Why does a manufacturing company need traceability?

Traceability is a concept that has recently gained significant popularity in business and is becoming a tool for gaining consumer trust. In an era of conscious customers, the ability to track every stage of production is no longer a luxury but a standard. Before diving into the intricacies of this subject, consider whether you know where the products you buy in the market actually come from. Where does the milk in the carton come from, or the grain used to bake the bread that smells so enticing at the local bakery? These are the questions we’ll try to answer today. But before we get there, let’s reflect on what the traceability system entails.

Traceability refers to how manufacturing companies track products at every stage of the production chain. From the moment the raw material is received by the production plant, through its internal circulation within the factory, processing, to the final product.

I want to explain this concept from both the consumer’s and the entrepreneur’s perspectives. Why? Because all of us consume goods, and understanding how production documentation occurs can help you feel more secure, especially if you’ve ever doubted the quality of a product or its documentation process. If you are a product manufacturer, an entrepreneur, or a manager, I hope to equip you with the necessary knowledge and show you how to ensure product traceability.

You don’t need to abandon your current procedures or proven production methods. Remember, you can continue doing what you already do but in a more automated way. I hope to inspire you to implement some changes in your company.

Traceability, in simple terms, is the ability to track the processing of a product throughout its production chain. From the moment raw materials—be it grain, milk, or metal—are collected to the moment the final product hits the store shelves.

Every company must somehow identify the products it manufactures. This identification depends on various factors, such as production process standards and the contracts negotiated with the end customer. These standards differ by industry; for example, product identification in the food industry will differ from that in the chemical or electronics industries. Car production is a good example, as cars often consist of parts from many suppliers, with the factory that assembles the car being the end customer in the production chain. It is this factory, whose logo appears on the hood, that sets the standards for documentation related to traceability. In the chemical or food industries, the end customer might be a supermarket or wholesaler.

In reality, there are many major players in the market, each imposing different standards. This article will focus on traceability within a factory, from the moment the production plant receives the raw material (e.g., milk, machine parts, grain) until the finished product leaves the factory.

Let’s step into the consumer’s shoes. When do we trust a manufacturer? Most likely, when they are fully transparent. Trust increases when a company implements an IT traceability system that eliminates human error risks.

As mentioned, every company is obligated to track the production history of its products. A key aspect of traceability is documenting what happens during production. For example, in the case of milk cartons, an automated traceability process assigns a unique code (QR or barcode) to the milk. Consumers can scan this code to access the entire process documentation related to the milk’s production. They can learn how pasteurization was done, at what temperatures, where the carton came from, and the parameters of the machine that packaged the milk. There is an extensive amount of data that can be associated with this QR code.

From the consumer’s perspective, the benefits of production transparency include feeling safe about the product’s quality, building trust in the manufacturer, and positive brand perception.

For companies, automatic or semi-automatic systems gather data directly from machines or are manually entered by operators. This optimizes costs and saves time compared to manually writing reports. Over the course of a year, this can save hundreds, if not thousands, of hours that can be dedicated to other activities.

Automation accelerates data flow. When traceability information is recorded on paper, it reaches the customer with a significant delay. Production managers also receive this information much later. Digitization allows real-time access to the production process data, enabling quicker business decisions, such as machine adjustments, parameter changes, or process delays/acceleration.

Another advantage is safety. Systems that automatically collect data and compare values to nominal production standards allow for rapid responses when anomalies occur, such as a deviation in pasteurization temperature. The fact that the information is available in real time enhances safety since more people can react promptly to any issue.

Automation also impacts technological know-how. If the data is stored in a system, there is no need to focus on training for documentation or process oversight. Furthermore, companies that automate traceability become more competitive in the market, which can be leveraged during negotiations with business partners. In many cases, traceability projects can be funded through grants or by end customers.

To implement traceability, a unique code must be assigned, which can apply to two types of processes:

The labeling method is tailored to the process type, and typically, the labeling applies to the packaging of the product, but that is a topic for another discussion.

Let’s use a milk carton as an example. With a QR code, companies can link the milk to its raw materials and other products produced at the same time. This has practical applications.

Imagine a situation where a batch of product reaches stores, but the packaging is defective, even though the product itself is fine. The company needs to assess the scale of the issue and consider recalling the defective packaging.

A traceability system allows companies to quickly track defective products using the QR code. How do most companies operate without such a system? Many are required to have traceability, but often rely on manual, paper-based reporting, which can take much longer.

Consider a production scenario where you produce ready-made baking mixes. You accept various raw materials, mix them in specific proportions, and then package them. Here’s how the process typically unfolds:

Paper-based reporting poses several problems. First, quality control is done manually, and second, there is a high risk of errors due to manual data entry.

There are two types of traceability systems:

The choice depends on the production process and the company’s equipment. Both systems ensure that data entered once can be used multiple times.

Traceability can be used to:

Traceability is more than just a tool; it’s a philosophy that can revolutionize how we perceive production and consumption. Modern systems allow consumers to become more informed, while manufacturers can gain customer trust and improve efficiency and competitiveness.

For more information, visit the YouTube channel of our CEO, Adrian Stelmach – Digitalizuj.pl