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What is Traceability in Production & Why is it Important?

Published: · Last updated: · 8 min reading time

Traceability is quickly becoming an important part of the manufacturing process for companies in a multitude of industries. While some believe it only applies to products that might be subject to recalls, such as food, automobiles or aircraft, traceability should be a part of every manufacturer’s processes. 

Considering the significant cost, resource and productivity advantages it provides, it’s not hard to see why. By implementing systems that encourage high-level tracking and tracing capabilities, organizations can exercise more granular control over their production process. This helps them make products that are safer, of higher quality and create processes that can be optimized for continuous improvement.

What is traceability?

Traceability is the ability to track every aspect of manufacturing and distributing a product, from “cradle to grave” or “farm to fork”. It allows producers track and trace each component that comprises a product, from the suppliers, through the manufacturing process and, eventually, to the final consumer. 

Traceability is regulated by ISO 8402 which defines it as “the ability to trace the history, application or location of an entity by means of recorded identifications.” Organizations that implement traceability procedures and systems are able to access historical information about their products, including: 

  • Origination of components 
  • Inspection notes 
  • Production lifecycle 
  • Time spent at each workstation 
  • Product destinations

Traceability is primarily focused on enabling accurate tracking and tracing of products, and these constitute the cornerstones of the concept. Tracking capabilities enable organizations closely follow the progress of a product throughout the manufacturing process (sometimes, from the supplier as well) and on to the final consumer. Tracing provides the means to follow the sequence of production vertically along the value chain, allowing organizations discover the origination and history of products.

Types of Track & Trace

Traceability may include downstream/upstream tracing or internal/external traceability. Downstream tracing allows organizations trace individual product copies or lots along the production chain from manufacturer to consumer. Upstream tracing enables the tracing of products from consumer to manufacturer, and even to supplier. 

Internal traceability includes all aspects of tracking and tracing production efforts within a single facility or organization. External traceability covers the ability to identify where a product has been (and what has been done to it) before entering a facility or where it goes after leaving the facility. 

Downstream tracing is particularly essential for products that are associated with a warranty or guarantee from the manufacturer or dealer. These include cars and household appliances, for example. Perfect downstream tracing is particularly crucial for recall campaigns.

For manufacturers and dealers, downstream tracing is also an essential resource in terms of successful marketing and excellent customer loyalty. Manufacturers and dealers who know which products have been used by whom for how long can address their customers with very targeted marketing measures and thus ensure ideal customer loyalty.

Upstream Tracing

Upstream tracing refers to the tracing of goods against the logistical chain, i.e., from the consumer to the retailer, his supplier, and, if applicable, to the original producer.
A typical example of upstream track & trace is food. Since 2005, the European Union has had a regulation on the traceability of foodstuffs. This is intended to ensure, in the interests of the highest possible consumer protection and the most excellent possible transparency, that in the event of problems with food, for example, in the case of unacceptable levels of contaminants, the originator can be identified as quickly as possible.

Internal Traceability

In addition to external traceability along the production and supply chain, the internal traceability of parts and products also play a major role in companies. Especially large companies with large plants in different countries need to know which elements and products were processed in which plants and in which manufacturing processes.

In practice, each product or batch is given its own identification number, which enables an internal company and plant track & trace. This identification number can be assigned additional information throughout the manufacturing process, such as dimensions or inspection results.

Internal traceability also plays a vital role in the parts management of companies. Track & trace is used here to control and operate reusable parts such as tools. Through the use of specific serial numbers, it is traceable in detail.

The meaning of Traceability

The traceability of products and parts is of paramount importance, especially for companies in the manufacturing industry, as they are forced to maintain the highest quality standards. If a problem arises with regard to product quality, a company must be able to rectify it immediately. The costs of recall campaigns, for example, in the automotive industry, often add up to hundreds of millions of euros.

Furthermore, in a global economy, the supply and service chains in almost all industries are internationally interlinked. Against this background, the traceability of products and goods is a necessary prerequisite for the successful operation of companies in a global environment.

And last but not least, consumer protection is also a reliable driver for transparency in value chains. Companies that are not able to practice upstream and downstream tracing can face massive legal difficulties in case of doubt.

How does it work?

There are two primary components that underlie effective traceability systems. These are: 

  • Reliable identification/coding; and 
  • Central recordkeeping 

The process requires adopting an identification or coding system that enables unique tagging of individual products, lots or production from a geographical area. This involves using technologies such as permanently marking part or components as they enter assembly or directly from the supplier. Organizations may utilize 2D bar codes, data matrix ID or RFID tags here. 

Once the product or component begins the manufacturing process, its ID is captured in real time and transmitted to a central database, along with information about the work done at each workstation. This is repeated across every station the product or component passes through, creating a rich history of the production journey of each unique product. 

This data can be compared with production planning systems to ensure that no step is missed. Quality control can be implemented automatically implemented at each stage of the process by checking the part against a bill of materials to confirm it has arrived at the correct location and gone through the appropriate assembly process. 

When a product accumulates a complete manufacturing history, it is said to be fully traceable. While traceability systems such as those described above were costly to implement in the past, even more sophisticated systems are now becoming available at competitive costs. 

Why is traceability important?

As more facilities and manufacturers transition from analog manufacturing to digital processes, it’s becoming clear that traceability is the future of manufacturing. 

Technology has already revolutionized the manufacturing process, leading to cost and resource savings. However, as industry 4.0 continues to pick up speed, organizations can begin to fully enjoy the broad benefits of technology-enhanced production through robust traceability systems. 

There are other critical considerations that also underpin the importance of traceability for organizations. These include: 

  • Product recall: Product recalls can be devastating. Traceability is vital for quick, efficient and less costly product recall. It not only helps organizations manage these situations better, traceability also helps prevent avoidable product recalls. 
  • Quality control: With the high-level control it provides over the manufacturing process, traceability encourages granular quality control. This is invaluable in industries such as automotive, food production and defense. 
  • Operational efficiency: Too often, the manufacturing process is characterized by waste, especially when caused by factors that may have been prevented if only discovered early enough. With full traceability systems implemented, organizations can optimize their production processes to enable efficiency and reduce resource wastage. 
  • Customer satisfaction: Ultimately, business is about solving the problems of consumers and positioning oneself as a valuable provider of solutions. With robust traceability systems, organizations are better positioned to implement the incremental improvements that help them present higher-quality products that comprehensively meet customer needs. 

Benefits of traceability

Organizations that start implementing traceability can begin to take advantage of the radically increased insight and control they have over how their products are manufactured and distributed. They can easily avoid problems with manufacturing and when these occur, putting out the flames will be a lot easier. 

Product recalls can be a nightmare, leading to terrible costs and significant damage to an organization’s brand, reputation and market share. As the Harvard Business Review ominously warns, this multi-faceted threat faces all businesses, regardless of industry. 

By implementing a well-designed traceability system, organizations can prevent disaster and access multiple benefits, including: 

  • Seamless root cause analysis: Traceability makes it much easier to identify potential problems before a product ships, accurately predict the extent of the problem and isolate its root cause. 
  • Continuous improvement: The modern organization is lean, agile and flexible. Traceability encourages the adoption of a lean manufacturing process that minimizes waste and encourages serial improvement. 
  • Value stream mapping and optimization: With greater control over the manufacturing process, organizations are better able to understand what makes their products unique or successful and optimize those aspects. 
  • Meet compliance mandates: Regions such as the EU require traceability in certain industries, such as food production. Other industries such as automotive, aerospace and defense also require strict traceability programs. 
  • Avoid the costs of non-traceability: Horror stories abound of product failures that could have been avoided or mitigated if a traceability system had been implemented. Organizations can avoid these disasters by ensuring they have a robust system that covers their entire process. 
  • Effective global production: With increasing globalization, organizations are now having to maintain global supply, manufacturing and distribution chains. Over those thousands of miles, there’s a lot that can go wrong. Traceability helps ensure the risk of disaster is kept to a minimum and provides the tools required to quickly nip problems in the bud when they occur. 

Using FORCAM for robust product traceability

FORCAM supports organizations with a high-performance solution that helps implement high-performance, well-integrated traceability systems. We partner with companies looking to ride the wave of the ongoing digital revolution by providing a turnkey and fully flexible IIoT solution that enables them take advantage of the unique opportunities of the digital age. 

If you would like to learn about how FORCAM can transform your manufacturing process, please get in touch with us


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