and preventing loss of life, you should be using emerging technology to support its use. It can be advanced through:
The Internet of Things
With the Internet of Things (IoT), devices can be connected anywhere, at any time. Using labelling technology such as radio-frequency identification (RFID) and quick response (QR) codes allows data to be collected that tracks a product’s full journey through the supply chain. Anything can be recorded, from the status during transport to the source of materials.
Big data analytics
Using big data analytics, you can see where a problem has occurred and stop it from continuing through the supply chain. With unplanned events and potential crises such as tainted products in the supply chain, you can respond quickly, having identified, tracked and traced everything.
You can take advantage of cloud solutions, with software managing aspects such as system infrastructure, operating system, database and applications. This allows you to spend less time and energy on repetitive admin-heavy tasks and more time on important operations.
Keep moving and face your challenges
With better traceability, you can monitor your need for new materials and arrange better terms with suppliers. In industries with perishable products, you can ensure fresh, quality goods for customers. These benefits will greatly improve your ability to keep costs low, while continuing to satisfy customers.
Traceability is essential for success in today’s manufacturing environment. With real-time visibility, you can ensure compliance, better manage the supply chain, and ensure quality goods are delivered to happy customers.
It’s important that you keep moving and face the challenges that result from regulatory upheaval. Our evidence makes it clear that businesses in your industry are investing in new technology.
Increased investment in traceability can certainly mitigate issues or even create a competitive advantage for you in the future. Look closely at your supply chain. Are you ready for the unexpected?
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