Eight Practices for Implementing Traceability in Apparel Supply ChainsNov 18, 2023
Each quarter, our parent company TradeBeyond publishes its comprehensive Retail Sourcing Report, which is filled with timely research, facts, and analysis to help brands and retailers make the most informed sourcing decisions. In addition to critical updates on economic indicators and commodity prices, the new Q4 2023 Retail Sourcing Report also features an extensive breakout section on traceability.
Traceability refers to the ability to track and trace the movement of products, materials, and information at various stages of the supply chain from raw material sourcing through production and delivery. It is a critical aspect of supply chain management for all industries, as it enhances transparency, sustainability, and accountability. The apparel industry in particular has pioneered traceability practices that can be adopted across retail sectors.
It is a big challenge for retailers and brands to keep up with gathering, managing, and reporting on all this data and the numerous ESG and regulatory requirements that are being adopted globally. Out of necessity, sophisticated technology has been developed to track and trace every touchpoint of an apparel product from inception to delivery. Leading apparel retailers and brands have a range of solutions they can adopt, but they have a narrow window to ensure they stay ahead of the myriad compliance requirements coming onstream.
To implement traceability in apparel supply chains, companies can use a combination of technologies such as barcoding, RFID, blockchain, and data management systems. These technologies enable the collection, storage, and sharing of supply chain information in a secure and transparent manner. Additionally, collaboration among stakeholders within the supply chain is critical to successfully implementing traceability practices. Solution providers such as Pivot88 and TradeBeyond are invaluable partners in advising on best practices and implementing traceability technology. Using powerful Applied AI, these platforms streamline traceability processes for retailers, serving as a central repository of all chain of custody data and documentation while creating safeguards, such as automatically flagging any unmet chain of custody requirements before orders ship so retailers can avoid fines and detainments.
Here are eight methods apparel brands and retailers are using to implement traceability.
Blockchain Technology: Blockchain is being explored as a tool to enhance traceability in the apparel supply chain. Since it allows for a transparent and unalterable record of every step in the production and distribution process, blockchain technology can help verify the authenticity and origin of apparel items.
RFID and IoT: Radio-frequency identification (RFID) tags and Internet of Things (IoT) devices are increasingly used to track products at various stages of the supply chain. This technology enables real-time monitoring of inventory, reduces errors, and improves traceability.
Transparency Initiatives: Many apparel brands are making efforts to provide consumers with more information about the origins of their products. This includes disclosing the source of raw materials, manufacturing processes, and labor conditions through product labels and QR codes. These initiatives build trust with consumers and promote ethical sourcing.
Supply Chain Mapping: Supply chain mapping helps companies gain a better understanding of their entire supply chain network. This includes identifying suppliers, sub-suppliers, and the relationships between them to pinpoint potential risks and areas for improvement.
Sustainability and Eco-Friendly Materials: Traceability is also closely tied to sustainability efforts in the apparel industry. To support labelling and claims of green or organic products, retailers and brands are now required to trace and verify the use of sustainable and eco-friendly materials throughout their supply chains.
Consumer Engagement: Brands are using various methods, including QR codes and mobile apps, to engage consumers in the traceability process both from a communication and a marketing perspective. Customers can scan a code on a clothing item and access detailed information about its journey from raw materials to the store shelf.
Regulations and Standards: Governments and industry organizations are rapidly developing regulations and standards to promote traceability and responsible sourcing in the apparel industry. Compliance with these regulations is now a necessity.
Third-Party Auditing and Certification: Third-party auditing and certification bodies are instrumental in verifying the authenticity and compliance of supply chain practices and ensuring quality. Audits supporting branding claims and certifications such as fair trade, organic, and other ethical labels can be managed through a centralized dashboard, with alerting and other functions.
For more extensive ESG and traceability insights, download TradeBeyond’s Q4 2023 Retail Sourcing Report. If you’re interested in learning how Pivot88 can help your company build a more transparent, efficient supply chain, contact one of our traceability experts any time.