Understanding the importance of supply chain traceability is one thing. Implementing it effectively is something else altogether.
Befuddlement over the latter is the reason behind TrusTrace’s rejiggered edition of its open-source traceability playbook, which the Adidas-approved compliance platform unveiled on Tuesday at the Global Fashion Summit in Copenhagen.
If version 1.0 presented the “why” and “what,” said Shameek Ghosh, TrusTrace’s co-founder and CEO, then version 2.0 shows the “how.
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“Whereas last year’s playbook focused on defining traceability, its drivers, stakeholders, business case and more, this year’s roadmap dives a lot deeper and provides a concrete guide as to how to successfully achieve traceability,” Ghosh said. “After the launch of last year’s book, we found that while traceability has become more widely understood, there is still not enough established knowledge of exactly how to implement traceability so you achieve your sustainability and business goals.”
The sequel edition, a collaboration once more with innovation nonprofit Fashion for Good, offers a practical guide punctuated by real-world case studies and expert insights on how to adapt to the shifting due diligence landscape, promote industry standardization and spur collaboration.
Much has changed over the past year, Ghosh said.
“More and more companies are waking up to the fact that traceability cannot be handled by a single person with little or no resources but is a transformational project that requires proper resources and staffing to succeed,” he said. “Consequently, we have seen many companies hiring establishing teams or departments for traceability. However, given the field is still relatively new, and many are doing traceability roles for the first time, the knowledge on the ‘how’ is still nascent.”
With legislation cracking down on everything from forced labor to waste, traceability is no longer a “nice to have,” Ghosh said. “It’s a must-have to continue to operate now, and even more in the future.”
Take the Uyghur Forced Labor Prevention Act, or UFLPA, in the United States. Failure to comply puts shipments at the risk of being detained or even lost, he said. Over in the European Union, businesses that aren’t prepared for impending eco-design and digital product passport requirements will shed their competitive edge. And if a company can’t keep up with tightening Securities and Exchange Commission reporting regulations, then “shareholders will not be happy,” either.
This increased scrutiny, Ghosh said, is “creating the sense of urgency needed to get mobilized and aligned.”
That’s not to say there aren’t significant roadblocks to making traceability a reality, he said. For one thing, the call to action needs to come from the very top; otherwise, the initiative is doomed to fail with little to no resources and less-experienced personnel. A lack of internal alignment can also lead to abstract, slow-moving projects or, conversely, hyper-focused but small pilots that are impossible to scale.
Rustling up quality data at a quick enough clip is another perennial problem: Without standardized methodologies, collecting, comparing and sharing information across different geographies and product categories remains a struggle.
Then there are the laggards who are taking a “wait and see” approach as many laws are still being hammered out, Ghosh said.
“But it takes years to create a solid traceability program across your full portfolio, so [this] will put you at a huge disadvantage and will likely lead to non-compliance, as you will not have time to get your data together by the time the requirements become clear,” he said.
Figuring out a comprehensive way to tackle traceability is still one thing many brands wrestle with, agreed Matthew Xu, CSR and sustainability lead at Asics, one of the brands that shared its experience with the playbook.
The Japanese sportswear maker worked with TrusTrace to develop a “project charter”—essentially a document detailing opportunities, goals, expectations and key performance indicators—“thus keeping everyone focused” on ensuring its traceability system’s adoption by employees and suppliers.
“From a strategic standpoint, we closely monitored upcoming laws that would affect us,” Xu said. “For instance, the UFLPA highlighted cotton as the primary material subject to mandatory traceability. Accordingly, we determined the highest-volume products and identified the appropriate traceability tiers.”
For Sherry Fazal, senior manager of global ESG and sustainability solutions at Tapestry, everything begins with commitment.
“We already had a master data hub for product lifecycle management, materials management and enterprise resource planning data in a centralized repository,” she said. “The next step was understanding how to slice and dice the different pieces of data to get accurate ESG [and] traceability reporting.”
Fazal said that it was the job of the Coach and Kate Spade owner’s chief supply chain officer to communicate its mission to its suppliers, as well as find out what they needed in return.
“We believe that being partners, rather than dictating our demands, is key to how we are seen by the suppliers in our value chain,” she said. “We believe this will drive their willingness to participate.”
Coachtopia, Coach’s new circularity-focused sub-brand, proved to be a “great opportunity” to get vendors aligned with its traceability “ground rules” from “day one,” Fazal said. But achieving Tapestry’s overall vision won’t be a linear process because ESG is now a “key part” of its business, she noted. “That’s the important part—we learn, we tweak, we pivot.”
Other retailers are getting on board. On Thursday, S.Oliver announced a strategic partnership with Retraced to not only boost transparency within its own supply chains but also to improve product traceability for its customers. Retraced, in turn, will receive the German firm’s support as it hones its ability to flag human rights risks in supply chains.
“International supply chains are complex and dynamic,” said Oliver Hein, chief operating officer at S.Oliver. “Therefore, it is important that all stakeholders within the textile industry and beyond work together to create the necessary transparency. We are aware that with greater transparency comes greater accountability. However, this is necessary in order to define targeted measures and ensure their effectiveness. Only in this way can we take a holistic view of social and environmental responsibility and continue to develop.”
Ghosh said that the playbook’s key takeaways are for companies to know what they want to achieve, to get everyone on board and, most of all, to get started.
“And do not be discouraged by the seeming enormity of the task,” he said. “The industry will lift together, we are already seeing a lot of collaboration around data and joint suppliers, but everyone everywhere needs to do their part to contribute to make this happen.”
