73 percent of consumers are willing to pay more for a product that offers complete transparency. Some 49 percent say they do not have any information to verify the sustainability claims of products. The key to increasing consumer trust is thus to embrace traceability and transparency. This will, in turn, create opportunities to improve efficiency and cost effectiveness throughout the product lifecycle.
Transparency is the new cool
Most consumers now expect brands and companies to be responsible and transparent, so much so that they won’t hesitate to change brands that fail to match their values. More specifically, consumers increasingly want to be informed of the global ecological impact of the product, showing a preference for products that are not harmful to the planet or themselves. They favor local/short circuit, responsible and ethical production channels. They also seek assurance both of authenticity when buying second hand and of quality when purchasing reconditioned goods. How can companies provide them with reliable evidence of their commitments?
What if the product could talk?
Traceability enriches the content and value of a product throughout its lifecycle, from the origin of the raw materials to its sale and beyond. It provides knowledge of the product and its identity: origins and characteristics, physical flows, stages of its lifecycle. From a customer experience perspective, traceability makes products unique and nurtures customer trust by providing tangible proof of the company’s sustainability claims. It also makes the product the entry point to a service-oriented digital customer experience.
Yet the benefits are much wider: enriching product data serves operational excellence from creation to sale and supports a more agile and efficient supply chain – including suppliers upstream – with lower levels of waste and resource consumption. Moreover, capturing information from all stages of the product life provides valuable insights to conceive and produce products in a sustainable way so that they last longer and have a smaller environmental impact.
Use cases are deeply connected to industry-specific needs
At Capgemini Invent, we work with our clients to identify the most relevant traceability use cases to meet customer expectations, while assuring economic profitability. Note that new regulations also trigger traceability systems implementations, such as a need to track bisphenol A (BPA) in certain goods for which its use is banned or restricted, or food companies tracking batches to be able to recall suspect/contaminated ones.
There are multiple applications for consumer goods companies. The following is just a representative sample of real-life instances where traceability is enabling customers to:
- look behind-the-scenes at the Etam Group factories producing the pieces presented in stores;
- access the entire “Carrefour Quality” data chain by 2022 (supported by blockchain);
- discover Garnier’s sustainability score regarding the overall environmental impact of its products (manufacturing, packaging, transportation, use, etc.) and make more environmentally friendly choices;
- verify product authenticity with certification (useful for second-hand items) or by getting insights on how to check for counterfeits: finding a specific hologram or code that should appear on the product.
B2B companies can also apply such strategies. For example, companies supplying materials in industries with strong environmental externalities, like mining and metallurgy, need traceability for ensuring compliance with corporate social responsibility (CSR) measures and sharing information on origins with customers.
Another use case is setting up a product health record to follow all events during a product’s lifecycle, for example the replacement of spare parts in the case of a car. With a better understanding of the product use, companies can improve its conception and design for a longer life and reduced environmental impact.
4 key challenges to address
They are four main challenges to overcome when implementing a traceability program:
- Tracing back through the initial raw materials channel and collecting information on origin, composition, manufacturing process and flow at each step of the value chain
- Ensuring the collection of data, its authenticity and consistency, while guarantying suppliers’ independence and data protection when setting up a connectivity platform
- In a large ecosystem, collecting sustainability proofs and guarantees and making them transparent to customers with an end-to-end data platform
- Reconciling available data in a clean way even if it comes from poorly managed or non-harmonized databases
Transforming pain points into opportunities
Transparency rests on two pillars: a clear definition of the company ambition, and a reliable traceability platform that shares product characteristics and supplies origins information. The company should study internal and external expectations, then build use cases that transform pain points into opportunities.
On the tech side, most companies already have a lot of data available, even though it must be reconciled and shared, used and valorized. The first step consists of leveraging the existing data to set the basic building blocks of traceability. It can evolve later according to needs, technologies, and maturity in a resilient and modular system. Depending on the ambition, it could go to a finer granularity level, digging further upstream, etc.
At Capgemini Invent, we help to define traceability strategies that fulfil both customer and operational requirements. Together with our clients, we design, build, and deploy a transversal data platform to aggregate, verify and certify data, and enable information sharing across the supply chain ecosystem. Finally, we support implementation of the traceability solutions, connected with IS ecosystems.
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In charge of the Intelligent & Sustainable Operations entity of Capgemini Invent. Our mission: to put operations at the service of a desirable future by harnessing the power of technology and data, in all industries.
Director, Global lead Sustainable Operations & Supply Chain, Capgemini Invent France