Welcome to this blog on traceability. As you surely know SAP has selected Tracetracker’s technology as its solution for value chain traceability; Tracetracker’s solution is Powered by SAP Netweaver for the benefit of companies that use SAP as their ERP system.
The key component in Tracetracker’s solution is known as the Global Traceability Network, or GTNet for short. GTNet lives in the Internet and allows companies from any value chain to publish global traceability data while keeping internal traceability data for itself.
In this blog I aim at introducing traceability in general and the steps that are involved when implementing a traceability solution for a customer. There are many aspects to traceability, and it would have been nice to present them all at once. But this wouldn’t be a blog. So therefore I ask you to bear with me as topics are spread over time. Also, I will go outside the shrink-wrapped solution for SAP because I want to draw a complete picture, and because you may well come across customers that do not fit within a shrink-wrapped world.
Examples will mostly be taken from the food industry, but Tracetracker’s concepts and solutions are made to be generic so that any type of value chain can be covered.
I hope that this blog will be a suitable startingpoint for opening up the fascinating world of traceability. As you discover that you want deeper background and experience I suggest that you visit Tracetracker’s web-site. There you can find details on our partner courses and directions to our live traceability demo.
So, we start with an overview over traceability.
Traceability is a tool that makes it possible to retrieve information about a product so that one can “look” backwards in the production chain for the product’s ingredients and where the ingredients came from. Similarly, one can look forwards to identify other products with the same ingredients.
When talking about traceability we generally don’t use the terms backwards and forwards. Instead we use the terms upstreamand downstream, since a value chain can be compared with a river. Therefore the raw material “flows” downstream towards the mouth of the chain where the points of sale are located. Thus we look upstream to find information about ingredients that went into our own product, and we go downstream to find where the product was used.
A well known, although unfortunate, use of this is to recall products. A recall is something that typically takes place when there is something seriously wrong with a product. Then both the public and the product brand must be protected against the negative consequences of using the product.
It is important to understand that there is a big difference between saying “all the sugar we have delivered the last month may be contaminated” to saying “the sugar packed in 20 kilo bags produced Friday March 31. is contaminated“. In the first case the producer overestimated the extent of the problem to be safe, while in the latter case the producer has precise control over incoming raw materials, how these were used in production, and in which shipments the product was distributed. Having detailed control over production is key to having traceability.
But it may not be sufficient to withdraw sugar bags from shops. Some of the bags may have found their way into other businesses, and those businesses probably have customers and brands that deserve to be protected as well.
Bananas’ route from the jungle to consumers
The illustration shows how a number of products use bananas as an ingredient:
- Untied Bananas supplies bananas
- Bananacakery produces banana cakes
- Banana Butter makes breadspread from bananas
- ThePress makes freshly pressed juices
- Bananaliquere produces banana liquor
These companies are interconnected either because they use bananas directly as raw material, or because they use banana pulp from the mill in the graphic. In addition, “other ingredients” connect the companies to other corporations that may not have bananas on their agenda.
Situations that can occur
Traceability is often associated with unfortunate events, such as recalling bananas that have turned grey and have a foul taste. Assume then that this problem is discovered as the bananas are brought ashore from the ship at “warehouse 2”. If storage conditions aboard the ship have been within the allowed range, then the problem must lie with “warehouse 1” or further up the chain. With a traceability solution in place, warehouse 2 can alert warehouse 1 by tracing backwards. Let’s say that warehouse 1 finds that the bananas have been stored at too low temperatures. The people at warehouse 1 can then trace forwards (via the mill), and warn customers that banana pulp from a specific production should not be used.
As a counterweight to the negatively loaded example above, consider the case when BananaButter’s customers report about particularly tasty contents in specific packages. BananaButter can look backwards in their chain to find the cause. Maybe they find a plantation with especially good contitions for growing bananas!? They can then use this to perform chain optimization.
Or what about Untied Bananas starting to market their bananas as a fruit of fair trade and sustainable agriculture. With traceability in place, Bananaliquere can discover that the banana pulp they use comes from the same plantations. So they can start marketing their banana liquor as sustainable and fair. Claims about fair trade and sustainable agriculture must of course be verified by independent certification! The resulting certificates can be carried forward inside the traceability system.
Interaction between chains
In the illustration the chain’s relationship with other chains is gathered under the label “other ingredients”. Assume now that Bananaliquere discovers that a batch of liquor tastes salty – the supplier of sugar has mislabeled salt as sugar. With a traceability solution the supplier can find which other recipients must be alerted about the mislabeling, and maybe the Bananaliquere, Banana Butter, ThePress and others receive notices about recalling products that contain the mislabeled ingredient.
Goods must have unique identifiers for information to flow between chains. Otherwise one could experience situations similar to not having unique registration plates on cars – one might be blamed for others’ accidents. In the same way goods must have unique markings so that problems with for example hair dryers in another chain does not affect the market for banana cakes.
Traceability as family trees
The net result of traceability information associated with a product is similar to the family trees used in genealogy. But instead of recording the relationship between parents and children over generations, the GTNet records dependencies of each product on raw materials combined along a production chain.