Looking back on trends that gathered momentum in 2023, and making predictions about 2024, several concepts lead the traceability space. Most won’t come as a surprise – and will continue into 2024. The same challenges continue to exist and new regulations and consumer expectations create new requirements for brands and manufacturers. Let’s reflect on 2023 and make some predictions about 2024.
Revisiting and reflecting on 2023 trends
Looking back at 2023, a few notable reflections and predictions are worth (re)visiting to assess the current situation and make predictions about where we are going.
Investing in sustainable and resilient value chains
While not new, the idea of visibility into value chains and traceable supply chains has fueled discussion and technology development in the traceability space for years. In particular, this has accelerated during and since the Covid pandemic. Traceability, according to Bain and several other consultancies, accelerates progress toward “sustainable outcomes and delivers better business results and competitiveness”.
Scaling traceability data to maximize value
When dealing with billions of data points, traceability is hard to scale. In 2023 brands started to understand the idea of digital ID technology. They are taking it on as a means not just for basic traceability but also as an introduction to value-adding use cases.
Diving into the data
Use cases made possible by digital ID tech and traceability come down to collecting, structuring and sharing (and the interoperability of) massive amounts of data that accompany a product’s journey. Brands are recognizing that owning zero-party data is an enabler. And using a universal language and standards for data sharing provides an edge in supply chain resilience, risk assessment, consumer engagement and more.
Counterfeit goods continue to plague companies and their supply chains across industries. Whether it’s luxury and fashion goods, aviation, or food-associated brands, stakeholders suffer the consequences of eroded brand trust. From source to sale to consumption/use, negative impacts can include consumer health crises (the baby formula is a repeated case in point), expensive and inefficient recalls, profit losses, and reputational damage.
Embracing circularity and sustainability
More than just Digital Product Passport and other regulatory compliance moves, circularity, and sustainability have entered the consumer’s lexicon and list of concerns. True circular business models are only possible if products are traceable at a granular level, which in turn helps to advance ESG and sustainability initiatives. Traceability, product digitization, and connected products lead the way.
Predictions with an eye on 2024
What will 2024 hold in terms of digital technology and its effect on supply chains? Here are some of our predictions.
Putting ESG and sustainability atop the agenda
Verifiable sustainability has become a must-have more than nice-to-have. Between the changing regulatory landscape and corporate ESG goals, and the unrealized potential of consumers who are willing to pay a premium for environmentally and socially responsible products, a focus on measuring the environmental and social footprint goes hand in hand with higher margins and increased operational efficiency. Brands like Tony’s Chocolonely lead the way.
Putting the consumer front and center
From regulations enshrining anti-greenwashing and the consumer right to repair goods to consumers using their voices and wallets to demand transparency into the goods they buy, brands recognize that sustainability is key to customer experience initiatives. In 2022, Forrester/Rockwell research indicated that 62% of companies were planning to use traceability data to improve CX; this number is only increasing as brands seek to elevate their relationship with consumers.
Integrating digital technology for supply chain visibility
Digitizing the supply chain has posed challenges and supply chain execs have cited digitization efforts as disappointing. This may change as the mix of regulation (e.g., digitizing the food supply chain in the US with the introduction of FSMA 204) and technology solutions almost mandate digitization. This could pave the way for connected products powered by digital IDs. Digital tech will mean smarter products that carry data from across their entire supply chain journey with them.
Using AI: Quality data
AI is everywhere. It remains to be seen if the noise is just hype or will materialize into something more in 2024. Meanwhile, AI’s impact on supply chain analytics is only as good as the data you use. Poor-quality data input yields poor-quality output. To make the most of traceability data from products, digital transformation will be required for most companies. Reliable, granular data from every aspect of the business will not only be mandatory for regulations (FSMA, DPP) but also essential for being competitive.
Taming and getting ROI on all that data
Supply chain traceability generates a massive amount of valuable data. If made accessible in a single place, it can lead to multiple ROI streams if deployed strategically. From insight that delivers improved operational efficiency, cost savings, and quality control to tangible metrics on carbon emissions, waste reduction and recycling, maximizing ROI will require effectively taming billions of data points and managing and structuring a wider variety of data streams to tap into the insight, which connected product platforms are designed for.