So, hello everyone. I'm Aaron. I am the Director of Product Compliance in Puma.
I am responsible for the chemical safety and also traceability functions in the Puma organization.
In case you don't know what Puma does, Puma is a sporting goods company which sells textile, footwear and also sports equipment all over the world.
So, today I would like to, it's my pleasure to have this presentation on how Puma do our own traceability functions and program in the company.
So, a little bit history Puma started working formally on traceability program like a few years ago.
So, the first thing for us is to define what traceability means for Puma.
As the first step, we set up a traceability framework.
So, we have few steps and we define very clearly what do we want to achieve from this traceability exercise.
So, of course, to us traceability is all about the supply chain and then it's also about the products we're putting on the markets.
So, we are collecting different information like supplier detail, informations and also the data on the products.
So, on the traceability work, it's also very important to link supplier data, product data together to the products we are putting on the market.
So, this is what we call the chain of custody, how the information flows from upstream to downstream and at the end of the day it's going to the consumer end.
And then also we think about what information we need to be collected.
So, start with what is the information to be traced, which part needs to be involved, where the process are taken and when do we have this process.
Occurred and when we collect this information and why this process is taking places and any other information we also collect as a pool of data.
So, this is the second step. So, when we first we identified the supply chain, secondly, we start building relationship between materials, chemicals, products with the production and the final products.
And then the first step is all about the verification of validation because we would like to report accurate data. We don't want inaccurate information or trash information because this is the most important thing.
If we do this exercise, we have to make sure the data are accurate.
And then the fourth step is to how to use the data, like information sharing.
For example, sharing the information to our customer, sharing the information to our partners.
Also, we can use this information for our internal analysis.
So, this is the whole relative framework and the process step in Puma.
Then, once we have the framework, then we think about what's how the information flows.
So, this is a simple illustration diagram for textile supply chain.
So, we upstream, we call it upstream is is when the products is still in manufacturing downstream other position or player, which when the products are right to the market.
So, for the upstream, which is the supply chain is start from the raw material.
For example, cotton, it will be farmed.
And then for synthetic fibers, it will be like polyester, it will be chemicals.
Then the material from farm to bell and then to yarn to fabric to garment, which are different manufacturing steps.
And normally each into each steps of the process would have different suppliers, different players.
And then when we talk about traceability is how these information flows from upstream and going through the downstream direction.
And then when it's when the product is made ship to the market, then we will pass this information to like the retail shop consumers.
And then also a digital in the digital format, then we collect everything and share this to the downstream users.
And when we talk about the circular economy, there also will be some end of life player like recycler waste collectors.
So they may also leave this information.
Then if it's going into recycling stream, it will go back to the upstream.
So the raw material of the chips or the yarn.
So this is a simple diagram to demonstrate how the info information flows along the supply chain and together with the market.
But in the real world, normally is much more complex than a linear flow.
So in the real world, in the real supply chain, usually many more players are involved.
So here is not unlike the last diagram, which is in the linear model, it's more like a mesh.
So you have few or much more suppliers supplying different materials to different companies and then they will converge to in each tier and then go to the final product manufacturer.
So you can imagine if you have multiple product manufacturer, the supply chain could be much more complex.
And it also important to understand that the information is not always going one direction.
You can expect the information is a dynamic interaction between upstream and downstream.
So which means that you will need the information flow to be dynamic.
So the suppliers can understand what is the downstream user needs and then they fit into correct information.
So after we know how the information flows, then we talk about what data is required.
So in traceability, normally we are talking about three types of data.
One is the input.
So what do you input into the production?
So for example, chemicals, what last number of chemicals, how much chemicals you put in, when do you put in these chemicals?
And then who is selling this chemical to you?
Do you have the invoice or transaction documents and also the information of the chemicals?
Then you also input the chemicals and then when do you start the production?
When how much you produce and then what is the production loss number and then what is the output quantity?
And then you also collect the output data like the production loss, output quantity, output dates.
And then when you sell to the next tier, what is the invoice number of the output?
So you repeat and collect all this information from each processor of the supply chain.
So these are the data required.
And then as I mentioned in the traceability framework, actually we are not only collecting the data.
We also need to put a linkage between data.
So for example, the supplier data needs to be linked with the process data, then the product data, finally the purchase order data.
When you link all these up, then you will have a full visibility of the products.
So this is the ideal state of the traceability program and then how all the data you need to collect from it.
So you can imagine with all these data points and then also the complexity of supply chain.
It will be super complicated if you do it in real action.
So take Puma as an example, we have hundreds of suppliers.
And then we are selling like over thousands of products.
So if you collect data in that scale, you can no longer do it manually.
You will need different type of support and resources.
So it is also important to understand how we put focus on the resources and develop the programs to by step.
So in the beginning of the Puma journey, we first developed the process internally.
So we formulate and define the goals and the objective what we are trying to achieve by this traceability program or exercise.
And then we give up the standardized procedures.
So everyone is easier for everyone to communicate to our stakeholders.
What are we trying to do and what are we trying to achieve with this traceability programs?
And then we think about the tools.
What tools we need to achieve this goal?
Of course, we also need to define the key priorities.
So in the beginning, we do not go right at the chemicals.
So we start with the material first, which is relatively easier and less granular.
So it's also important to have this to build the mindset of the suppliers because for the suppliers is also new to them.
It's a new topic or new requirement for them.
So they also need to build the knowledge around them.
And then the second step, you also need to understand your supply chain.
As I mentioned, supply chain is not linear.
They are complex.
So you will have easily like four or five tiers of suppliers and you will involve any dyeing or chemical process.
They could be more than that.
They also have some contractor agents in direct suppliers.
So you need to create a supply chain map and then identify these suppliers.
If you are doing chemical traceability, you need to identify suppliers with the chemical process.
So you have to be very clear what players are involved in your supply chain.
And then because there are so many players in it to start with, you also need to prioritize which suppliers you need to focus on.
For example, you focus on supplier, which are key to your business providing the major volume of your business.
Then you may start with them because you will have more negotiation power with them.
Then after you finish the first priority, you roll out gradually to the smaller suppliers.
Also, you need to identify the information required.
It goes back to the objective of the whole traceability program you set up.
So for example, in chemical traceability, you will need the chemical inventory list.
So what chemicals are used on your products and then the safety data sheets of these chemicals.
So you can know about what substances or chemicals are involved in the production.
And then you will need the process information. What are these chemicals used for?
What are these chemicals used? In which process it is used?
And then you may need to collect input production and output data.
So to record what chemicals are in and out on your product.
And then communication will be the key.
I would say this is the most important step because the previous step you have your program in mind.
You will want to do something, but it's also important to tell your stakeholders or suppliers to understand what you are trying to do.
A few things you will need to communicate with your suppliers.
First is the information you need and then to check their readiness.
Because as I mentioned, traceability program is not a simple task. It is very complex.
Your supplier will also need to be ready. So taking a simple example.
If the supplier does not have the information you need or they do not have a clear record of the information you need.
Then they cannot provide you anything even if you have the best platform in the world.
So everything has to start with your supplier readiness. How ready are your upstream suppliers?
If they have missing information or any challenges to achieve the goal, then you have to provide as much as support you can.
So like training, like where you can get this information.
Do you need, for example, in Puma cases, do you need Puma support to talk to your upstream suppliers?
So these are the communication you will need to overcome the challenges.
And then also the resources they need to put in to achieve the goal.
So traceability is a new topic, a new activity.
Definitely it will need manpower resources or even digital tools to achieve the goal.
So these are the things you need to plan ahead and then communicate with your stakeholders to make sure they align and onboard to your program.
And then lastly, it will be verification and validation.
As I mentioned, data accuracy integrity are the most crucial part of the program.
Because if you collect inaccurate information, you will be reporting inaccurate information and it will also affect your decision.
So you need to have some diligence program to monitor the data accuracy.
Normally we call it trust by verify.
So we trust the supplier providing the accurate information to us, but we also need to verify randomly by random checks or check to make sure they are actually making no mistakes on the data.
So it can be a desktop review, maybe an onsite visit to the factory.
And also some diligence spot check.
So there are many ways you can think about to verify and validate the data you collected.
In a summary, I would put a traceability program into, I mean, few factors to make a success.
So first of all, you need to know your supply chain.
So start with your supply chain map and then production and transaction data.
And then the second is to know your product.
So you need to understand what manufacturing process to make this product, what are the materials used, what are the chemical used, and how do you substantiate this information.
And then thirdly is to pass the information.
You need to have the capability to pass all these information you collected to downstream.
And then you may use some platform digital tools to help you.
But of course this will need additional resources, no matter it's a manpower or digital platform.
And I think the most crucial one will be to communicate and get the feedback from the suppliers so everyone can align on the same page on this exercise.