Industry’s Traceability: Insights on Drivers, Barriers & Future Investments

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October 8th, 2025
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11:40 AM

Uncover the gap between intention and action in global supply chains as industry executives grapple with traceability challenges. Explore key drivers like brand reputation and consumer demand, alongside barriers such as cost and regulatory uncertainty. Enhance your understanding of future investments in traceability to align with evolving legislation and consumer expectations.

With only 44 percent of industry executives actively tracing goods despite 63 percent recognizing traceability as a strategic advantage, a significant gap exists between intention and action in the global supply chain. Key drivers such as protecting brand reputation, regulatory pressures, and consumer demand for transparency are propelling traceability investments. However, challenges like cost, supply chain complexity, and regulatory uncertainty are stalling progress. As companies navigate evolving legislation and consumer expectations, the divide between intent and investment underscores the urgency for enhanced traceability measures.

Intention vs. Action Discrepancy

Despite the clear recognition of traceability as a strategic advantage by 63% of industry executives, only 44% are actively tracing goods, highlighting a significant gap between intent and action in the global supply chain. This discrepancy underscores the challenges faced by companies in translating their intentions into concrete measures to enhance traceability. Companies like Oritain emphasize the importance of timely implementation, as delaying traceability efforts can significantly increase risks associated with non-compliance and unethical practices. The urgency for bridging this divide is further emphasized by the fact that regulatory pressures and consumer demand for transparency are driving the need for enhanced traceability measures across industries.

The survey results also reveal a verification gap, with only 44% of respondents consistently confirming the traceability data provided by their suppliers. This lack of verification poses a significant challenge in ensuring the accuracy and reliability of traceability information within global supply chains. Companies like Untuckit stress the importance of following up supply chain mapping with audits to ensure the authenticity of traceability data and to mitigate risks associated with forced labor. As companies navigate complex supply chains and evolving regulatory landscapes, addressing this verification gap becomes crucial in enhancing transparency and accountability in sourcing practices.

Key Drivers Propelling Traceability Investments

Protecting brand reputation emerged as a top driver for traceability investments, with 40% of respondents highlighting its significance. Companies recognize that maintaining a positive brand image is closely linked to transparent and ethical sourcing practices. Legislation such as the Uyghur Forced Labor Prevention Act (UFLPA) has further accelerated the need for traceability, making it a business necessity rather than a mere compliance requirement. Grey Matter Concepts emphasizes that traceability is not just a differentiator but an essential component in building consumer trust and loyalty, particularly in an environment where sustainability is increasingly valued by stakeholders.

Consumer demand for transparency and expected regulatory pressures are also key factors propelling traceability investments. With the rise of conscious consumerism and heightened scrutiny on supply chain practices, companies are under pressure to disclose detailed product information and ensure ethical sourcing practices. The upcoming EU legislation mandating digital product passports underscores the growing importance of traceability in meeting evolving consumer expectations and regulatory requirements. Companies that proactively invest in traceability measures stand to gain a competitive edge by aligning with consumer preferences and regulatory standards.

Challenges and Barriers to Traceability Implementation

While the benefits of traceability are evident, companies face several challenges in implementing robust traceability measures. Cost, supply chain complexity, and a lack of expertise or capacity are identified as the top barriers hindering traceability efforts. Grey Matter Concepts highlights the sound business case for traceability but acknowledges the cost implications, especially in an environment where sustainability initiatives are perceived as expensive. The need for management buy-in and strategic alignment is crucial in overcoming these challenges and integrating traceability as a fundamental aspect of business strategy.

Regulatory uncertainty also poses a significant obstacle to traceability implementation, with roughly a quarter of executives citing it as a barrier. As regulations like the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) become more stringent, companies are under pressure to enhance their visibility into supply chains. Addressing these challenges requires a proactive approach towards investing in traceability technologies and expertise to navigate the evolving regulatory landscape effectively.

Conclusion

The discrepancy between intention and action in global supply chains underscores the urgent need for companies to bridge the gap and enhance traceability measures. As Oritain and Untuckit emphasize the importance of timely implementation and verification, protecting brand reputation, meeting consumer demand for transparency, and navigating regulatory pressures are crucial drivers propelling traceability investments. Despite challenges like cost and regulatory uncertainty highlighted by Grey Matter Concepts, investing in traceability technologies and expertise is imperative for businesses to align with evolving legislation and consumer expectations. The path to sustainable and ethical sourcing practices hinges on closing the intention-action divide and embracing traceability as a strategic imperative for building trust, loyalty, and resilience in supply chains.