There are growing environmental challenges and stakeholders in different sectors of the economy across the world are increasingly aware of the environment. This awareness has extended to social issues faced around the world. Industrial farms within agricultural supply chains are concerned about these issues – they have to address the aforementioned issues within their operations to gain a competitive market advantage.
As mentioned earlier in one of my previous articles, one way to tackle environmental and social issues in the agricultural supply chains sector is through the use of traceability practices. In a United Nations Global Compact and BSR report, traceability is defined as “The ability to trace and identify the history, distribution, location, and application of products, parts, and materials; to ensure the reliability of sustainability claims in the areas of human rights, labour (including health and safety), the environment and anti-corruption.”
Having observed that traceability is about tracing and identifying the origin of a product as well as that of its constituents and where they are sent to. It is worth knowing what the benefits and barriers to traceability are on industrial farms. These will be highlighted in this article.
Some benefits of applying traceability practices in industrial farms can be linked to stakeholder confidence and early fault detection as well as compliance obligations.
Stakeholder Confidence: The use of traceability practices in industrial farms can help boost the confidence of stakeholders. For example, customers who are able to verify the safety of food products are more likely to have a renewed interest in the company and its products, leading to more commercial gains for the company.
Early Fault Detection: Considering the growing trends of sustainability standards across industries, industrial farms that use traceability practices are able to pinpoint faults or errors in their sustainability systems, thereby helping them to implement corrective actions at a very early stage.
Compliance Obligations: As stated earlier, there is an increasing growth in the use of sustainability standards across industries and companies are required to demonstrate compliance with these (standards). The application of traceability practices in industrial farms can contribute towards the achievement of compliance obligations.
Whilst the use of traceability practices has obvious benefits to industrial farms, it is imperative to note that there are barriers to the implementation of these practices in companies. The barriers to the use of traceability practices in industrial farms are linked to the complex structure of agricultural supply chains and technical know-how issues. These are two barriers to the use of traceability practices in industrial farms.
Complex Supply Chain: For traceability to be applied successfully, industrial farms operating within agricultural supply chains need to be able to sync and share vital sustainability information with each other in a timely manner. The sharing of information between players in agricultural supply chains is not an easy task due to the fact that they have widespread activities across countries around the globe.
Technical Know-how: Just like any new innovation or concept, its successful implementation will rely on readily available technical expertise in the subject area. The lack of technical knowledge on the part of companies as to what needs to be tracked, documented and managed can hinder the implementation of traceability practices in industrial farms.