Improving Transparency and Traceability within Supply Chain First Mile
Typically, when organisations speak of supply chain transparency, they focus on the last mile: the product journey from “production to fork”, with a view to reducing energy and waste while optimising efficiency and flexibility in final delivery. However, the first mile of the supply chain – from “farm to production” – is just as important.
The first mile encompasses everything before goods are received for manufacturing an end product, including raw material extraction and cultivation. It can be long, geographically widespread, and complex. It is also often the most challenging part for businesses to track. However, building transparency and traceability into the first mile is crucial to improving resilience and agility and ensuring regulatory compliance.
A 2024 report from Jabil and Industry Week suggested that organisations have recognised the necessity of harnessing supply chain data, with 69% of respondents saying they have limited visibility and need more. With this in mind, Lee Metters, Global Business Development Director, Domino Printing Sciences, considers some of the factors behind the growing importance of first-mile visibility, and looks at how manufacturers can implement processes that will help improve transparency and traceability within this critical part of the supply chain.
The value in end-to-end supply chain visibility
Having complete, end-to-end visibility of supply chains is playing an increasingly important role in helping to promote resilience in an uncertain geopolitical and economic environment. Full supply chain visibility can help manufacturers respond more efficiently to supply and demand changes – and maintain stock (and pricing) levels at times of disruption. It can also help increase consumer and stakeholder confidence in a brand’s environmental commitments and help ensure compliance with new and upcoming regulations.
A well-managed, transparent first mile forms the foundation for an efficient, safe, sustainable, and compliant end-to-end supply chain, while a poorly managed first mile can have the opposite effect.
Lack of first-mile visibility can mean businesses need to hold excess inventory to deal with unexpected changes in demand. In addition, a business without complete visibility of exactly where different batches of raw materials and ingredients are sourced from can run the risk of widespread product recalls and associated reputational damage should an issue occur downstream.
Whereas the focus on supply chain transparency has typically been on the last mile, today, we are witnessing an increase in new regulations requiring brands to provide information on the first mile of their supply chains. Examples include the US FDA Food Safety Modernization Act, aimed at preventing foodborne illnesses, and the EU Deforestation Regulation (EUDR), which covers all deforestation-linked commodities sold in Europe, including wood, coffee, and cattle. Environmental, social, and governance (ESG) reporting regulations are also expected in the coming years, requiring businesses to work with their suppliers to meet Net Zero goals and certify products. The penalties for failing to comply with regulatory requirements can range from hefty fines to possible criminal convictions.
Consumer demand for supply chain transparency is also on the rise. A 2020 study by Fashion Revolution suggests that as many as 69% of EU consumers want to know how their clothes are manufactured, while 2022 research from Harris Poll, commissioned by Google Cloud, found that 66% of shoppers actively look for eco-friendly brands, but 72% think that companies and brands overstate their sustainability efforts.
So, how can manufacturers go about embracing full supply chain traceability? According to a 2024 MHI report, visibility and transparency are key trends impacting supply chains, and businesses should consider prioritising technology investment and supplier collaboration as a means of improving transparency.
Supply chain digitisation
Adopting traceability in the first mile has historically been challenging. Many manufacturers will deal with a high volume of small-scale raw material providers and handlers in multiple countries and are likely to have data management hampered by manual, error-prone processes.
