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Traceability along the supply chain

As supply chains become increasingly complex, the demand for transparency and traceability continues to grow. Companies, customers and authorities are demanding clear insights into the origin, status and quality of products along the entire value chain. RFID technology offers an effective solution to ensure real-time traceability and significantly increase supply chain efficiency.

Regulatory developments

Legal requirements and their impact on traceability in the supply chain

The topic of traceability along the supply chain has increasingly come into focus in recent years, particularly due to new regulatory developments. A key law in Germany is the Supply Chain Due Diligence Act (LkSG), which came into force on January 1, 2023. This law obliges companies to respect and protect human rights and environmental standards along their entire supply chain.

The legal requirements include

  • Risk management
  • Companies must identify and assess risks in their supply chains.
  • Preventive measures
  • Measures to prevent human rights and environmental violations must be implemented.
  • Remedial measures
  • Immediate remedial action is required when violations are identified.
  • Reporting
  • Companies must report regularly on their due diligence obligations and their implementation.

What impact does this have on traceability in the supply chain?

Increased transparency
Companies need to provide detailed information about their supply chains, which enables better traceability.

Technological support
The use of technologies such as blockchain can help improve traceability and ensure compliance.

Sustainability and responsibility
By complying with legal requirements, companies can better achieve their sustainability goals and fulfill their social responsibility.

Challenges in the traceability of the supply chain

What are the benefits of using RFID for traceability in the supply chain?

The use of RFID technology in the supply chain offers a range of benefits that can improve both the efficiency and transparency of processes. Automatic identification and data capture using RFID allows companies to precisely monitor and control their goods movements.

[Translate to English:] Transparenz
Improved transparency and traceability

With RFID gates at critical points, objects can be recorded in real time. This makes it possible to track the path of an object through the entire supply chain, from production to the end customer. This significantly improves the traceability of products, which is particularly useful for companies with high traceability requirements.

[Translate to English:] Effizienzsteigerung
Increased efficiency

By automatically recording the movement of goods, throughput times and possible idle times can be precisely recorded. This helps to identify bottlenecks and optimize processes. The efficiency of the entire supply chain can be increased as fewer manual interventions are required and sources of error are reduced.

[Translate to English:] Optimierung Lagermanagement
Optimization of warehouse management

RFID enables precise stock control and management. By automatically recording incoming and outgoing goods in the warehouse, stock data can be updated in real time. This leads to a reduction in overstocks and out-of-stock situations, which in turn lowers warehousing costs and increases customer satisfaction.

[Translate to English:] Automatisierung
Process automation

The integration of RFID into the supply chain enables the automation of numerous processes, from incoming goods inspection to production and shipping. For example, in a manufacturing process, an RFID label can be automatically applied to an enclosure after production and the information about the new enclosure can be transmitted directly to an ERP system. This reduces manual effort and speeds up processes.

 

[Translate to English:] Qualität
Improving quality assurance

Thanks to the precise recording and documentation of goods movements using RFID, quality controls can be carried out more efficiently. Errors or deviations in the production process can be detected and rectified more quickly, which improves overall product quality.

 

[Translate to English:] Sicherheit
Increasing security

RFID technology can also help to increase security in the supply chain. By tracking products accurately, theft can be combated more effectively.

Use of RFID along the supply chain

Upstream traceability

Upstream traceability enables seamless tracking of the origin of raw materials and materials right back to the start of the supply chain. Transparent supply processes allow companies to understand exactly which suppliers have provided which materials and where they come from. This not only ensures high product quality, but also supports sustainable and ethical procurement practices.

Downstream traceability

Downstream traceability refers to the systematic monitoring of the distribution of products by the manufacturer, including tracking where the goods have been delivered after production. This enables a detailed recording and analysis of the processes that take place after the sale from a company perspective.

 

[Translate to English:] Vor- und nachgelagerte Traceability

The supply chain

Raw material supplier

• Tags store information such as origin, quantity and quality checks

Production

• Attaching RFID tags to raw materials or components for tracking throughout the production process
• Ensuring that the right parts are used in the right order
• Monitoring production steps in real time and documenting work steps
• Quick identification and reduction of errors

Warehousing

• Automatic recording of storage and retrieval using RFID
• Immediate stock recording
• Improved inventory management and accuracy

Transportation and logistics

• Recording of articles during loading and unloading of trucks using RFID readers
• Monitoring the location of products during transportation

Distribution

• Management of stock on shelves or in storage areas
• Reduce the need for manual stock counts
• Prevent losses by tracking stolen or misplaced items

Return logistics

• Return management for reusable items such as pallets or containers
• Ensuring the return and possibility of reuse
• Reduction of costs

Best practices: Which metrics should be monitored?

  • Delivery performance:
    • Number of on-time and complete deliveries by suppliers
  • Lead time:
    • Time required to receive an order from the supplier
    • Increasing the flexibility and responsiveness of the supply chain through shorter lead times
  • Inventory accuracy:
    • Monitoring that actual inventories match the inventories recorded in the systems
    • Avoidance of bottlenecks or overstocks through high accuracy
  • Batch traceability:
    • Information on which batches come from which suppliers and where they were delivered to
    • Compliance with legal regulations
    • Traceability in the event of product recalls
  • Quality controls:
    • Number of defective products or returns
    • Low error rate as an indicator of high product quality and a well-functioning supply chain
    • Documentation of the results of quality checks along the entire supply chain
  • Cost monitoring:
    • Total supply chain costs, including transportation, storage and administration costs
    • Minimizing costs through efficient supply chain management practices
  • Compliance rate:
    • Monitoring supplier and partner compliance with established standards and regulations
  • Sustainability monitoring:
    • Measuring the environmental footprint of the supply chain, such as CO2 emissions or energy consumption
    • Protecting the environment and improving the brand image through sustainable practices

KWS SAAT SE & Co. KGaA: Traceability along the supply chain in the food industry

Production: RFID technology is used at each of KWS' production sites, which are located throughout Europe, to record seed bags during the production phase. During seed production, each bag is fitted with a UHF RFID transponder. These RFID transponders enable seamless tracking of the seed, as each bag is assigned directly to a specific customer. Despite the geographical distribution of the production sites, all data is collected in a central system thanks to RFID. This ensures transparency and traceability right at the start of the supply chain.

Packaging: Once the seed has been packaged, it is transported to the palletizing machine. Here, each individual bag is recorded in the GRAIDWARE middleware using RFID technology.

The bags are automatically counted and palletized, and the finished pallet is then subjected to a target/actual check. With the help of GRAIDWARE, a virtual pallet is created from the oldest recorded bags. The RFID scanner at the end of a production line is therefore able to identify an entire pallet based on individual bags.

When the pallet label is attached to the pallet, product-related information is added to the GRAIDWARE database for each individual bag and transferred to the central database.

Logistics: Logistics companies are used for shipping, some of which reorganize and reassemble the pallets. When wrapping the newly assembled pallets, all bags are identified again by several RFID readers. This is also where the bags are linked to the order data and assigned to delivery note information.

Data transmission: All RFID data is encrypted and sent to a central database for tracking and reporting.

End customer: For end customers, KWS offers additional information on the seed, which can be accessed via a QR code. This code can be scanned directly from the seed bag and provides valuable information on origin, quality and specific product characteristics.

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Viktor Wagner
Viktor WagnerManaging Director

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