Traceability: What can Apparel Industry learn from Healthcare?

Tim Marsh — October 30, 2023

Earlier this Summer I was re-engaging with a number of healthcare stakeholders regarding traceability and their efforts to achieve compliance with the US DQSA. I’ve been working on product traceability for 20 years*. 10 years ago I and many others were at the pinnacle of talks and collaborating quite extensively with stakeholders across the pharma supply chain. We were actively discussing plans for compliance and sharing best practices. At about this time we were all heavily working on and pushing for a national level law to negate the negative impacts from divergent US state level laws. We were rewarded when the DQSA came November 2013. At the time I believed most companies would have little trouble complying by the November 2023 deadline for serialized product identifiers (enabling brand-to-retail pharmacy traceability).

I was wrong.

Proof? This year the US FDA announced a delay in enforcement by another 12 months. I didn’t see this coming**. Although many consultants and solution providers who are highly active in pharma were not surprised. Seems that all that talk years ago was indeed just talk for a critical portion of the pharma supply chain.

What does the delay really say about the state of the DQSA and industry compliance? In my view it is an acknowledgement that to enforce the law would mean a significant portion of lifesaving medicines would potentially be barred from trade. That is wholesalers, distributors and retailers would have to embargo non-compliant products. And that means you or someone you love might suffer as a result of lack of available medicine.

What does this have to do with Apparel and Fashion?

There’s a new kid in town in the world of traceability — the Apparel and Fashion industry. The good news is the apparel industry can avoid pharma’s mistakes and learn from its successes.

Why? Consumer demands, sustainability commitments and, you guessed it, regulations. The flavor of traceability is slightly different from healthcare and pharma. But in many ways what is developing is eerily similar. What we’re observing is not a call to traceability for consumer safety. Instead it’s a call for greater sustainability and a significant reduction in waste across the industry as a whole. This will require greater levels of transparency of product data in order for brands to reduce their carbon footprints and demonstrate compliance with regulations. The demands being placed on apparel brands by consumers and regulators is several times more challenging than traceability for pharma. It will certainly require the apparel industry to build in traceability capabilities. However pharma never had to enable granular raw materials traceability upstream from source — pharma had it easy. Don’t believe me ? message me 2 marsavius@gmail.com, I’ll gladly explain.

The similarities to how traceability in pharma evolved are kind of spooky. Today we have EPR laws popping up at state level (US and EU member States) — all of them slightly different in scope and impacts. This was exactly the challenge pharma faced in the early 2000’s with US states and some countries proposing and enacting divergent traceability schemes. Now we have different regulations taking hold in regions like Europe that will have significant impact on global supply chains. For example the EU Ecodesign for Sustainable Products (Digital Product Passport), which is analogous to the EU Falsified Medicine's Directive (FMD) of 2011.

And in the very early days the Pharma industry was struggling to find expertise in product traceability and supply chain visibility. We were lucky to already have some of it. But in reality we had to build up this expertise and learn together with our solution providers and external stakeholders. Prior to 2003 I knew what traceability was but I had never implemented the capability. By the end of 2005 myself and many others at Pfizer were building our expertise.

Given the similarities, what can the apparel and fashion industry learn from the pharmaceutical industry?

I’ll be intentionally brief, (noting that where there is interest in digging into details on the “how” of traceability for apparel just reach out to me at marsavius@gmail.com).

I know you’ll find the following observations and recommendations valuable.

It’s in investment, not just the cost of compliance: First and foremost I recommend you view the necessary improvements in supply chain capabilities from traceability as an investment. Yes compliance will perhaps have greater influence over your company’s leaders to take action now. But from my experience traceability capabilities can result in what I call “value beyond compliance.” I am optimistic about this for the Apparel industry as I see many more examples, independent of regulations, of companies investing in traceability and transparency to unlock value, reduce waste and lower carbon footprints.

Regulators don’t have to delay: Unlike the pharma industry don’t expect regulators to provide delays in discretionary enforcement for apparel and fashion. This is especially true for Europe in my experience — the regulators provide what they believe are workable timelines for industry and they stick to them.

Seek to influence for harmonization: We did this in pharma and I recommend it for apparel as a worthwhile tactic to help reduce supply chain complexity. Expend your external influencing to encouraging EU Member States to adapt in harmony the original intent of the EU-level regulation. In the US, encourage and influence at the federal level for a national EPR regulation that provides a common approach. Regulations that diverge in their requirements introduce supply chain complexity and cost…sometimes with little to no additional value for you or consumers.

Seek interoperability: Interoperability is the ability of systems to speak with one another using a common language. We did this with much success in pharma and I highly recommend it for industries like Apparel. You want interoperable communications of product status and movement and of product master data (transparency data) to reduce complexity and give you greater freedom of choice across your upstream ecosystems. In pharma we did this by investing our time in development of global standards, mainly through GS1. Apparel is already on track with what I see from Textile Exchange, HIGG and Sustainable Apparel Coalition. There are gaps however in Apparel standards that enable a common approach for traceability and product transparency data sharing.

But it’s a bigger job than just supporting standards. You also have to get really smart with your trading partners and solution providers. They will work against you to keep in place non-standardized methods of capturing and sharing product and traceability data. Those tendencies will not support interoperability and they erode your ability to change from existing providers.

Be mindful of the time value of money: Across Pharma in the US several large brands and countless small players sought to avoid their spend in traceability for compliance. Or they phased their approaches, building in one set of capabilities early, then building in a second set of capabilities later. I rallied against this approach for Pfizer stating it would not only be unnecessarily disruptive to our operations, but also much more costly. Whether you delay the spend or phase your capabilities, know it will cost you more in the end. Make sure leadership is informed about the impact timing has on the costs and what value you can derive today vs. the future if you’re phasing in levels of capabilities.

Pounce on available resources and expertise: The availability of expertise and solutions providers to fill key roles is a finite resource. By my estimate there are less than 50 traceability experts (with 10+ years) active in apparel industry across US and EU markets. The number is likely far smaller, so I’m being generous. Furthermore, solution providers will be happy to scale to meet industry demands for traceability capabilities. But know that they will be pulling from the same human resource base of traceability experts as you. Sometimes the best way to win the war on talent is to strike early.

Traceability is sector agnostic: Traceability experience and skills are transferable. Any practitioner worth his or her salt follows a fundamental heuristic for how to accomplish traceability across an entire value chain. It doesn’t matter what the value chain is — it’s always the same heuristic, framework or methodology.

I hope you’re encouraged.

The sector-agnostic aspect of traceability and product data transparency capabilities is perhaps where I am most optimistic for apparel. There are traceability experts across pharma (and perhaps fresh foods) who would be happy to pivot to supporting the apparel and fashion industry. There is a ground swell of brands supporting standards development to enable interoperability. Regulators will be regulators, but in my experience most are interested in enacting laws that incentivize companies to realize better sustainability outcomes. And, there is a growing and capable solution provider community, who I hope will differentiate on product features and less so on means of sharing product ID and master data.

Thanks for reading.

What do you think?

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*My journey into the world of traceability started Q4 of 2003 when we made the momentous decision to deploy serialized RFID tags on all Viagra sold in the US market before the end of 2005. We were successful and in 2006 I was named co-lead for the Pfizer Celebrex RFID program representing Global Operations and Supply Chain.

**I’m also not surprised. Regulations have a way of subliminally affecting top management with a belief that with enough influence and lobbying they can change the law to their favor, or kill it eventually. In that environment the thinking goes, “let’s delay this spend for as long as possible because we might not need it anyway.” Will you make that gamble?