Supply Chain

What is traceability and why is it needed?

Tracing products is an important aspect of supply chain management and resilience.  There are varying motivations for understanding the origin of products. In some industries, such as the mining sector in Rwanda, traceability is a regulatory requirement.  Elsewhere it is a way of monitoring the impact of initiatives, such as climate-smart agriculture or livelihood improvement programs with smallholder farmers.  In Malaysia, our clients use tracing tools to tackle deforestation in the palm oil sector, which improves the sustainability of the product and reduces brand risk. In other instances, tracing data is used to support brand promises about the origin of a product, especially high-end goods claiming single origin.  These examples highlight the fact that “Traceability” has become a word frequently used in respect to varying objectives, so what does it actually mean?

There are different ‘levels’ of traceability.  For some, traceability is the ability to trace the chain of custody for a product back to its origin.  It is knowing that this bag of coffee was produced by that farmer.  This is particularly important where the productivity of individual farmers is being monitored or where there are risks in the supply chain surrounding the conditions and circumstances in which goods are produced, such as child-labour and deforestation.  For others tracing to a community or farmer organisation level is sufficient, for example assessing the impact of community self-help groups or informing a customer of the region in which their cocoa was produced.  However, tracing to this level in developing countries can be difficult, especially when multiple stakeholders and middle men are involved.

In addition to tracing products, traceability can also be used as a term to describe the tracing of finance and effort.  For example, many development projects want to trace resources provided to farmers, whether this is the provision of inputs, knowledge (i.e. training), or finances.  An example of this type of tracing is a project we are working on with coffee farmers in Uganda.

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At GeoT, we have developed a system that allows customers to know specifically where their goods come from and connect this with information about the production processes.  This allows companies and development initiatives to adopt a holistic approach to supply chain management, resilience and sustainability.  The design of investment initiatives into smallholder farmers can be determined through the data collected on their practices, initiatives can then be monitored through the collection of project data (such as records of training, input distribution, etc), and the impact of an initiative assessed through a combination of data collection (to see how practices have changed) and traceability (to monitor the quality and quantity of the produce).

So, to answer the initial question, the exact definition of traceability depends on what the motivation is for it.  As with so much, the level of traceability adopted will depend on what is required to achieve the traceability objective, taking into consideration the parameters of price, time and quality.  Whatever system specifications are implemented, a tracing system should result in greater knowledge, trust, and accountability along the supply chain.

 

Electrical Faults: will the switch to electric cars create healthy shockwaves in the cobalt supply chain?

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Electric cars are the solution to all our transport pollution issues. Or are they? Following France’s ban on petrol and diesel cars by 2040, other countries are following suit. The result is an expected increase in electric cars operated on re-chargeable batteries and a decrease in pollution. However, in addition to the fact that electric cars are powered by electricity from coal fueled plants, there are also issues in the supply chains of the components of the cars, particularly that of lithium-ion batteries. Production of the battery requires cobalt, but supplies of this mineral are currently limited (due to the lack of sources) and ethically questionable. The majority of the world’s cobalt is from the DRC, however, the current unstable political climate in the country has led to a fall in production and a sharp increase in price. Over the last year the price has more than doubled, reaching 59784USD/MT in June. With supply still restricted and demand set to increase further, the market is expecting further increases in price. One potential consequence of this is that the increased profit margins will draw artisan miners and traders into the market who couldn’t not previously afford to operate. This trend is likely to increase the risk of conflict-minerals entering the supply chain, something which is unfortunately already occurring. There is a lack of transparency in the sourcing of cobalt, which not only impacts the car industry, but has a broader reach into other supply chains, such as that of the smart phones most of us use.

Can anything be done to address these supply chain issues? There is no doubt that solving the sourcing issues for cobalt and other minerals is highly complex and requires a holistic multi-agency approach. However, the expected rise in the price of cobalt, resulting from the increased demand, should allow extraction companies to invest in their mining processes and traceability solutions. One of the issues is that as the price of cobalt increases, it will be attractive for people to sell cobalt on the black market, hiding the origin of the mineral and the practices used to extract it. With supply limited, buyers may also choose to turn a blind eye to practices in order to obtain the cobalt they need. However, for those who choose to, the increased profit margins could be re-invested in the supply chain to improve its sustainability, including increased transparency. GeoT already supports companies demonstrate that their tin, tantalum and tungsten are sourced ethically, and provides tools to gather data on interventions taken with artisan producers.

With the increased global focus on the cobalt supply chain, extraction companies now have the opportunity to differentiate themselves through providing customers with piece of mind about the origin of their cobalt.

Traceability for Palm Oil now Commercially Available

Over the last two years Geotraceability has been working with the largest names in the palm oil sector to develop a ground-breaking software solution to assist with some of the industry’s key sourcing challenges.

Geotraceability’s purpose is to better integrate small-scale farmers in global supply chains. We do this by providing tools to, improve supplier relationship management, deliver traceability, increase FFB volume and quality for the mill, then, using the same data, we can simultaneously produce individualised Farm Business Plans, to improve smallholder productivity and livelihoods.

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Our approach involves adapting and configuring the Geotraceability system according to your needs and the processes which already exist in your business. We then combine this with our specialist in-house support and training services, to offer cost-effective and scalable solutions for;

 

  • Accurate GPS farm mapping
  • Farmer surveys on mobile Apps

  • FFB supplier quality management & analysis

  • Bespoke FFB traceability systems from field-to-mill

  • Live dashboards with total system synchronisation

  • Tailored productivity improvement plans for growers

Following the completion of a successful prototype, we can now offer this solution at a very attractive commercial rate both for initial set-up and on-going cost.

See the GeoT for palm oil briefing for more information and please get in touch if you’d like to see a demo of the solution or have any questions.

Please also note that Geotraceability will be at the upcoming RSPO EU Roundtable in London, June 12-13th, 2017, and we’d be happy to arrange a meeting with you in person.