Article | REF: TR310 V1

Logistics traceability

Author: Nicholas SEIERSEN

Publication date: November 10, 2008

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AUTHOR

  • Nicholas SEIERSEN: KPMG Director, MBA, P. Log. and Executive Editor, LQ Magasine

 INTRODUCTION

With the growth in international trade and the ever-increasing demands for visibility, traceability is becoming an essential requirement in the supply chain that links the raw materials supplier to the ultimate consumer. This traceability ensures that the product complies with all legal and commercial requirements, both in terms of its components (purity, geographical and commercial origin, compliance with organic criteria, etc.) and its routing (absence of exposure to undesirable agents).

To ensure traceability, the goods must be provided with an identifier, a reader must be able to interpret this identifier, and the information thus created must be put into context by an information system. Automatic identification is the technology used to mark and read identifiers. The license plate on a car, or the bar code on a consumer product, are examples of identifiers commonly used in everyday life. RFID systems offer many advantages over other automatic identification systems. Reading does not require the object to be in direct view, nor at any particular proximity, several readings can be made quasi-simultaneously, the identifier can have a long life, even in traditionally difficult conditions, and the data can be rewritten.

These features enable logistics services that were previously physically or economically impossible. As a result, access, handling and reception become faster, as the products received or dispatched can be read, and thus identified, effortlessly and without slowing down. Interactive commerce becomes a reality when a consumer tries on a garment in front of the mirror and is presented with a list of sizes, styles and colors, as well as the accessories that would go nicely with them.

Traceability is of little use if it is not supported by an appropriate information system. This information system must reconcile the data generated by the disparate systems of dozens of intermediaries, in order to render a precise and accurate history of transactions: this requires systems connectivity, data communication, and the use of data transmission and representation standards. The manipulation of this data opens up opportunities for considerable progress in a decision-support environment. Conversely, in the hands of unscrupulous actors, such data can enable the trade in counterfeit goods, or open up access to goods that are polluted or fitted with harmful agents, of terrorist origin for example. Data security and confidentiality must be ensured, as must the inviolability of stored data.

Numerous examples illustrate the points made in this article, and four case studies round it off.

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