The majority (83%) of supply chain professionals believe that product traceability and serialization is very or extremely important to their company’s competitiveness, according to a new Forrester Research report commissioned by Rockwell Automation.
The report, titled “Increase Brand Loyalty and Generate ROI with Improved Traceability,” is the result of a survey of 307 global supply chain professionals to uncover the primary drivers of supply chain traceability investments. Although regulatory compliance topped the list (58% have already invested in compliance-related tools, and 38% plan to), companies have several motivators for turning to traceability technologies, including building brand loyalty, supporting sustainability, and cutting costs.
Our latest industry report echoes this emphasis on traceability — surveyed food industry professionals rated traceability as the most valuable software solution.
Creating a better customer experience
Consumers are becoming increasingly interested in the product journey and are looking to brands to provide more data. And many companies recognize how traceability solutions can help fill in the knowledge gaps. For 60% of respondents, improving customer access to serialization or traceability data was a top priority toward digitally transforming the supply chain over the next 12 months, followed by improving overall product traceability (58%).
More than 60% of survey participants plan to use traceability data to ensure customers have a better experience with their products. Respondents also listed better use of marketing resources (55%), using traceability data to innovate and improve products (54%), and improving product market introduction (49%) among their product marketability initiatives for the next year. All of these initiatives ultimately support customer satisfaction.
Strengthening sustainability initiatives
Companies are also taking steps toward meeting expectations for sustainability and environmental, social, and governance (ESG) commitments.
More than half (57%) of respondents said their company has already made efforts to reduce waste in the supply chain, while 17% will be adopting such initiatives over the next 12 months. They’re also requiring digital reporting against ESG metrics from their suppliers — more than half (54%) currently require this and 20% plan to do so within the next 12 months.
Supply chain professionals expressed a number of concerns about implementing traceability and serialization solutions, including complex integration with existing equipment (43%), a lack of sufficient standardization (36%), and issues with data quality (35%). As with adopting any new technology, most of the hesitancy comes from making sure it will be worth the high cost.
But there may be a higher price to pay for not investing.
Nearly 90% of companies have experienced problems with gray market diversion, while 87% have faced challenges with counterfeiting. Roughly half of companies are losing between 11% and 60% of their annual sales income due to these challenges.
Traceability solutions help prevent these problems — among companies that have already invested in serialization methods, 45% said the investment directly boosted their sales income by more than 31%. For 76% of respondents, the ability to prevent counterfeiting through traceability was important or critical to their company’s success.
Other important outcomes included the ability to:
- Gain full visibility of products (79%)
- Recall the correct products quickly (78%)
- Boost brand loyalty with improved product management (77%)
- Meet regulatory requirements easily (77%)
- Provide ethical sourcing information (71%)
Despite the cost of adoption and the potential implementation challenges, many companies are already putting their trust in traceability and serialization solutions. Customer expectations will continue to evolve and more regulatory requirements are on the way — better data visibility will allow brands to stay one step ahead of the changes.
Download the full report for more insights into how supply chain professionals are seeing success with traceability and serialization investments.