From the Sector

TradeBeyond is hosting Global Sourcing Day 2024, an exclusive, invite-only conference bringing together top executives, thought leaders, and industry experts from the retail supply chain sector. This year’s event will focus on innovative strategies, sustainability, and technological advancements that are transforming retail sourcing.

WHEN: Nov. 12, 2024, 9 AM – 4 PM HKT
WHERE: Cordis Hotel, Hong Kong

Featured speakers include:

• Britton Russell, COO, MGF Sourcing
• Jeff Alpert, CEO, Pillar AI
• Aubree Evangelista, Global Product Manager Social, amfori
• Sophie You, RESET Carbon
• Rick Horwitch, Vice President of Strategy & Innovation, Bureau Veritas

Global Sourcing Day 2024 offers a unique opportunity for senior supply chain professionals to explore the future of sourcing and sustainability. Key topics include:

• AI and Digital Transformation: How artificial intelligence is reshaping sourcing operations.
• Sustainable Sourcing and Compliance: Adapting to evolving environmental regulations and standards.
• Traceability and Transparency: Elevating supply chain visibility to build trust and accountability.

This event provides critical insights for those aiming to navigate the challenges and seize the opportunities within global supply chains in 2025 and beyond.

TradeBeyond, a provider of supply chain solutions, has announced its latest AI-powered innovation, its PO Line Risk Rating. This toolset revolutionizes quality management and risk assessment by leveraging artificial intelligence to analyze thousands of historical data points, providing businesses with accuracy and efficiency in managing their supply chain’s quality risks.

Part of TradeBeyond’s Pivot88 platform, its PO Line Risk Rating functionality uses advanced machine learning algorithms to continuously improve risk assessments for quality failures. By employing predictive analytics to evaluate multiple risk factors such as product type, materials used, country of origin and many others, the system assigns a percentage risk score to each purchase order line, indicating the likelihood of quality issues or delays. This allows businesses to proactively identify and address high-risk PO lines.

This functionality provides critical insights and reporting on the most significant risk factors affecting each PO line. Risk ratings are displayed as part of users’ existing workflows, enabling better planning and prioritization of inspections and audits. Customizable risk thresholds allow quality managers to set their own parameters for risk levels, ensuring that resources are allocated effectively and strategically.

Multiple global regulations set to take effect in the coming years have made traceability an imperative for retailers and brands. These include the Digital Product Passport, the Corporate Sustainability Due Diligence Directive, and the New York Fashion Sustainability and Social Accountability Act, to name a few.

While companies are aware of the importance of traceability, research indicates that they are not prepared to comply with upcoming legislation. A recent KPMG survey highlighted that 43% of executives at major enterprises had no visibility or were “largely unclear” about the performance of their Tier 1 suppliers. At the same time, only 28% of companies had clear visibility into Tier 2 suppliers.

TradeBeyond’s recently published Supply Chain Traceability Guide, the latest installment of its Retail Sourcing Report series, highlights the myriad challenges that companies face in implementing effective traceability programs. This report is relevant for all industries, and is especially topical for the apparel and footwear sectors, which are under increasing scrutiny to enhance traceability to ensure sustainability.

The report highlights retail’s slow progress in achieving transparency, as evidenced by the Fashion Transparency Index, which found that the average transparency score across 250 of the world’s largest brands and retailers was just 23%. That suggests that progress on transparent disclosure of social and environmental data is still lagging.
 
The report shows that brands fall short on most key measures of sustainability and traceability, including publishing a responsible code of conduct and providing visibility into their Scope 3 carbon footprint. The United Nations Economics Commission found that only a third of the top one hundred global clothing companies track their own supply chains. One of the obstacles is complexity. More than two-thirds (69%) of fashion companies report that complexity of their global business networks is an obstacle to visibility.

In addition to a lack of visibility, false sustainability claims are also rampant. Greenpeace found that in the apparel and footwear sector, 39% of sustainability claims are false or deceptive. Lack of third-party verification of ESG measures is also rampant.

The highest scoring brands in the 2023 Fashion Transparency Index included luxury brands such as Gucci and retailers such Target Australia, Kmart Australia, OVS, and Benetton. These companies back up their commitment with solid action on multiple measures of traceability.

Along with legislative requirements, consumers are a key driving force pushing companies to improve their traceability initiatives. McKinsey research found that 66% of consumers consider transparency to be a key factor when making a purchase decision and 73% of consumers would pay more for products with transparency into production and sourcing.

The report also highlights key challenges to overcome in the journey to traceability, including effective communication between stakeholders, compliance with new regulations, technology barriers, and data complexity.

On the positive side, the industry is responding with sophisticated technology, including software systems that incorporate artificial intelligence and blockchain-enabled traceability, which provide the required visibility and compliance.

Traceable fiber technology, which allows for traceability from the material origin of a product until its end-life, provides the option of a “fiber-forward” rather than a “product backward” approach to achieving traceability.

Aside from the regulatory and consumer drivers, there is a strong business case for implementing traceability, which includes cost savings, operational efficiency, brand protection and reducing supply chain risk. As such, TradeBeyond expects a rapid evolution in traceability programs across industries, especially in those that lag in best-practices.

While there has been considerable progress in recent years toward accurately tracing the complete origins of products, much more needs to be done. Brands and retailers must intensify their efforts to stay compliant with escalating regulations and align with evolving consumer preferences.

TradeBeyond has announced an advancement in its traceability solution through the integration of artificial intelligence. This upgrade allows global brands and retailers to improve visibility and reduce risks in their supply chains.

TradeBeyond's latest platform enhancements incorporate artificial intelligence to automate documentary verification and document chain of custody. These improvements bolster efficiency, security, and reliability. Advanced AI verifies the authenticity and integrity of products, tracing their journey from raw materials to production and delivery in compliance with increasing ESG regulations and standards.

TradeBeyond’s enhanced traceability solution leverages AI to automatically scan all documents, including orders, invoices, bills of lading, and shipping advices. It compiles the chain of custody documentation and checks critical product and shipment documents against multiple databases of blacklisted entities for potential compliance risks. The AI also identifies gaps or missing documentation, alerting businesses and suppliers for resolution before shipping.

Recent global supply chain due diligence laws, including the Uyghur Forced Labor Prevention Act and others, have placed stringent requirements on brands and retailers to provide their goods' chain of custody. TradeBeyond’s AI simplifies compliance with these laws, while increasing the data accuracy, visibility, and transparency necessary for sustainable sourcing.