Traceability has always been a key need for those involved in trading, moving, and managing commodities of various types. However, given the increased awareness of environmental and social issues, its importance has increased and continues to increase through time. It is, or will be, a requirement to understand the carbon footprint of a transaction, to demonstrate that child labor was not involved in the production or movement of the goods, and so on. Traceability is therefore of growing interest to buyers of CTRM and related solutions who need to manage this additional requirement expertly and efficiently.
Gen10 is one provider of CTRM and Commodity Management software that sees traceability as a key requirement for its systems and I recently spoke with them about that. For Gen10, traceability is essentially a data management issue. “Traceability is the ability to track products from their origin to the end consumer,” they say. “For organisations in commodity supply chains, it means they must collate data from multiple suppliers and present it in a way that tells the story from its origins, through the supply chain, to their operations, and often then on to their buyer.” They recognize also that much of the data needed comes from partners and suppliers across the supply chain. This and other internally produced data then need to be made available to the people that need it within the organization.
Gen10 recommend an approach toward traceability that starts with a data audit to ensure that all the data that is required is identified, followed by verification and data validity checking. Again, this is essentially a data management process and includes paying attention to data formats and usage. They also recommend using API’s as a means to bring in the data from external and internal sources. Since traceability data varies by use case, system flexibility is essential as this “allows your organisation to respond to changing requirements without another large system implementation or large development project,” they say. “As sustainability data improves, it typically becomes more commodity-specific, meaning that one commodity trading firm may need to manage several related but distinct traceability processes. This means that any traceability software you use needs to be flexible enough to work with a range of different commodities each with their own unique workflows. It also needs the flexibility to adapt as industry standards and your own requirements evolve over time.”
Indeed, Gen10 see its approach to traceability as a differentiator for their platform and, since they have been working on their traceability product strategy for many years, it does appear to us as a key feature of their solution. It is also one that will become increasingly important to many in the commodity industry as they comply with increasing regulations around ESG, sustainability and so on. However, at the end of the day, traceability also has real business benefit to offer beyond compliance. “Ultimately, better traceability means better quality data. And this improved data has a wide-ranging impact on any business’ operations,” they say. “This leads to faster processing, fewer errors, and more effective operations, across the entire organisation, from creating contracts and sales documents to allocations, risk management, and reporting.”