Supply Chain Compliance: Why Product Provenance Matters

With a new year upon us, one of the first things on the horizon for the industry is the introduction of the Supply Chain Due Diligence Act, which went into effect on Jan. 1 in Germany. The legislation aims to improve the international human rights situation by making it legally binding to ensure certain standards of due diligence in supply chains are met.

Globally, there are increasingly more (legal) initiatives coming into force to help improve visibility and compliance within supply chains. Often, these activities refer to the term ESG: environmental, social, and corporate governance, areas most businesses are now looking to address.

Besides regulatory necessities, consumers are curious and critical about how their favorite brands treat workers and the environment. Therefore, fashion retailers can strive to meet customers' expectations by becoming increasingly sustainable and transparent.

Caring About Supply Chain Visibility

Customer expectations, human rights and supply chain due diligence laws all over the world require detailed supply chain visibility now more than ever. Today's consumers want to know the story of their purchases, where and how products were made, and if workers were paid fairly and treated with respect.

Meeting regulatory necessities should be a top priority for supply chain visibility, which is why we're seeing new laws and regulations commence to help improve labor conditions, environmental impact, and product quality. While legal requirements are often perceived as an obstacle to businesses, they can also unlock innovation and alternative ways of working.

Customer expectations have changed, with consumers increasingly expecting product transparency. And with the rise of eco-shopping, procuring sustainability is vital. This can be achieved via secure tracking-and-tracing possibilities, with sustainable ways of operating not possible without traceability.

Every product can get a (counterfeit-proof) unique product identity, also referred to as a Digital Product Passport. Then, cloud-based platforms, based on the EPCIS standard (Electronic Product Code Information Service), can track and trace each product's origin and query if the identity is genuine, therefore ensuring the protection of the brand.

RFID read points make it possible to identify leakage and anomalies. This helps to find "gaps" within the supply and transportation network and to make merchandise "omni-available." To ensure a positive shopping experience is achieved in an omnichannel world, stock visibility is of significant importance as it enables all channels to access the stock of all locations.

Platforms Make it Easy and Reliable to Share Information

Communication between the participants in a supply chain is essential to ensure a direct exchange. However, even within companies, data is often kept in silos. Using standards like EPCIS, supply chain traceability can be structured and streamlined, allowing the transparent data needed to provide shareable evidence of product provenance. Along the way, professionalizing and increasing the efficiency of data collection and consolidation remains a challenge for many companies.

This is where EPCIS  is working as an enabling standard to create and share visibility on stock positions in the supply chain or a value network. Simply put, it provides a common language to capture and share so-called EPCIS events through supply chain processes. That means customers know what a product is, where it came from, who made it and what happened to it over time.

Why RFID is the Enabler

RFID makes it easy to authenticate, track and trace products. If each item is equipped with a RFID label, including a chip that stores a unique identity, it can be seamlessly captured whenever the status or the location of that product changes. RFID technology can be applied to achieve increased efficiency, accuracy and visibility.

Supply chain compliance, traceability, and visibility are absolutely critical in today's world. Besides the numerous regulatory requirements around the globe, consumer demands have changed. Impactful item-level visibility is unlocking opportunities to make processes more reliable, efficient and sustainable. This will only continue in 2023, so retailers need to continue and improve their efforts in line with expectations without compromising on efficiency.

Tom Vieweger is a RFID business expert at Nedap, a leading RFID provider in the global fashion market.