Traceability in logistics. Why is it important?

Traceability in logistics is like having a radar of the product and it has to do with customers since they are the ones who drive it the most. Knowing where a product is in the shipment ensures that traceability will be greater about tracking orders until they reach customers.

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The concept of traceability in logistics refers to the possibility of identifying the origin and the different stages through which a product passes throughout the supply chain, including the last logistics mile, when the product is already sent to the customer.

In other words, a traceability system integrates a series of actions that allow knowing the location of a product within the supply chain, tracking its route, in such a way that the path to be traced with the product can be anticipated before it arrives at the recipient.

The proposal for this article is to highlight the importance of traceability in logistics, its main characteristics, benefits, and the impact it has generated since the rise of electronic commerce since the pandemic.

Importance of traceability in logistics

Traceability is increasingly important since technology is showing us that we can have easy access to information, so the more knowledge we have about something, in particular, the more security and control we will have over it. In this sense, a product is traceable when, no matter what logistics process it goes through, you never lose sight of it.

Knowing how to detect the path of a product is important, but imagine detecting the path of the thousands that you have to distribute. It is not easy to reach that level of traceability without having to incorporate a capillarity system into the product load.

Capillarity is the reduction of cargo volume in a few packages inside the truck, and these are dispatched one by one to customers. In other words, it is the last link in the supply chain. It implies placing the product at the endpoint, even bringing it closer to the shops. This system speeds up the delivery process, reduces the costs of long distances, and increases traceability.

According to the experience of Rodrigo Sánchez, owner of a Cordovan logistics company, "20 years ago traceability was different and difficult to measure". When they had an order, it was entered into the logistics transport service and they usually spent the night traveling.

While the recipient of the package slept, the carriers traveled with the shipment. When customers usually woke up and started the day by opening their store, first thing in the morning it was more than likely that they would have the package in their possession. "The level of anxiety at that time was low to zero," recalls Rodrigo.

Perhaps some other customer could communicate with the operators to confirm that their next order was already arriving. Now, based on permanent connectivity, people are interested in knowing the real journey that their package is making during the night.

Even though you can't pick up your package in the middle of the morning and in the middle of a trip, you need to know where your order is, either out of sheer anxiety, because you have to organize your day, plan your stay at home when shipment arrives, or to pick it up at the nearest branch.

In this context and as time progressed, a constant need for information began to become evident to organize the day with greater precision.

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Traceability as a competitive advantage

The real-time information provided by logistics is very useful for logisticians, since when they began to handle such a large volume of packages per day that must be distributed in different directions, suddenly having the technology to know the path traced by these packages meant an enormous competitive advantage.

However, it is the customer who needs the information the most. In times of pandemic, logistics services have incorporated new customers. It is no longer "business customers", that is, supplier-customers who sent the packages to a sales center with which they had commercial relations.

Today, thanks to services such as the marketplace, new types of customers are entering to consume logistics. Before, customers did not have precise knowledge about how logistics worked. For example, final consumers had a package in the morning requiring it to be delivered to Buenos Aires, and they came to think that the same package would be in the city in the afternoon.

Not even with an air service do you have a service of these characteristics, because the times required by the air logistics operation were not enough for that package to arrive in the afternoon. In addition, the costs of loading a truck incompletely to Buenos Aires are very high.

But based on online activity, and the presence of marketplaces and offers, today's customer is more informed. At the same time, logistics agents can not only provide this information by revealing the product's timeline to customers, but customers have every right to even request that said timeline be reduced for their benefit.

The competitive advantage of any marketplace is that it delivers the product within 24 hours, which is a standard. While 5 or 6 years ago it implied a differential for the logistics companies of that time.

Advantages of traceability in logistics

Achieving a traceability system means establishing a direct correspondence between the physical flow of goods and the flow of information linked to it. For this reason, traceability provides several benefits, among which the following stand out:

1. It increases productivity in companies.

It helps identify critical points throughout the supply chain to mitigate incidents and increase productivity. This makes it possible to solve problems related to poor handling of products, increasing the quality of delivery to the customer.

2. It improves consumer confidence.

As customers know enough and fairly accurate information about the delivery time of a product, where it is, and how long it will take to reach their hands, confidence in the logistics service is greater, which will enable future customer repurchases. 

With the great adherence to e-commerce, the traceability of merchandise has come to occupy a privileged position, since it reduces the uncertainty regarding the shipment of the product that many online consumers suffer from having to wait for the delivery of the product instead of going for it or withdraw it as soon as they make the purchase.

There are other important benefits of traceability:

• Improvement in the stock management of a company.
• Control by the batch of products.
• Quick detection of incidents that can cause failures during shipment.
• Immediate withdrawal from circulation of products that present any fault.
• Optimization of production and logistics processes, based on immediately available information.

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Finally, traceability in logistics, more than a continuous improvement system in the supply chain, is an essential tool to guarantee better monitoring and control of products for delivery to the customer. It provides greater visibility to logistics operators in processes such as inventory management, quality control, and product travel route; while for customers it reduces anxiety by building confidence about the status of an order before they receive it.