Traceability of products in supply chains: The ultimate guide
This comprehensive guide provides practical examples to illustrate the benefits of product traceability and the key technologies currently being utilised.
In recent years, supply chains worldwide have faced challenges such as unreliable distribution partners, counterfeit products and supply chain shocks from pandemics and other disruptions. Leading brands have responded by investing in product traceability systems, allowing them to track their products from production to the end customer.
The main reason for implementing a track and trace system in supply chains is to enhance transparency and process optimization. By having visibility into the entire supply chain, companies can ensure compliance with regulations, identify inefficiencies and improve overall operations. This transparency also helps build trust with consumers, as they can have confidence in the authenticity and quality of the products they are purchasing. The data collected through track and trace systems can be used to optimise processes within the supply chain, leading to cost savings and increased efficiency throughout the supply chain. Advancements in traceability technology, such as DataMatrix, copy-proof QR codes or RFID chips, have revolutionized the way companies monitor their products in the supply chain. Understanding these technologies is essential for companies looking to leverage the advantages of product traceability.
What does product traceability mean?
Product traceability refers to the ability to track and trace products in the supply chain from – and inside - production or manufacturing to the end customer. Technologies for product traceability have rapidly evolved in the past ten years with the emergence of regulations for tracking tobacco products (EU, 2014), pharmaceuticals (USA, 2013), and medical devices (EU, 2017). Today, many industries have begun to implement traceability technologies to reap benefits of product traceability systems, which go beyond regulatory compliance.
Modern traceability technologies offer several benefits for businesses. They enhance visibility for distribution partners and sales channels, track and identify sources of product diversions and parallel imports and provide tools for demand forecasting and inventory planning. Additionally, these technologies help track recalled items, returned products, and damaged or defective goods, while also supporting sustainability programs by enabling recycling efforts, tracking carbon footprints and promoting the circular economy.
Effective product traceability necessitates a blend of technologies and procedures. This encompasses generating unique codes or labels for products, known as ‘product serialisation’, along with employing hardware and procedures for printing and applying identifiers like barcodes or RFID tags. Additionally, devices such as cameras, fix mounted scanners, handheld devices and smartphone applications are required for scanning codes and tags throughout the supply chain. Tracking logistical units like containers and trucks, often utilising GPS and environmental sensors, is also crucial. Integration between Enterprise Resource Planning (ERP), Manufacturing Execution System (MES) systems and Ware House Management Systems (WMS), as well as a company's printing and storage systems and traceability platforms is vital to capture all relevant events in the supply chain. Lastly, a software system or platform for product traceability is essential. While some brands may be reluctant to implement a new database system, it is crucial to recognize the importance of a product traceability platform. This necessity arises from the limitations of existing ERP systems, which are generally not designed to manage products at the item level effectively. Thus, the implementation of a specialised software system or platform becomes essential to establish a centralised source of truth for all data sources within the supply chain.
Businesses should implement a combination of technologies and procedures to monitor and trace products as they move through the supply chain, ensuring compliance with regulations and reaping the benefits of improved visibility, inventory management and customer trust.
Key concepts and terms
Track & trace vs. Traceability The term ‘track and trace’ refers to the process of monitoring and following a product or item through the supply chain from its origin to its final destination. It involves the ability to track the movement of goods, often using technologies such as barcodes, RFID tags or GPS systems. The primary focus of track and trace is on the physical movement and location of the product.
On the other hand, ‘traceability’ is a broader concept that encompasses the ability to trace the entire history and journey of a product, including its components, manufacturing processes and distribution channels. It is also important to mention that the background for traceability often includes sustainability and recycling. In the current context, the product’s life cycle does not end after sale, as there is a growing focus on a ‘circular economy’ model where manufacturers are increasingly responsible for recycling. Thus, the term ‘traceability’ provides a comprehensive view of the product's movements and allows for detailed documentation of each step in the supply chain.
Upstream vs. downstream traceability
Upstream traceability In the context of supply chain management, 'upstream' traceability refers to the ability to trace a product's components or ingredients back through the supply chain to their original source. This process involves tracking not only the suppliers involved but also the internal production processes of the company. For instance, it includes identifying the specific sources of components used in the product, such as the tank from which the wine in a bottle originated, the batch of corks used and the batch of bottles employed in the production process. By tracing these elements back to their origins, companies can ensure product quality, authenticity and compliance with standards throughout the production chain.
Downstream traceability Downstream traceability involves tracing the movement of a finished product through various stages of the supply chain, such as warehouses, wholesalers, dealers, retailers and ultimately the point of sale (POS) where the product is purchased by the end customer. This process of monitoring the product as it transitions through these different channels enables businesses to track its journey and ensure quality, compliance and authenticity throughout the distribution process. By implementing traceability mechanisms at each stage, companies can enhance transparency, improve inventory management and build trust with consumers by providing visibility into the entire supply chain.
In summary, upstream refers to everything that occurs before the completion of the product's production, while downstream refers to everything that happens after the completion of the product's production.
Product traceability vs. logistic traceability Product traceability refers to the ability to track and trace individual products or items through the supply chain from production to the end customer. It involves monitoring the movement, location, and history of specific products, including information on their origin, ingredients or components, manufacturing processes and distribution channels. Product traceability is essential for quality control, regulatory compliance and addressing issues such as recalls or product diversions.
On the other hand, logistic traceability focuses on tracking and tracing the logistical units or containers that products are transported in, such as pallets, cases or containers. Logistic traceability involves monitoring the movement and storage of these units throughout the supply chain, often using technologies like GPS tracking, environmental sensors and barcode scanning. This form of traceability helps optimise inventory management, reduce transportation costs and improve overall supply chain efficiency. Additionally, Transport Management System (TMS) software is utilised for planning logistical shipping processes, determining which products are loaded onto which lorry, planning routes, scheduling departures even if the lorry is not fully loaded and identifying optimization opportunities.
Problems and solutions to common product traceability problems
Problem #1: Monitor distribution partners and retailers
Brands use supply chain data to understand how products reach the market, how their distribution network functions, and whether retailers are violating their contracts by selling to unauthorised markets. A central challenge for supply chain traceability programs is capturing data in the ‘middle’. In most instances, the brand owners’ control diminishes once the goods depart from their warehouse. Subsequently, wholesalers, retailers, distributors and points of sale typically operate beyond the direct control of the brand owner. Despite the brand owner's desire to track the movement of goods from one location to another and the timing involved, these partners may not be cooperative. They may lack interest in scanning products or may only do so for a fee. Consequently, traceability and transparency efforts often encounter many barriers.
What are the challenges for brands to obtain supply chain data from retailers/distribution partners?
Incompatible Systems: Brands and retailers may use different technological systems and platforms for managing supply chain data, leading to compatibility issues that hinder data sharing and integration. Additionally, brand owners may restrict access to their IT systems, excluding third-party providers, logistics companies and retailers from participation due to limitations and/or wanting exclusive access to their own systems.
Lack of Data Interoperability: The lack of standardised protocols and data formats between brands and retailers can make it challenging to exchange and interpret supply chain data accurately and efficiently.
Data Silos: Data may be stored in isolated silos within organizations, making it difficult for brands to access and aggregate comprehensive supply chain information from retailers and distribution partners.
Limited Data Visibility: Brands may have limited visibility into the real-time movement and status of products within the supply chain due to technological constraints such as inadequate tracking systems or lack of connectivity between systems.
Participation Readiness: In many instances, supply chain partners do not reap the rewards of the track and trace system, as ownership typically rests with the brand owner. They may only perceive the additional workload and expenses associated with scanning and uploading processes. Consequently, the brand owner must consider providing added incentives to logistics partners or covering the supplementary costs incurred by retailers, wholesalers and dealers.
Solution #1: How can modern traceability systems address these challenges?
Modern traceability systems can address these challenges by implementing the following strategies:
They have a target market for each product. The traceability system stores a destination or target market for each product through its unique code. Scan data from endpoints of the supply chain – consumers or inspectors - show whether products have been distributed to right market.
They make it easy for retailers to scan products without IT integration or special hardware. By giving retailers/distributors the ability to scan the codes on the products with their smartphone, they simplify the process, while receiving valuable data and closing ‘blind spots’ in their supply chain. It can even make sense to think about extra benefits for the retailers/distributors for scanning, f.ex. giving them a discount for a certain number of scans on the next order or directly take over the cost for the scanning processes.
They involve the customer. By incentivizing users to "scan" or engage with the packaging, important data can be collected, while at the same time providing useful information or entertaining content to end users. This in turn creates repeat business and customer loyalty.
Moreover, understanding the product's journey up to the point of reaching the consumer can be crucial. Once the product reaches the consumer, the traceability of the entire supply chain route may not be as critical. For instance, if a product manufactured in a factory in China is intended for the Asian market but is scanned by a customer in the USA, it already indicates a potential issue without having to know the entire route that the product took. In such cases, the company can focus on the problem directly without having to trace the entire supply chain. This targeted approach allows for efficient problem-solving.
The implementation of a centralised data bank with limited data sharing. Additionally, modern traceability systems can address the challenge of data sharing reluctance among brand owners by offering a centralised database like our digital platform SCRIBOS 360. This database contains all the necessary data for traceability and transparency, while allowing brand owners to keep the rest of their data within their company. For example, only basic information like batch numbers or production order numbers are stored in the shared database, while the brand owner retains control over the specific details in their ERP system. Authorised personnel can access this shared database, ensuring transparency and collaboration without compromising data privacy.
Problem #2: Demand forecasting
Demand forecasting is difficult within a supply chain for several reasons:
Uncertainty: Demand forecasting is inherently uncertain due to various external factors such as changing consumer preferences, economic conditions, and unforeseen events like natural disasters or pandemics. These uncertainties make it challenging to accurately predict future demand.
Seasonality: Many products have seasonal demand patterns that can fluctuate significantly throughout the year. Predicting these seasonal variations accurately requires a deep understanding of market trends and historical data, which can be difficult to obtain.
Complex supply chains: Modern supply chains are often complex and involve multiple suppliers, manufacturers, distributors and retailers. Each of these entities may have different forecasting methods, data sources and communication channels, making it difficult to coordinate and align demand forecasts across the entire chain.
Bullwhip effect: The bullwhip effect refers to the amplification of demand fluctuations as they move upstream in a supply chain. This phenomenon can occur due to delays in information sharing, inventory stockouts, or pricing strategies, leading to inaccurate demand forecasts at each stage of the chain.
Lack of data: Accurate demand forecasting relies on historical data, market intelligence and collaboration between supply chain partners. However, data may be limited, outdated, or incomplete, making it challenging to develop reliable forecasts.
Solution #2: How can product traceability combat this challenge?
Product traceability provides insight into operations at both internal and external distribution centres, which can be used for demand forecasting, enhancing downstream inventory management and sales and operations planning (S&OP). This is particularly crucial for products offered seasonally or as part of promotional campaigns. Better demand control leads to fewer shortages or overstocks and improved cash flow management.
Furthermore, awareness of the type and extent of stocks in distribution centres can alert the brand to old products that need to be brought to market faster and replaced with newer ones. This helps in optimising inventory levels, reducing waste, and ensuring that products are brought to market in a timely manner to meet customer demand.
Problem #3: Tracing recalls, returns, damaged goods, defects and products with warranty claims
Traceability systems can help identify products that have been recalled and trace them through their distribution path back all the way to production. Traditionally, the tracing of recalled or damaged goods was done manually using text codes and batch, lot and serial numbers printed on the products. This approach lacked traceability data at the supply chain level and made the system not able to integrate client feedback.
Solution #3: How can modern traceability systems address these challenges?
In modern traceability systems, unit-level labels on each product provide distribution and shipping information for each item, including production data (batch, lot) and logistics or shipping data (box, crate, pallet) across various points in the supply chain. This enhanced traceability allows for quick identification of products that need to be recalled or replaced due to defects, damages or warranty claims. By having detailed information on each product's journey, companies can efficiently manage recalls, returns and warranty claims, ensuring customer satisfaction and maintaining product quality standards.
With our digital platform SCRIBOS 360, companies can easily access and manage the recall information for their products. This allows them to quickly identify and notify only the customers who are actually affected by the recall, rather than having to inform everyone. This targeted approach is beneficial for brands, as it avoids unnecessary panic and confusion among consumers. By utilising SCRIBOS 360, companies can streamline their recall processes and ensure that only the necessary individuals are notified, ultimately enhancing customer satisfaction and brand reputation.
Moreover, the ability to track recalls, returns, and warranty claims through traceability systems can also help identifying trends or common issues with products. This data can be analysed to improve product design, manufacturing processes and quality control measures, ultimately reducing the occurrence of defects and enhancing overall product reliability. Additionally, traceability systems enable companies to respond swiftly to quality issues and minimize disruptions in the supply chain.
Problem #4: Compliance with regulatory requirements and trade restrictions
In addition, product traceability is crucial for ensuring compliance with regulatory requirements and trade restrictions in many industries. These regulations often mandate that products and their components must be traceable down to the unit level to meet quality standards, safety regulations and environmental sustainability goals.
A few important European track & trace regulations:
Packaging & Packaging Waste Regulation (PPWR): This regulation aims to reduce the environmental impact of packaging waste by setting targets for recycling and recovery, promoting eco-design principles and ensuring traceability of packaging materials. In November 2022, as part of the European Green Deal and the new circular economy action plan, the European Commission proposed a revision of the Packaging and Packaging Waste Directive (PPWD). The primary goal of this initiative is to ensure that all packaging is reusable or recyclable in a financially viable manner by 2030. The focus is on strengthening the fundamental requirements for packaging to facilitate its reuse and recycling, increasing the utilisation of recycled materials and enhancing the enforceability of these requirements. Additionally, measures are being considered to address excessive packaging and reduce packaging waste. On March 4, 2024, a provisional agreement on the new regulation was reached by the Parliament and the Council. However, formal approval by both institutions is still pending.
Digital Product Passport (DPP): The DPP is a digital document that provides comprehensive information about a product's lifecycle, including its origin, materials used, manufacturing processes and environmental footprint. It enhances product traceability and transparency for consumers and regulators. Currently, the EU is evaluating the implementation of product passports for three key industries—apparel, batteries, and consumer electronics—targeting a rollout in 2026. Other sectors are expected to follow subsequently. However, food, feed and pharmaceutical products are exempt from this requirement under the European Green Deal.
Falsified Medicines Directive (FMD): The Falsified Medicines Directive (FMD) is a European Union regulation aimed at addressing the distribution of counterfeit medicines by mandating safety features and serialisation on prescription drug packaging. Unlike other regulations, the FMD is highly specific in its implementation. Each package of prescription medicine is required to have a unique identifier, usually in the form of a GS1 compliant DataMatrix Code, enabling tracking and verification throughout the supply chain. Additionally, packaging must incorporate an anti-tampering device to maintain product integrity and visually indicate any tampering. An EU-wide verification system has been established to allow pharmacists and authorised entities to authenticate medicines before dispensing them to patients. The key provisions of the Falsified Medicines Directive, including the mandatory use of unique identifiers and anti-tampering devices on prescription medicines, came into force on February 9, 2019. Since that date, all prescription medicines placed on the EU market must adhere to these requirements.
EU Wine Regulation: This active regulation establishes rules for the production, labelling and traceability of wine products in the European Union to ensure quality, authenticity, and consumer protection Starting December 8, 2023, wines sold in the EU must comply with new ingredient and nutrition information requirements. Any wine produced after this date and marketed in the EU must adhere to the latest EU wine labelling regulations, including disclosure of ingredients, allergens, energy and nutrition information, as outlined in Regulation (EU) 2021/2117. Allergens and intolerances must be visibly displayed on or attached to the product, while ingredient and nutrition details can be optionally disclosed through electronic means like a QR code. Wines produced or imported before December 8, 2023, are exempt from these requirements and can be sold in the EU until supplies are depleted. Compliance with these regulations is mandatory for all wines not falling under these exceptions. The definition of ‘produced’ varies depending on the type of wine, with some wines undergoing a second fermentation process that increases CO2 content. This second phase of processing is when the wine is considered ‘produced’, as clarified in a commission notice update on November 24, 2023.
GS1 Digital Link Standard: The GS1 Digital Link standard enables the connection of physical products to digital information, such as product details, origin and sustainability attributes, through unique identifiers, enhancing traceability and transparency in the supply chain. Products require a standardised code for unique identification, whether for goods receipt in the warehouse or for price inquiry at the checkout. The traditional GTIN barcode (currently implemented as EAN-13) has been commonly used for this purpose. However, GS1's Digital Link is emerging as a new solution for digital product labelling, combining existing GS1 standards into a universal 2D QR code. The aim is to adapt to the digital transformation and provide customers with an enhanced shopping experience. The GS1 Digital Link specifies a QR code to contain the GTIN (Company and Product code) instead of using the old EAN 1D code. In addition to this, the standard recommends assigning a unique serial number to each product and including it in the QR code, thereby serialising all products. Additional info, like batch number, expiration date etc., can be added if wanted/necessary. The migration phase is set to be completed by the end of 2027. During this time, both the traditional EAN barcode and the new 2D code will be used together to facilitate a gradual transition for retailers who may not yet have the necessary infrastructure, such as 2D-capable scanners and software updates at the checkouts. Retailers can choose which code to use during the transitional period.
Solution #4: Product traceability plays a critical role in helping companies fulfil the regulations mentioned above.
It enhances regulatory compliance by enabling companies to monitor and track products, ensure safety and quality standards, verify ethical sourcing practices and provide transparent reporting on their operations. By leveraging traceability systems, companies can navigate complex regulatory landscapes, mitigate risks and uphold industry standards, while building trust with consumers and stakeholders.
SCRIBOS offers the ability to supply GS1 compliant data matrix codes or GS1 Digital Link QR codes for products. Furthermore, we can assist in implementing GS1 standards effectively, allowing for seamless integration into existing processes and systems.
What types of traceability data can be obtained from products and supply chains?
Traceability data is divided into two categories: upstream traceability and downstream traceability. The following describes the data that can be obtained from each of these categories, followed by location and GPS data.
Upstream traceability data
As previously defined, upstream (production) traceability data refers to raw materials, materials, machine parts or other inputs for a product. Common upstream data includes:
Batch or lot
Production time
Supplier details
Place of manufacture
Expiry date
Certifications for specific inputs
Traditionally, suppliers store product inputs in a manufacturing company's ERP systems, linked to batch and lot data. Recently, there has been a trend towards tracking inputs from multiple suppliers earlier in the supply chain to meet legal standards, monitor sustainability certifications and calculate carbon footprints throughout a product's lifecycle.
In the wine industry, tracking includes f.ex. identifying the specific barrel from which the wine was bottled, the batch of corks used and the batch of bottles. By using traceability and unique codes, any issues with faulty corks or contaminated bottles can be easily pinpointed to the affected products.
Downstream traceability data
In contrast to upstream data, downstream traceability data comes from the point of production and within the supply chain. It is generated by the producer or manufacturer of the product, the retailers and the customer by scanning the product packaging or the product itself or its parts. Common downstream traceability data includes:
Unit (product) & production data (this data can also be used as upstream data, but is very useful for downstream processes):
Unique identifier at the unit level (based on serialization)
Batch or lot
Expiry date
Production location/ production line/ production order number
Product SKU/material number
Production date
Extended production information
EAN
Quality assurance certifications
Logistics and shipping data:
Intended market (city, country)
Customer name
Shipping date
Customer order
Case, pallet
Import date
Distribution partners, distributors, retailers, wholesalers, point-of-sale:
There are two categories of location data: Passive and active tracking data.
Passive or hop-based location determination: Printed codes such as DataMatrix, QR codes or RFID/NFC labels are affixed to products or logistic units for tracking purposes. These codes are scanned by devices at various points in the supply chain and the location information is then uploaded, using the GPS or location information from the devices (not from the labels/tags) to a traceability system. Mobile apps on smartphones and tablets are increasingly being used for scanning, as well as Android-based handheld devices that are connected to the brand's traceability system. Most of these devices are equipped with GPS.
Geodata can therefore be derived from the device's GPS or determined through user login information. For example, if a specific individual is logged in at a certain warehouse, scans can be attributed to that particular location. This passive or hop-based location determination method enhances the accuracy and efficiency of tracking within supply chains, without the need of using an active GPS tracker.
Real-time GPS or location tracking (also known as active tracking): Product or logistic tracking units regularly report their location, typically on a regular basis (f.ex. hourly), through a mobile or satellite data connection. A small computer or chip with GPS + battery is typically attached to the product or unit (such as a container, pallet or crate) to enable this tracking. These devices, known as ‘active tracking’ devices, do not require scanning by a device or person to generate the location data.
These tracking devices can be expensive, costing up to $100 or more, with additional monthly global data fees. As a result, they are primarily used for high-value products, valuable logistic units like freight containers or in specific segments of the supply chain. To manage costs, companies may implement a procedure to retrieve and reuse the devices after each journey.
Having discussed the data obtainable through product traceability, the following section will delve into the technologies utilised for traceability.
Key technologies and solutions for product traceability
These technologies can be categorised into two main groups:
Printed technologies
Scanning technology, including inline vision systems and handheld scanners
We will describe each important traceability technology, ordered in terms of complexity:
Text codes
Description:
Text codes are alphanumeric sequences assigned to products or logistic units for unique identification
Codes are typically printed on labels or packaging
Used for: Show expiry dates and batch / lot no.
Costs: Low
Benefits:
Compliance with regulatory requirements
Easy to print
Disadvantages:
Potential errors in data entry leading to incorrect information
Limited to manual searches
Cannot be scanned by end users; therefore, no data or engagement from end customer.
1D barcodes
Description:
1D barcodes are linear patterns of parallel lines used for unique identification of products or logistic units. Examples: EAN-13, Code 128, Cod 39, 2 of 5 interleaved and many more.
These barcodes are typically printed on labels or packaging
Used for: Scanning technology, such as barcode scanners, is used to read and track 1D barcodes throughout the supply chain
Costs: Quite low
Implementation costs for printing or labelling 1D barcodes on products
Investment in barcode scanning technology and systems for reading and tracking
Benefits:
Compliance with regulatory requirements; especially many interoperable standards, such as GS1/GTIN
Easy to print
Easy to scan, as it can be read with a laser scanner (red laser line)
Point of Sales scanners can use laser scanners with multiple scan lines, which allows the cashier to easily swipe the product past the scanner, without the need to look for the position and orientation of the code
Cost effective scanners (no camera needed, only laser lines)
Disadvantages:
Minor distortions, dust, or damage can impact legibility: 1D Barcodes usually do not have the ability to correct reading errors. They only work with a check-sum, but not with an error-correction algorithm. This allows only to detect reading errors, but not to correct them.
Compatibility issues between different IT systems
Considered outdated compared to QR codes
Inability to be scanned by end users, limiting data and engagement from customers
2D Codes
Description:
2D codes are two-dimensional barcodes composed of black and white square modules in a square or rectangular layout. Examples: DataMatrix, QR, PDF417, Aztec Code (UPS), Maxi Code (Deutsche Bahn) and many others
These codes efficiently store a large amount of data in a compact space, commonly utilised for product identification and tracking.
Used for:
2D codes are scanned by barcode readers or smartphones to access product details, webpages, inventory tracking and shipping information.
They can be scanned from any angle.
Main application: logistics (f.ex. on letters), webpage URLs (QR)
Costs:
For printing: relatively low
For reading: higher than 1D code, as a camera-based scanner is needed
Benefits:
High data capacity allows for storage of serial numbers, batch numbers and expiration dates.
Ideal for small parts or machines due to compact size and high information storage capability.
Contains error correction, making it possible to also be read if parts are missing. Therefore, resistant to a certain degree of deformation, dirt and wear.
Widely used in regulated industries with interoperable standards like GS1/GTIN.
Disadvantages:
Camera based scanner is required, increasing initial implementation costs.
RFID
Description: RFID (Radio Frequency Identification) technology uses electromagnetic fields to automatically identify and track tags attached to objects. These tags contain electronically stored information that can be read by RFID readers without the need for direct line of sight. RFID technology can be passive, with tags powered by the electromagnetic field generated by the reader, or active, with tags that have their own power source.
Used for:
RFID technology is commonly used for inventory management, asset tracking and supply chain management, as it utilises ultra-high frequency (UHF).
Can be used for bulk reading f.ex. reading several cartons on a pallet at the same time
Exist as Ultra High Frequency (RFID), High Frequency (NFC) and Low Frequency (theft protection in retail stores)
Costs:
The costs of RFID technology include the price of RFID tags, readers, and infrastructure for implementation. While the cost of RFID tags has decreased over the years, active RFID tags can still be relatively expensive compared to passive tags.
The initial investment in RFID readers and software systems can be significant, depending on the scale and complexity of the deployment.
Benefits:
Increased efficiency and accuracy in inventory management and supply chain operations, f.ex. by bulk-reading a complete pallet with products.
Real-time tracking and monitoring of assets and products.
No ‘line of sight’ necessary: Can be read in dark environments and from a distance.
Bulk reading: a complete palette of goods can be swiped through a reading gate, reading all products at once.
Disadvantages:
Requires initial investment in infrastructure and technology.
Reoccurring costs for the tags
Compatibility issues with different systems and standards. Compatibility issues arise with various systems and standards, such as RFID utilising different frequency bands across continents. For instance, RFID systems in the EU require frequencies between 860-960 MHz, while the USA uses 902-928 MHz and Japan operates on 902-960 MHz. This discrepancy can pose challenges for global companies as RFID tags may not be readable in different regions, hindering seamless operations.
Privacy concerns regarding data security and tracking.
NFC technology
Description: NFC (Near Field Communication) technology allows for short-range communication between devices, typically within a few centimetres. It enables devices to exchange data wirelessly and securely, making it ideal for contactless transactions, information sharing, and device pairing. NFC is often categorized under the broader term ‘RFID’.
Used for:
contactless payments
mobile ticketing, f.ex. in public transport
sharing information between devices (such as transferring photos or contacts)
Marketing: As a replacement for QR codes, simple ‘tap’ to be directed to websites
brand protection
Costs: The cost of NFC technology varies depending on the devices and applications being used. Most smartphones and tablets come equipped with NFC capabilities, so users typically do not need to purchase additional hardware – in contrast to other RFID solutions, which need a special reader. However, businesses looking to implement NFC payment systems or other applications may incur costs for equipment, software and integration services.
Benefits:
Convenience, speed, security, and compatibility with a wide range of devices. It enables quick and easy transactions without the need for physical contact, making it ideal for busy environments like retail stores, public transportation and events.
Secure way to transfer data, as it requires close proximity between devices to establish a connection.
Disadvantages:
Limited range of communication, which can be a barrier for certain applications that require longer distances.
Security concerns, as NFC transactions can be vulnerable to hacking or unauthorised access if proper precautions are not taken
Higher cost per tag than a printed code or other non-electronic solutions
Sustainability concerns when recycling packages with ‘electronic components’ on it.
Bluetooth Low Energy (BLE) beacon/chip
Description: Bluetooth Low Energy beacon/chip is a small tag or chip that actively transmits data using Bluetooth technology, typically with a range of up to 100 meters.
Use: Ideal for tracking logistical units, high-value goods and products in real-time. Also commonly used for inventory management in warehouses to streamline operations.
Costs: High initial investment costs for setting up scan gateways and purchasing the units. Additionally, there are ongoing costs per unit for maintenance and monitoring.
Benefits:
Provides real-time updates on the location of assets, allowing for efficient monitoring and management.
Eliminates the need for manual scanning, saving time and reducing human error.
Helps in preventing theft or loss of high-value goods by enabling constant monitoring.
Simplifies inventory management processes in warehouses, leading to more organized and efficient operations.
Disadvantages:
Bluetooth Low Energy technology has a restricted range of up to 100 meters, requiring assets to pass through specific zones for scanning.
Setting up scan gateways and purchasing the units can result in high investment costs.
Maintenance and monitoring expenses per unit can add up over time, increasing the overall cost.
Requires a clear procedure for recovering the beacons/chips at the end of their journey, which can be time-consuming and complex.
Difficult to integrate as label or to make it part of a packaging
Runs on batteries, which have to be replaced every 18-24 months.
Does not fit to a sustainable packaging strategy. If you stick electronics on the packaging, you may have to recycle it as electronic waste.
Ultra-Wideband (UWB) beacon
Description: Ultra-Wideband (UWB) beacon is a tag or chip that actively transmits data and can be received in a larger radius than a Bluetooth Low Energy (BLE) chip.
Use: Ideal for tracking logistic units, high-value goods and products in real-time. Also used for inventory management in warehouses to streamline operations.
Costs: High initial investment costs for setting up scan gateways and purchasing the units. Additionally, there are ongoing costs per unit for maintenance and monitoring.
Benefits:
UWB technology provides precise location data, allowing for accurate tracking of assets.
Real-time monitoring helps in preventing theft or loss of valuable goods, enhancing security measures.
The proactive data transmission feature eliminates the need for manual scanning, improving operational efficiency.
UWB beacons can be easily integrated and scaled to accommodate growing business needs.
Disadvantages:
Setting up UWB technology can be costly, including scan gateways and unit purchase expenses.
The large radius of UWB technology may not be suitable for all products or environments, limiting its use in certain scenarios.
Setting up scan gateways and purchasing the units can result in high investment costs.
End users may find it challenging to scan UWB beacons, requiring additional training or support.
Establishing a procedure for reclaiming the beacons/chips at the end of their journey can be complex and time-intensive.
Difficult to integrate as label or to make it part of a packaging.
Runs on batteries, which have to be replaced every 18-24 months.
Does not fit to a sustainable packaging strategy. If you stick electronics on the packaging, you may have to recycle it as electronic waste.
GPS tracker
Description: A GPS tracker is a small computer device that transmits GPS data in real-time via a mobile phone or satellite network. An example for this technology is the Apple Airtag, which works like a GPS tracker.
Use: Typically used for tracking extremely valuable goods and logistical units in the supply chain to monitor their location and movement. AirTags are used to locate lost items such as baggage at airports.
Costs: High initial investment costs for purchasing the devices and monthly data costs for transmitting the GPS data.
Benefits:
GPS trackers provide real-time tracking of valuable goods, enhancing security measures to prevent theft or loss.
The constant transmission of GPS data allows for better visibility and monitoring of assets throughout the supply chain.
GPS trackers can be set up with geofencing features to alert users when assets enter or leave predefined areas.
Users can remotely access the GPS tracking data via a mobile phone or computer, enabling convenient monitoring from anywhere.
Disadvantages:
In addition to the initial investment, GPS trackers incur monthly data costs for transmitting location information, which can add up over time.
Due to their size and cost, GPS trackers may not be suitable for all products or scenarios, restricting their widespread use.
Regular maintenance, especially when powered by a battery and updates may be needed to ensure the GPS trackers are functioning properly and providing accurate data.
Establishing a procedure for reclaiming the GPS trackers at the end of their journey can be complex and involve logistical challenges.
What is the most popular traceability method at the moment?
DataMatrix codes and other 2D codes are currently among the most popular methods for track and trace, especially when it comes to logistic traceability. These codes are widely used for internal traceability and compliance purposes due to their ability to store unique IDs and other detailed information. They consist of black and white squares arranged in a square or rectangular pattern, allowing for the encoding of data in a smaller space compared to traditional 1D barcodes.
DataMatrix codes are highly versatile and can store a significant amount of information, making them ideal for applications where space is limited.
Product traceability has seen a rise in the significance of copy-proof QR codes, especially in industries prioritizing brand protection. By securely embedding data within the QR code structure, companies enhance the security and reliability of their traceability systems, while also involving end-consumers in their traceability strategy. The easily recognisable QR code allows for seamless scanning throughout the supply chain, providing valuable insights into the product's location.
One notable solution that leverages copy-proof QR codes for traceability and brand protection is our SCRIBOS ValiGate®. ValiGate® is a state-of-the art solution, which combines a unique code ID with an encrypted, serialised security pattern. This ensures it cannot be replicated or re-engineered.
By incorporating our serialised, copy-proof QR code into their packaging and labelling, companies can track products throughout the supply chain, verify their authenticity and provide customers with transparent and trustworthy information.
What are the considerations, if you have chosen your preferred traceability method?
After selecting your preferred traceability method, there are several considerations to keep in mind to ensure the successful implementation of the system. Firstly, understanding the nature of your product or packaging is essential. Factors such as shape, materials, substrate materials and curvature can impact how the identifier, such as DataMatrix or copy-proof QR codes, can be applied and utilised. These codes are known for their resilience to deformations, wear, and tears, making them suitable for various packaging types.
Determining the optimal placement of the identifier on the packaging is crucial for effective traceability, especially if you are including the end customer in your traceability system. It is advisable to choose a prominent location that is easily accessible for scanning. Additionally, it often makes sense to place the code on the outer packaging, even if brand protection is desired directly on the product. Placing the code on the outer packaging offers advantages such as allowing customers to verify the authenticity of the product before purchase, as unpacking before purchase may not be possible or permitted. Moreover, in scenarios where customs need to inspect an entire container, having the code on the outer packaging eliminates the need to unpack all items for authenticity verification and streamlines the inspection process.
When deciding whether to print the codes directly on the packaging or apply them on top as labels, it is essential to consider the cost implications, process changes and brand and customer acceptance. Both options are viable, but they may have different impacts on the overall traceability solution. In some cases, like in the pharmaceutical industry, the code must contain specific data like the expiry date. As this is only known on the day of production, the code must be printed / applied during production. In this case, it makes sense to print it directly on the packaging, as a label would only cause additional costs and effort. Pre-printed labels cannot be used here, as the expiry date cannot be pre-printed in advance before knowing the day/date of production.
Ensuring the security of a traceability project is essential. Many projects include anti-counterfeiting measures like our SCRIBOS ValiGate®, a unique labelling solution with security features that must be considered during project planning and printing to safeguard data privacy and product authenticity.
Grey market traders often invalidate or destroy codes that could reveal their activities, rendering the traceability system ineffective and the investment wasteful. To address this challenge, it is recommended to combine the track & trace feature with brand protection. By integrating brand protection measures and encouraging customers not to purchase products lacking the brand protection and track & trace feature, grey market retailers cannot remove the label or feature without jeopardizing their ability to sell the goods. Therefore, it is crucial to merge track & trace with brand protection to prevent grey market manipulation and uphold the integrity of the traceability project. At SCRIBOS, we provide comprehensive consulting for such projects and identify the ideal solution tailored to the client's needs.
What does serialisation mean for unique codes on products?
Serialisation plays a crucial role in the implementation of unique identification codes on products for traceability at the unit level. The identifier, whether it is an RFID, NFC, QR code, DataMatrix or barcode, must contain a serialised (unique) number or code that is exclusive to a single product or part.
Serialisation, also known as serialization, refers to the technology used to create unique identification numbers for products and parts in large quantities without encountering conflicts. This process ensures that each item has a distinct identifier that can be tracked throughout the supply chain for traceability purposes. Generating these unique codes on a mass scale can be complex, which is why they are typically produced by an Enterprise Resource Planning (ERP) system or a specialised traceability system. These systems are equipped to manage and assign serialised codes to individual products efficiently and securely. Interestingly, ERP systems can generate such numbers, but usually only for outer cartons and pallets. They are not designed to differentiate between identical products inside a shipping container/box. For ERP systems, it doesn't matter which oil bottle is in the carton. This limitation means that these systems are typically used as a track & trace system only at the carton and pallet levels. Once unique codes are introduced at the product level, ERP systems become inadequate and a dedicated track & trace system is necessary.
Serialisation is a regulatory requirement in many industries, particularly in sectors such as pharmaceuticals, where product safety and traceability are paramount. Regulatory bodies often mandate the use of serialised codes to enable accurate tracking and tracing of products throughout the distribution chain, ensuring compliance with regulations and standards.
Overall, serialisation is a fundamental component of modern traceability systems, providing a means to uniquely identify products, enhance supply chain visibility and meet regulatory requirements. By leveraging serialisation technology effectively, companies can improve operational efficiency and mitigate risks. It is also important to note that serialisation does not protect products from counterfeiting, as serialised codes can be easily copied. Serialised codes, also referred to as ‘logical security’, are not sufficient to protect product from physical duplication.
Integrating serialisation combined with a physical security features is therefore essential to effectively safeguard products from counterfeiters. At SCRIBOS, we have a wide variety to choose from.
Which printing technology is suitable for printing unique codes for traceability?
Choosing the right printing technology is essential for creating serialised codes. It is crucial to avoid static printing methods like flexo or offset and instead opt for a digital approach. This can involve using a digital press, such as HP, Xeikon or other digital print presses, or integrating an inkjet add-on into a flexo machine, which can be provided by the companies like MPrint. While HP and Xeikon are complete print press solutions that come at a higher cost, a more budget-friendly option would be an inline continuous inkjet system to apply the serial number, much like an expiry date, without investing in a full printing system. Printers with variable data capabilities play a vital role in printing unique codes on each label, facilitating traceability at the unit level.
In a hybrid printing process, which combines processes like flexo or offset with inkjet systems, labels are initially printed using analogue or static methods, leaving space for the addition of unique codes later in the printing process. Subsequently, digital printers are used to print individualised codes, such as QR codes, directly on the packaging of each product or on labels. This hybrid method allows for the integration of serialised codes onto analogue-printed labels, enabling comprehensive traceability solutions.
For industries like food packaging that predominantly rely on analogue printers lacking variable data support, the hybrid printing approach offers a viable solution for incorporating unique QR codes or DataMatrix codes onto products for traceability at the unit level. It is important to note that a certain resolution is also required for this process. Continuous inkjet, commonly used for printing expiry dates, may not be suitable for generating these 2D codes. Depending on the size of the code, particularly in cases where space-saving is crucial, a printer with 300 dpi or better 600 dpi (or even higher for enhanced copy protection) becomes necessary.
Alternatively, companies may opt to apply separate pre-printed labels directly onto the packaging to achieve the desired traceability outcomes. By leveraging the appropriate printing technology and methodologies, businesses can enhance traceability, improve supply chain visibility and meet regulatory requirements effectively.
What is a product traceability system/traceability software?
Product traceability systems are a new class of software that has emerged in the past decade to address the common challenges that businesses face when implementing traceability in their supply chains.
A product traceability system tracks products from their manufacturing stage as they move through the supply chain. It serves three key functions: generating/printing codes for use on products, capturing data throughout the supply chain, gathering data from different production lines, warehouses and other scanning points and making traceability data accessible to business users through data analysis tools.
Typically, software for product and supply chain traceability begins by gathering data at the production level, at each individual production site. This data is then regularly transmitted to a cloud-based web application, supported by APIs and integrations with your supply chain data, scanning systems, ERPs and other relevant systems.
How can SCRIBOS support your traceability objectives?
At SCRIBOS, we provide guidance on selecting the optimal traceability solution and collaborate to find the right fit, which may include our uniQR®, ValiGate® or RFID/NFC solutions.
UniQR® is a QR code with a unique, randomly generated ID. These unique IDs are securely stored in an encrypted database. Users can easily scan the UniQR® with a camera app and tap on the displayed link. A web application then opens and starts the authentication process. Our digital platform verifies the label ID of the UniQR® against the database, records the verification result (Activated? Original? Scanned too often), and displays the outcome directly. Furthermore, our digital platform SCRIBOS 360 stores comprehensive verification information for experts and can present simplified results for consumers. The SCRIBOS 360 back-end can detect copied codes by identifying IDs that are widely distributed and frequently scanned at different locations. We also offer our ValiGate® solution, a serialised copy-protection pattern that can be seamlessly integrated into QR codes and other shapes or patterns. Utilizing patented algorithms, this system generates unique codes and combines them with a serialised, tamper-proof security pattern, resulting in a copy-protected QR code. These QR codes integrate unique code IDs with an encrypted, serialised ValiGate® SecretCode Pattern ID, ensuring a high level of security. Essentially, our ValiGate® solution functions like a uniQR® but with an additional layer of brand protection, enabling the detection of copies at the very first scan. By scanning this security feature, users can verify product authenticity, while counterfeiters face challenges in replicating our solution, as it based on proprietary technology. Therefore, our ValiGate® technology offers a robust defence against counterfeiting, empowering customers to easily authenticate products and differentiate between genuine and fake items.
With the help of both the uniQR® and ValiGate® solutions, companies can easily track throughout the supply chain and generate valuable track & trace data.
They can be seamlessly integrated with our SCRIBOS 360 digital platform, facilitating comprehensive tracking and analysis of product activities. This innovative system offers a suite of functionalities, including intelligent track & trace, grey market detection, customer engagement capabilities and in-depth analytics.
Every scan of a unique label ID is meticulously recorded in the SCRIBOS 360 platform, enabling comprehensive tracking and tracing of all products. Brand owners have the capability to upload additional product details, such as batch numbers and the designated dealer receiving the product from the warehouse. In cases where a product is scanned in an area not covered by the designated dealer, a diversion alert is triggered, notifying the brand owner of potential grey market activity. This approach, known as 'intelligent track & trace,' involves the consumer performing the final scan, eliminating the need to track the product throughout the entire supply chain, while still effectively identifying grey market activities. SCRIBOS also provides a user-friendly app, called ScanFirst, that assists brand owners in uploading additional information to the SCRIBOS 360 cloud platform, including box or palette codes and details on the warehouse, retailer or customer the product was shipped to. With each label assigned a unique ID, only the first and last codes of a complete production batch need to be uploaded to the database, streamlining the scanning process to just 2 scans for a large batch of hundreds or even thousands of products and enhancing the system's efficiency. This makes the system ‘intelligent’.
By leveraging our solutions, brands can effectively trace your products to end consumers, while safeguarding them throughout the supply chain. SCRIBOS provides a holistic approach to traceability, offering protection against counterfeiting, enhancing sustainability and enabling detailed monitoring and analysis of product movements. With our advanced technologies and integrated platform, you can ensure product authenticity, optimize supply chain visibility and mitigate risks across your operations.
If this seems overwhelming, don’t worry. We specialise in helping brands find their perfect traceability solution. Just reach out to us at hello@scribos.com.
Autor
Sabine Carrell, International Communications Manager at SCRIBOS
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