Traceability for Supply Chains
What is the concept of supply chain and traceability systems in the supply chain domain both along conceptual and case based manner?
The report focuses on understanding the concept of supply chain and traceability systems in the supply chain domain both along conceptual and case based manner. It would also aim in highlighting the traceability issues that vehemently affect the supply chain systems and thereby focus on generation of needful solutions both technology and non-technology based that contribute in addressing the issues. On a specific note, traceability issues concerning retail institutions like Tesco Plc and others would also be dealt with in the report reflecting on the problems caused by such both to the retail institution and its stakeholders and the process the same was dealt with by the company.
Overview of Supply Chains
The supply chains are developed based on the integration of different parties and stakeholders like the producers or manufacturing firms, supplier groups, retail and shopping outlets, distribution centres and warehouses, logistics and transportation firms and finally the end consumers of such products. The supply chains involved for different producing and retailing firms essentially focus on two aspects like sourcing of the raw materials and other semi-finished goods from the market and also in marketing and retailing the products for meeting the needs of the end consumers. Further, the supply chains are observed to be dynamic in nature such that it involves the continual flow of effective information, materials and also financial and other resources along the different stages involved in constituting the supply chain network (Eyob, 2012). The different stages involved in constituting an effective supply chain are reflected as follows.
Each of the different stages involved in a supply chain system like supplier of raw materials, manufacturers or producing firms, distributor of finished products, retailer of finished products and finally the consumers are essentially interlinked to each other. The different stakeholders constituting the supply chains also act as effective intermediaries that tend to govern or manage the flow of inventory along the supply chain (Lee, 2012).
Supermarkets Supply Chains
Supply Chain for retail supermarkets consist of different supply chain tiers that is essentially reflected in the following illustration.
(Bourlakis & Weightman, 2008)
The above illustration effectively reflects that the supply chain functions in retail supermarkets essentially consists of four different chains like Chain 1, Chain 2, Chain 3 and Chain 4. The first supply chain system essentially consists of a number of cooperative firms that essentially market the products to the retail institutions based on the incorporation of packaging and marketing firms. The packaging and marketing firms contribute in designing of attractive packages and advertisements that help in effectively marketing the merchandises to potential retailers. Again, the producers or farming bodies operating as cooperatives also focus on retailing the products through the use of wholesalers and other agents that help in reaching the products to the marketing and packaging stations through which the products are marketed to multiple retail outlets. This type of supply chains are more observed associated with the marketing of fresh food products like vegetables and meat products to the supermarket outlets (Vrijhoef, 2011). The second supply chain essentially reflect on such producing and manufacturing firms that focus on marketing the products through the use of wholesalers and other marketing agents for reaching the merchandises to the packaging and marketing institutions for finally selling them to consumers through the incorporation of multiple retail outlets. The third and fourth supply chain networks essentially reflect the case of integrated supply chains that operate as an effective network of sourcing firms, producing and manufacturing centres and effective distribution outlets. The integrated supply chain networks network has the potential of marketing and retailing the products to the consumers directly through the use of multiple retail outlets on the one hand while also focusing on the incorporation of marketing and packaging firms for reaching the products to the retail outlets (Mason & Evans, 2015).
Significance of Traceability in Supply Chain
Traceability function in supply chain earns needed significance in that it helps in tracking the movement of merchandise right from the point of use of raw material in the production process to the point where the finished good has been generated for sales. The traceability function in supply chain management contributes in gaining needed information along the different parts in the chain and also of the transformation of the semi-finished product into the final finished product. Traceability function thus contributes in generation of needed information pertaining to any risk that may tend to emerge during any part of the total supply chain process that enhance the dimension of risk related to the food or non-food products. The identification of the element of risk involved along the supply chain and production process associated with the generation of the commodity helps the producers or manufacturers to recall or withdraw from producing the needed product. Information generated from tracing the product along the supply chain and production process thus helps in ceasing the risk of the product from reaching the hands of the final consumer. The existence of traceability function in food supply chains thus helps in aptly reducing the chances and costs related to treating and eliminating of food related diseases (Golinska, 2014).
Moreover, the involvement of the traceability function in the supply chain also contributes in enhancing the quality and value of the product that thereby can be sold at higher prices in the market. It also enhances the level of customer satisfaction in that the customers can gain needed information about quality issues concerning the sourcing of raw materials to the production of the finished product. Involvement of the traceability function in supply chain contributes in generation of upstream information along the entire supply chain process right from the ends of the final consumer, retail stores, distribution companies, processing units and the finally to the producers and sourcing units for raw material resources. Traceability function earns needed significance in the supply chain activities owing to mainly two aspects like cost savings and enhancement of sales revenues and profitability dimensions. The cost savings are generated based on prior identification and recalling of faulty products and also through enhancing the performance parameters of the existing supply chain based on reducing the inventory cost, manpower costs, transaction and transportation costs, reducing returns of defected items, reduction of errors related to production and optimisation of the resources through effective control and coordination (Bertheau, 2012).
Traceability function helps in increasing of sales revenues and profitability based on enhancement of product value and quality that urges the consumers to pay more while procuring the same. Similarly, the traceability function also supports effective demand and supply forecasting based on the gaining of needed information, auto replenishment of inventories, and collaboration among supply chain partners and finally the generation of responsive sourcing and production functions. The above elements as a whole rightly help in increasing the productivity and performance of the supply chain systems (Blackburn, 2015).
The traceability function also earns needed significance in supply chain activities owing to the incorporation of effective technological resources and systems. The incorporation of modern technology systems like Radio Frequency Identification (RFID), Geographic Information System (GIS) and Global Positioning Systems (GPS) by different manufacturing and retailing firms rightly help in effective tracing of the movement of merchandises along different business units. The use of RFID technology enabled bar codes help the management of the retail institutions for scanning the same through the use of POS scanners for detecting the movement of stocks from supplier stations to distribution centres and finally to the retail outlets for being sold off to the final consumers. Use of RFID tags and bar codes contribute in saving and restoring potential data related to the different product categories that are marketed by the retail institution. The use of GIS and GPS technology domains further help in generation of real-time information associated with tracing resource centres for sourcing of quality inventories and also of the movement of stocks across different geographical and regional boundaries (Blackburn, 2015).
Traceability Issues in Supply Chain
The existing traceability systems in place are argued to be inadequate in meeting the demands concerning traceability of food and other products along their respective supply chains. The core focus now is to identify the risk areas concerning the respective supply chains and also for understanding the level of risk involved with the different product categories. Tracing the route of risky products and risk involved supply chains is taken to aptly help in reducing the element of risks concerning the supply chain activities for the identified products. The above process of identifying the risk involved with the different products and thereby in tracing the faults concerning the same is evaluated for helping the product companies in reducing product recalls (Schniederjans & LeGrand, 2012). The efficiency and effectiveness of the traceability systems concerning the supply chain can be further enhanced based on the development of programs like the supplier scorecard. The use of the Supplier Scorecard would contribute in evaluating the risk level of the different supply chain firms. Different risk levels would be made applicable for each of the different supplier such that supplier groups having the highest risk level would be subjected to periodic audits. Conducting of periodic audits would help in identifying the problems concerning the supply firms and thereby help in communicating the results to them for taking of needful action. Further, use of real-time supply chain tracing programs built on satellite and information technology systems is also held to enhance the level of communication activities with the supply chain firms. It also contributes in enhancing the level of transparency concerning identifying of problems faced by the individual supply chain firms and thereby communicating to them effective suggestions and advices for developing their internal potentials and performances (Management Association, 2014).
Traceability Issues in Supermarket Supply Chains
The traceability issues concerning supermarket supply chains can be effectively evaluated based on the case of the horsemeat scandal related to Tesco supermarkets. The emergence of the horsemeat scandal potentially affected the situation of food industry in Europe. Investigations carried out by FSAI on the meat burgers sold by Tesco reflected that the beef burgers were highly contaminated by the presence of horse meat by around 29 percent. Other investigations carried out pertaining to the frozen lasagnes sold by Findus reflected that it contained horsemeat of around 100 percent along with other food products sold by other supermarkets like Aldi. Supermarkets like Tesco and Findus are both observed to blame their supplier firms as being the primal causes for the supply of horsemeat stuffed burgers. The management of the supermarkets like Tesco and Aldi are required to continually review the supplier firms involved in the supply chains such that their conduct and performance can be effectively evaluated based on existing sourcing, quality and safety standards. The supplier groups responsible for generation of supplies of meat products to the retail firms like Tesco and Aldi are also required to cultivate needed awareness regarding the examination of the quality, standard and contents of food products before sourcing them to the retail stores (Rafiq, 2014).
The case of the horse meat scandal largely tarnished the image of the global supply chains concerning the supplying of food products to the retail stores. It also reflected potential weaknesses regarding the food supply chains that further contributed in growth of fraudulent activity along the borders. The traceability parameters concerning the food supply chains can be further emphasized through the active involvement of vigilance and survey authorities that would aid in the tracing of economically motivated fraudulent activities concerning food supply chains. Moreover, the involvement of competent inspection authorities like police and customs were also observed to be needful for tracing the existence of fraudulent activities concerning food products. The development and incorporation of effective testing methods is also found to be highly needful for continual monitoring of the quality and standards of food products (Griffin, 2014).
Process of Overcoming Traceability Problems
Tesco Plc operating as the leading grocery retailer in United Kingdom has increasingly focused on enhancing the level of transparency concerning the inspection activities conducted for sustaining the standard and quality of the food products. The management of Tesco Plc largely endeavours for generating needed clarity pertaining to the testing systems and programs concerning food products sold at their retail outlets. The details of the testing program along with the results are held to be generated in the company website for public access. The management of Sainsbury Plc, operating as a close competitor to Tesco Plc further confided that a large testing program has been initiated in the retail institution where raw materials and semi-finished products are subjected to tests before being involved in the production of finished products to be sold to the final consumers. The management of Sainsbury Plc also stated that an effective team of 50 people are generated by the company that tend to test the products on them before being send to the retail stores. Increased level of transparency generated by the retail firms like Tesco and Sainsbury along the supply chains is observed by the company management to contribute in enhancing the parameter of reliability of the customers on the food products marketed and distributed by them (Espiñeira & Santaclara, 2016).
Retail and Wholesale institutions like Tesco Plc and Metro Cash and Carry focus on the use of technological systems like RFID for enhancing the traceability function in the supply chain systems. Use of RFID systems potentially contribute in making the supply chain systems Information Technology centric in nature. The incorporation of different IT enabled infrastructures like ERP Systems help in integrating information acquired from POS scanners based on scanning of RFID bar codes contribute in making the supply chain systems more customer responsive and agile in nature. Enhancement of agility in the existing supply chain systems ideally contribute in meeting the objectives of customer satisfaction regarding gaining quality products at the right time (Mangan & Lalwani, 2016).
The use of RFID technology based on the use of RFID bar codes and tags by retailers like Tesco and Walmart potentially help in increasing the visibility of goods at distribution centres, warehouses and supplier stations. Item-level RFID tags and bar codes generated by Metro AG significantly contribute in sourcing merchandises of right pattern and quantity for meeting consumer needs at any specific period. Moreover, the use of RFID System also contributed in reducing the emergence of stock out situation in the retail outlets of Tesco and Walmart. Use of RFID Technology by the retail companies ideally help in conducting smart search of stocks and inventories. It also helps in reducing inventory management and labour cost associated with effective sourcing and management of inventories to generate needed efficiency and productivity (Nof et al., 2015).
The case of Asda, operating as the UK retail arm of the American retail giant, Walmart reflects the use of webcams for generating live feeds relating to the activities conducted at the different supply chain outlets of food and non-food products. Another case of traceability enhancement concerning the supply chain functions relates to the case of the Swiss apparel company, Switcher. The textile company focuses on labelling the textile products with a specific code that are used by the consumers for retrieving essential information regarding product quality standards. Similarly, another apparel company, Anvil is observed to incorporate a multimedia system like TrackMyT.com for tracing the movement of its products from the sourcing or raw material stage to the generation of finished products. Wine makers and marketers, Blankiet Estate is observed to have generated a code that can be entered by the customers in the website for retrieving needed information related to the authenticity of the raw materials and the product quality. Further, along with the use of RFID tags and bar codes development of ShopSavvy app for mobile phones encourages the customers for comparing and evaluating needed information relating to price and product standards before procuring the same (New, 2010).
The report aptly reflects on traceability problems concerning the modern day supply chains associated with retail institutions like Tesco, Walmart, Sainsbury, Metro and Asda to name a few. It analyses the concept of traceability and also the process of meeting traceability related objectives while also discussing on the potential problems faced by the retail conglomerates concerning the failure of generating quality and safe products that require them to face product recalls. The case of the horsemeat scandal, as a potential traceability issue is also dealt with in the report reflecting on the potential problems faced by retail companies like Tesco, Sainsbury and Asda concerning the same. Effective discussion is also presented regarding the use of different technological systems like RFID, GIS and GPS by the retail institutions for effective tracing of movement of merchandises along the supply chain system. Both broad and narrow or case based discussions are generated along the report for analysing the issue of traceability in the supply chain systems.
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