By Dave Sweet, president, MECCO
Editor's Note: This article is adapted from a white paper, "Smarter Factories Use Traceability: Achieving the Benefits of Data with Direct Part Marking." Download the full white paper, which explores modern track-and-trace requirements; explains how to navigate perceived roadblocks such as cost, cybersecurity concerns and ROI and highlights common solutions for implementing end-to-end traceability; provides a step-by-step guide to making the transition; explains how to construct a scalable traceability system; and more.
Welcome to the age of the smart industrial plant. This is where operations technology (OT) and IT converge; digital technology connects people, processes and things into a single, seamless unified infrastructure; and data helps us identify new, exciting opportunities. While more manufacturing companies are adopting new data-enabling technologies, becoming a true smart manufacturing operation requires one essential element: end-to-end traceability.
With a traceability infrastructure in place, you can gather insight-rich data that helps you achieve better efficiency and profitability, both within your plant operations and throughout the entire supply chain.
However, most manufacturers aren’t capitalizing on this data. In a recent study of manufacturing companies, LNS Research found that only 23% had end-to-end traceability processes and software in place. So, let’s look at why smart plants need modern track-and-trace capabilities.
Why End-to-End Traceability?
Manufacturers big and small are facing mounting challenges. For example, product recalls are on the rise. Stout’s 2017 Automotive Warranty and Recall Report uncovered that U.S.-based automotive OEMs and suppliers paid accruals of more than $10 billion because of the 50 million warranty and recall incidents.
Also, counterfeit and diverted goods costs companies $500 billion in U.S. trade, according to the World Customs Organization. And at the same time, organizations are struggling to continually improve operational efficiencies to stay profitable and competitive.
Without complete end-to-end traceability, it can be tough to stay ahead of the competition, meet deadlines, keep customers happy and comply with regulations.
As an essential part of Industry 4.0, complete traceability still ranks among the technologies industry companies are slow to adopt. However, the trend is pushing toward more companies embracing it.
In a study of manufacturing companies, LNS Research found that while only 23% had the processes and software in place to enable end-to-end traceability, around 60% stated they plan to have these processes and software in the next year. This suggests manufacturers recognize the importance of product traceability.