Sourcing Traceability

Sourcing Traceability and Blockchain

Sourcing Traceability and Blockchain

IoT Solutions in Managing Sourcing Activities for Raw Materials

The concept of "traceability" was regulated in the ISO 9001 standard by the International Organization for standardization. In terms of identification and traceability, the ISO 9001 standard establishes the following: 

  • Using adequate means to identify outputs when it is necessary to guarantee the conformity of products and services.
  • Identifying the status of outputs with respect to the monitoring and measurement of the requirements during production and provision of services.
  • Checking the distinct identification of outputs when traceability is a requirement and preserving documented information to allow traceability.

In the era of globalization, the traceability of raw materials is therefore a crucial point for all companies of any sector.

The Digital Transformation that in recent years has been involving the markets offers innovative tools to support an increasingly precise and punctual traceability of raw materials, semi-finished products and processes, even in all those cases where a unique identification element cannot be inserted (UHF , NFC, QR Code).

IoT, Intelligent Objects and Traceability

The Internet of Things (IoT) is an innovative technology that allows you to get objects interacting with the surrounding world by means of internet-connected chips.

These smart objects can collect information but also perform actions thanks to input received from the environment. This innovation allows a genuine digitalization of the processes by moving towards the automation of the collection of data that’s useful to the tracking of raw materials. 

Over the years various technologies have been used in order to obtain the traceability of raw materials, such as the barcode, introduced in the 70s in the US throughout the trade sector, and then the two-dimensional barcodes (QR code), readable through smartphones. Compared to barcodes, QR codes can store more data but are vulnerable since they can be manipulated rather easily. A further evolution in the traceability system consists of RFID technology. 

Through this innovative technology, the raw materials and semi-finished products are tagged with a chip and a micro-antenna. This allows data to be communicated via radio impulses. Unlike the previous barcodes and QR codes, the RFID tags offer great security because the system can be encrypted and the password can be protected.

Being able to trace all the phases of the distribution is a process of massive usefulness to a company since it permits a mapping of origin of all the components, rising upstream in the value chain until the first act of creation of raw materials. Thus, in the presence of any criticalities on the finished product, it will be possible to identify the problem accurately. 

The advantages for the buyer are manifold. For example, it will be possible to implement evolved labeling to make the experience of purchasing faster and more satisfying, thereby strengthening the sense of trust in the brand.

Sourcing Traceability and Blockchain

Sourcing Traceability and Blockchain

The concept of traceability is based on the knowledge of the history and location of an entity through any registered identification. In the manufacturing world, the traceability starts at the source, from raw materials, semi-finished products and transport and going towards final purchasers through the packaging and distribution.

Today, innovative technological solutions are increasingly used for the monitoring and registration of the flow of goods such as radio frequency identification (RFID). In fact, RFID tags are now widely used on pallets, speakers or individual products. 

In this perspective the integration between Sourcing Traceability and Blockchain is increasingly important.

In fact, traditional traceability systems adopt centralized or distributed architecture; both of these solutions have problems such as the risk of data tampering, information disclosure and transparency.

The innovative Blockchain technology instead is able to offer: safe traceability and control, data immutability and the creation of trusting relationships.