Conversations around supply chain transparency often focus on the last mile, optimizing and tracking the product journey from production to retailers or consumers to reduce energy and waste while maximizing efficiency and flexibility. However, the first mile of the supply chain is just as important.
The first mile encompasses everything before goods are received for manufacturing, including raw material extraction and cultivation. It can be long and complex and is often the most challenging part for businesses to track but building transparency into the first mile is crucial to improving resilience and agility and remaining compliant with new and upcoming regulations.
A 2024 report from Jabil and Industry Week suggested that organizations have recognized the necessity of harnessing supply chain data, with 69% of respondents saying they have limited visibility and need more[i]. In this blog, we’ll look at how technology is lending a hand by enabling manufacturers to implement processes aimed at improving transparency and traceability within the first mile of their supply chains.
The need for end-to-end supply chain visibility
A well-managed, transparent first mile will set the foundations for an efficient, safe, sustainable, and compliant supply chain, while a poorly managed first mile can have the opposite effect.
Having complete, end-to-end visibility of supply chains can help manufacturers respond more efficiently to supply and demand changes and possible disruptions and increase consumer confidence while remaining compliant with new and upcoming regulations.
Lack of first-mile visibility can mean businesses need to hold excess inventory to deal with unexpected changes in demand. In addition, a business without complete visibility of exactly where different batches of raw materials and ingredients are sourced from can run the risk of widespread product recalls and associated reputational damage should an issue occur further downstream.
Today, we are witnessing an increase in new regulations requiring brands to provide information on the first mile of their supply chains. Examples include the US FDA Food Safety Modernization Act, aimed at preventing foodborne illnesses, and the EU Deforestation Regulation (EUDR), which covers all deforestation-linked commodities sold in Europe, including wood, coffee, and cattle. Environmental, social, and governance (ESG) reporting regulations are also expected in the coming years, requiring businesses to work with their suppliers to meet Net Zero goals and certify products. Punishment for non-compliance with regulatory requirements can range from hefty fines to possible criminal convictions.
Consumer demand for supply chain transparency is also on the rise. A 2020 study by Fashion Revolution suggests that as many as 69% of EU consumers want to know how their clothes are manufactured[ii], while 2022 research from Harris Poll, commissioned by Google Cloud, found that 66% of shoppers actively look for eco-friendly brands, but 72% think that companies and brands overstate their sustainability efforts[iii].
So, how can manufacturers go about embracing full supply chain traceability? A 2024 logistics trade association MHI report, highlighted visibility and transparency as one of five key trends impacting supply chains and called for businesses to prioritize investment in technology and supplier collaboration to improve transparency[iv].
Digitizing supply chains
Adopting traceability in the first mile has historically been challenging, with manufacturers often dealing with numerous small-scale raw material providers and handlers in multiple countries and data management hindered by manual, error-prone processes.
However, in recent years, there have been advancements in technology solutions aimed at improving transparency and traceability, which can help brands overcome some of these challenges. Potential solutions include on-product identification codes to facilitate seamless traceability and digital data sharing at the batch level, alongside data analytics and visualization tools to manage complex data, provide insight, and streamline decision-making.
Establish raw material procurement tracking
The first and most important step is working with suppliers to implement traceability record keeping for raw materials, identify gaps in reporting, and record all necessary data. Understanding what data to collect and how to acquire it is crucial. Companies should collaborate with supply chain partners, provide precise specifications for raw materials, and implement digital record-keeping processes for purchases.
Embrace 2D codes for batch-level identification
Once raw materials are received at the point of manufacturing, data from suppliers will need to be tied to the finished product using variable data printing technology. Brands can utilize the latest 2D code technology, in the form of QR codes powered by GS1, to embed batch-specific information, such as batch or lot numbers, accessible via a simple scan. This information will allow for raw materials included in specific batches of products to be traced back to the original supplier. This kind of granular information can prove very valuable in the event of a product recall, as the affected batch of products and related suppliers can be easily identified.
Create a data integration strategy
For some manufacturers, simply tying a product back to a raw material provider may provide sufficient detail – but there is the potential to do more. Businesses should look to create a data integration strategy and consider how to develop or adopt standards for sharing data among supply chain partners, as well as embracing tools to enable data sharing and analysis, such as those mentioned in the sections below.
Turn data into actionable insights
Equipped with a robust and reliable flow of batch-level product data, brands can utilize analytical tools to obtain valuable insights on products as they move through supply chains and link this back to the first mile. Data analytics will require multiple systems to communicate, so companies must consider coding and marking systems that allow for interconnectivity between equipment using industry standards to track and record data across the supply chain.
Use dashboards to identify trends
Taking things to the next level, manufacturers can use an ever-increasing range of advanced visualization tools to better understand their available supply chain data. Examples could include dashboards that show the geographic origin of materials and the flow of goods from raw materials supplier through to the final retailer; simplifying the data in this way can help to identify inefficiencies and/or bottlenecks and improve decision-making with a view to making supply chains run more efficiency.
Tracking the first mile: The key to a more efficient supply chain
By ensuring that products can be quickly and efficiently tied back to their raw material providers, manufacturers can set the scene for a more efficient, safe, and sustainable supply chain – not just in the first mile but within manufacturing operations and downstream as products move through retailers and into the hands of consumers.
As an expert in advanced variable data printing, Domino can support brands looking to implement batch- and item-level traceability for products and provide automated tools and cloud technology necessary to share information and facilitate transparency in supply chains.
If you would like advice on implementing batch-level product traceability on your production lines, please get in touch; we would be happy to discuss the best solutions and support available to help you to fulfil your first-mile traceability goals.
[i] https://www.jabil.com/services/supply-chain-services/supply-chain-resilience-report.html
[ii] https://www.fashionrevolution.org/resources/consumer-survey/
[iii] https://cloud.google.com/blog/topics/consumer-packaged-goods/data-shows-shoppers-prioritizing-sustainability-and-values
[iv] https://og.mhi.org/publications/report