Over the past 100 years, the global supply chain has drastically changed – and the Covid-19 pandemic has triggered its most recent revolution. If, in the past, a product’s journey from the producer to the end-user was short, slower, local, and straightforward, today is fast, disperse, and international.
While this is necessary to meet the end-user’s needs, supply chain managers are facing unprecedented risks, such as counterfeit, fraud, diversion, manipulation, or simulation. In turn, these can lead to a poor customer experience, public health issues, and damages to the organization as a whole.
Luckily, technology can help. Thanks to Unit-Level Traceability (UTL) solutions, you can gain better control over your supply chain, overlook the journey of your products across the distribution channel, and guarantee their authenticity.
In this guide by Authena.io, we’ll look at what Unit-Level Traceability is, what industries can make the most of it, and what benefits this technology can offer your organization.
As today’s supply chain continues to change to meet the user demand for availability of supplies, convenience, and speed, new and hidden risks might arise.
Additionally, it has become increasingly difficult to maintain a “farm-to-fork” continuum in the fast-moving consumer goods (FMCG) industry. Because of this, the threat of public health issues stemming from supply chain management is always more significant. Lastly, at-risk industries such as agriculture, healthcare, and skincare are suffering financial losses and image damages because of diverted or fake goods.
Unit-Level Traceability – referred to as ULT – is a custom-designed system that combines a range of integrated technologies, including NFC labels, environmental sensors, geolocators, and blockchain recording. When applied via smart packaging and tamper-proof systems, UTL solutions allow an organization to maintain unparalleled control over each stage of the supply chain.
In particular, ULT systems focus on delivering greater control over supplies and the items and parts used to create the finished product.
From the lower-tier supplier to the top-level retailers, supply chain managers can use UTL systems to:
The best way to ensure that a ULT system is as efficient as expected is to create a custom-made solution. Indeed, each company, department, or industry will have unique needs and a different supply chain to manage.
Additionally, ULT systems are only a part of a wider, all-encompassing end-to-end solution that integrates a range of technologies and Internet of Things devices. When in place, this end-to-end framework can track, trace, and authenticate products and supplies across the entire supply chain system, from start to end.
Here are just some of the tools used in ULT systems.
Radio Frequency Identification (RFID) tags utilize wireless, two-part technology. The RFID tag will be read by a handheld, enabled device, thus delivering real-time information regarding that product’s journey, handling, and manufacturing. Built in RFID chips provide each supply item at the beginning of the supply chain with a unique identification tag. Thanks to this system, supply chain managers can benefit from greater visibility of each item, batch, or shipment.
NFC Tags – or Near-Field Communication Tags – work similarly to RFID labels, but with some added benefits:
In particular, NFC tags are used to guarantee each supply’s authenticity.
Barcodes, QR codes, and Unique Codes have long been used for product identification and supply chain management. However, they have become increasingly popular among consumers and businesses over the past two years, as Covid-19 restrictions asked for a seamless, touch-free exchange of data. Because of their popularity and due to the fact that the code to decipher the information they contain is clearly visible, they are easily duplicable and more subject to tampering.
While blockchain technologies have been in use for over ten years (famously underpinning the cryptocurrency bitcoin) it is still considered to be an emerging system. Indeed, this integrated technology is constantly finding new uses and applications, revolutionizing fields from finance to healthcare.
The truly revolutionary aspect of blockchain technologies is that it allows to store transaction records safely, accurately, and making them impossible to be manipulated. Using Authena’s Smart Contracts and blockchain frameworks with your organization’s supply chain allows you to safely record and monitor the journey of each unit through the supply chain.
ULT systems are efficient for any organization that bases its operations on an extended, global, or dispersed supply chain. In particular, ULT solutions can help:
Here are some of the industries that benefit the most from the introduction of these systems.
From an innovation perspective, the automotive sector is one of the industries struggling the most with extended and dispersed supply chains. This is because the finished automotive product requires the collaboration and coordination of several suppliers and manufacturers, each of which has its supply chain.
Some of the challenges faced by this industry include:
In the automotive industry, ULT solutions are employed to improve the traceability of the components needed for each sub-system of a car. In particular, these solutions aim to address:
Pre-delivery failures alone have been seen to cost car companies around $40 billion in insurance claims each year.
ULT systems used in the automotive industry make use of tools such as RFID chips, unique codes, HD barcodes, anti-peeling labels, tamper-proof tags, NFC chips, and blockchain.
The food manufacturing and the FMCGs industries face unique supply chain-related challenges. Here are some trends and challenges that are defining the industry as it is today:
Counterfeit supplies, ingredient manipulation, adulteration, and fake goods cost the industry a whopping 34 billion US dollars a year. But what’s more, is that fraudulent imitations and food product packaging adulteration can cause severe public health issues and illnesses. In turn, this can significantly damage the whole brand’s image and reputation – or even cause a global scandal!
Unit-Level Traceability and active packaging solutions in the food manufacturing supply chain can be a solution to many of the issues seen above. New technologies such as blockchain verification and electronic tags (such as RFID and NFC labels) allow for the tracking of each unit, batch, or container, ultimately increasing food safety and product’s shelf life.
In this way, manufacturers can gain increased awareness of the food’s journey and prevent a snowball effect that can stem from unsuitable ingredients.
The pharmaceutical industry deals with similar challenges to the ones faced by the FMCG industry. However, here, the public health risk related to counterfeit goods is even greater!
According to statistics, in 2016, the trade of counterfeit and fake pharmaceuticals reached a whopping 4.4 billion US dollars – and the losses for pharmaceutical companies are even greater at over 200 billion US dollars!
In the pharmaceutical industries, public sentiment, geopolitical changes, and international events can significantly affect the diamond and supply. For example, shortly after the Covid-19 pandemic hit, the extreme shortage and huge global demand caused a fake Covid-19 vaccine threat.
However, when pharmaceuticals – or the components used to create medicinals – are counterfeit, the risk involved is much higher than financial losses! Fake pharmaceutical drugs and treatments can be ineffective, dangerous, or even fatal for patients.
While unit-level traceability systems are not yet widespread in the pharmaceutical industry, what happened during the Covid-19 months and the vaccine rollouts has sped up changes that were already happening.
Today, ULT in the pharmaceutical industry comes integrated with smart-packaging solutions. Intelligent drug packaging can help a company:
The alcohol industry is one of the most prone to counterfeiting and fake good issues, and it can be challenging to establish the extent of financial losses that occur in the sector every year.
However, according to EUIPO statistics, losses to the fake good markets amount to over 3.1 billion US dollars each year. Of course, the damages of these trade extend to a loss of jobs and tax revenue on an international scale.
Adulteration of authentic products and mislabeling fake goods are the two main issues manufacturers face – and they happen at the vulnerable nodes of the supply chain and distribution network.
Thanks to Unit-Level Traceability and active packaging solutions, each company can now serialize its production and use unique identification codes to track each bottle of wine, case, container, or batches throughout their journey to the consumer.
In the case of the alcohol industry, ULT can also be used for forward and backward traceability across the supply chain, meaning that retailers can obtain all necessary information regarding the product within istants.
While it used to be easier for manufacturers to control their supply chain, the increased need for radical transparency and consumer demand have triggered the latest supply chain digital transformation.
The technologies used to create a tailored ULT solution offered unparalleled benefits, including:
Unit-level traceability systems and active packaging are essential to provide information and keep an eye on every stage of the supply chain, especially as this expands and utilizes an international network of suppliers, merchants, and retailers.
Every organization is unique, and so is its value chain. The key to implementing a unit-level traceability system that is efficient and able to protect your brand and consumers is in opting for a tailored solution with enhanced functionality.
At Authena.io, our custom end-to-end product authentication framework provides a track-and-trace system that allows you to monitor and protect your supply chain from start to end. According to your need, through our main solution Authena Shield™, we are able to guarantee the authenticity of your products, detect unauthorised interactions with goods in real time and use them at the same time as a means of communication for a modern customer experience and personalised engagement. Whilst via Authena L1VE™ we enable brands to monitor in real time the product location and multi-environmental measurements across country borders, in any country of the world, enabling the most efficient product distribution management worldwide, including single product recall in case of alerts for non-conforming parameters.