Resource  12 August 2021

Traceability in process manufacturing; benefits and tactics

Limited supply chain visibility and increased competition are just two of the key manufacturing challenges that can be addressed through traceability. With 96% of process manufacturers planning to improve their visibility, can you afford to fall behind your competitors?

Traceability in process manufacturing

What is traceability in process manufacturing?

Traceability in manufacturing is the procedure of tracking (and documenting) all your raw materials, parts and finished goods throughout your manufacturing process. Effective traceability allows you to find historical information on a product such as suppliers, items, inspection notes, manufacturing details, time spent at each workstation and distributors.

Traceability can apply to your entire supply chain, both upstream focusing on tracking the receipt and intake of raw materials to manufacturing processes and downstream as finished goods are distributed through the channel to their final destinations. For food and beverage manufacturers, this is often described as from ‘farm to fork’.

Why is traceability important?

For process manufacturers, traceability is essential for regulatory compliance to ensure product quality and safety. However, it also helps you meet customer demands for more information and is key to building trust. End-to-end traceability can help you maintain a competitive advantage and ultimately enhance your brand value.  

It’s important process manufacturers practice both external and internal traceability to be able to quickly isolate any suspect batches or products. Failure to successfully manage traceability can result in significant costs both direct (e.g., recall costs, legal costs, and the cost of replacement products) and indirect (e.g., damage to your brand reputation, increased product liability insurance, and additional marketing costs to recover market share). If you remember the horsemeat scandal in 2013, this incident wiped £300 million off Tesco’s market share!

63% of process manufacturers admit the lack of supply chain visibility and flexibility is a gap that will cause major issues in the future if not addressed appropriately.

IDC report

What strategies do process manufacturers use to manage traceability?

Good traceability is only possible if enough tracking information is available and manufacturers have systems to connect and integrate different processes. If your departments aren’t in sync with technology that talks to each other, traceability becomes extremely challenging and time-consuming.

Interestingly, only 40% of process manufacturers surveyed by the IDC have officially automated traceability, with 44% still using error-prone manual processes.

Despite the benefits of traceability in process manufacturing, 16% said they don’t have a strategy for managing traceability at all!

IDC Report

It’s not uncommon for SME manufacturers to say they don’t have the resources to achieve full traceability. Organising it all on paper or spreadsheets is hugely time-consuming, and that’s why some small businesses opt for the bare minimum, so they don’t over-stretch themselves with administrative tasks. There is also a misconception that implementing manufacturing ERP software is too expensive. In reality 78% of manufacturers recouped the cost of their ERP implementation within three years.

How can you leverage the full benefits of traceability?

IDC research shows 96% of process manufacturers plan to improve their visibility, with 57% concentrating on the end-to-end supply chain. With this in mind, can you afford to fall behind your competitors?

Acting now and moving from a reactive, regulatory-driven approach to a proactive, value-add approach will allow you to reap the benefits that traceability can generate, including increasing customer satisfaction and boosting your competitive edge.

Implementing manufacturing ERP software allows you to take a huge leap towards better transparency. Advanced systems like Sage 200 allow for stock lot or serial number tracking, expiry or best before date tracking, barcoding, quality inspection management, and other inventory control methods, while also providing you with the capacity to plan out and schedule production in the most efficient way possible.

Investing in traceability and implementing suitable systems and processes can add significant value to your business. Not only does traceability help build trust with customers, but clearer visibility of your data allows you to effectively analyse critical business information and make smarter and faster decisions.

Do you want to improve your brand reputation through traceability?

Learn about the best traceability practices here…

IDC traceability report

End-to-End Traceability in Process Manufacturing: From Regulatory Compliance to Competitive Differentiation

Sponsored by Sage

Get the IDC report

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