Supply chain traceability software traces a product, such as coffee, cocoa or rubber, back through every company that handled it to the farm where it was grown. Its main use today is to prove to regulators that no forest was cleared to grow the crop. It applies the idea of track and trace to raw materials.
The main reason is a European Union rule on deforestation-free products. It covers coffee, cocoa, rubber, palm oil, soya, cattle and wood, and goods made from them, such as chocolate and leather. A company that sells these goods in the European Union must show that they were not grown on land that was still forest after 31 December 2020. To show it, the company must give the exact location of every plot of land on which the crop was grown. Indian exporters of coffee, rubber and leather sell to Europe, so the rule affects them.
The hard part is the chain. Coffee passes from a farmer to a collector, then to a curing works that dries and hulls the beans, and then to an exporter, who mixes beans from many farms in one shipment. The software follows every batch through these steps. Each farm is mapped as a plot, often with a phone app that records its boundary by GPS. Each time beans change hands, the software records the batch with its weight and the farms it came from. It then checks each plot against satellite maps of forest cover, through satellite imagery analytics.
For instance, consider a coffee exporter in Chikkamagaluru that buys from 340 smallholder farms. It plans to ship 19 tonnes to a roaster in Germany. Its field staff have mapped every farm with a phone. The software shows that the 19 tonnes came from 112 of these farms. It compares their plots with forest maps from the end of 2020 to today. Two plots show forest that was cleared in 2022. So the exporter keeps the beans from those two farms out of the shipment, and replaces them with beans from farms that pass the check. The software then prepares the due diligence statement, the declaration that the roaster files with the European authorities, with the location of every plot.
The same records serve other uses. A food company uses them to find the source of a contaminated batch, as food traceability does. A company that measures its emissions uses the farm data in its carbon accounting software. And the shipment records can be matched with global trade data, the records of who shipped what to whom.
Traceability is different from supply chain visibility. Visibility asks where the shipment is now. Traceability asks where each item in it came from.