In a second blog post, Alvise Giustiniani lays down PMI’s view on tracking and tracing – a crucial element in beating criminal enterprises.
Complex supply chains are a necessity in our globalized world. We can now make and distribute goods using raw materials from all over the world. Products can begin their life in one country, take shape in another, and be finished in a third, then sold in a fourth. All enabled by a complex system of logistics and distribution.
The complex global nature of supply chains is also a weakness, as they are vulnerable to attack and abuse. Criminal enterprises can infiltrate the weakest point, and try to replace legitimate ingredients or finished products with fakes and counterfeits, at the expense of consumers, governments, distributors and manufacturers.
That’s why it is vital to have a system to preserve the integrity of supply chains. Our experience is that effective tracking and tracing systems are a great way to do this.
What is Tracking and Tracing
Tracking and tracing systems allow producers of goods and brand owners to follow the movement of products throughout the supply chain. Products using this system carry unique individual markings throughout their production and distribution, from the moment the product starts to be made. The system allows an inspector to know at what stage a given product is in the supply chain, where it has come from, and where it is due to go to next.
The effectiveness of a tracking and tracing system is based on ensuring two key points. First, making sure that the unique individual markings on products are extremely difficult to duplicate. Second, making sure that the tracking and tracing system is implemented and enforced worldwide.
How PMI can help
As a business, we have been at the forefront of innovations in tracking and tracing and they’ve had a real impact. In Europe for example, as we rolled out sophisticated tracking and tracing measures as part of our Cooperation Agreement with the EU, we saw a drop of around 85% in the volume of genuine PMI cigarettes seized by Member States between 2006 and 2014.. We’ve learned from experience, how important it is in particular to forge partnerships between public and private sectors at all levels.
Another important success factor is ensuring that tracking and tracing regimes are comprehensively enforced. The systems can only tackle illicit trade if they are applied across the industry and in different geographies, creating a level playing field where only legitimate, regulated, tax-paying businesses can operate.
5 things we think should be considered in the implementation of a successful tracking and tracing regime
Supporting a Global Solution
We support a global tracking and tracing regime. The network should allow for the collection and sharing of information. All manufacturers should be held to the same standards in securing their supply chains. The system should be proactive, and companies should be able to work together with law enforcement authorities to take efforts to reduce illicit trade.
We think that authorities should be responsible for establishing, controlling, and supervising the system. The private sector should look after the day to day integrity of our factories and the supply chain.
Any successful tracking and tracing system must be based on internationally recognized standards. This then encourages different suppliers to compete with each other and come up with new technologies to design better solutions. Innovation will be at the forefront. Technology evolves quickly. We need to stay ahead of the illicit traders.
The fight against illicit trade must be driven by effective legal frameworks. This means ensuring that all industries are implementing agreed tracking and tracing systems and processes. If an international tracking and tracing system is to be successful, it must be enforceable, and Parties must be confident in applying appropriate sanctions, in line with their national laws.
Build on experience
We are already using tracking and tracing technology on 70 million packs of cigarettes every day. We have real experience and expertise. We hope to provide practical insights into which technical requirements are feasible in a fast-paced manufacturing environment.
To learn about PMI's view on tracking and tracing, visit this link.
Written by Alvise Giustiniani