The Federal Government has backed a report calling for the rapid digitisation and standardisation of Australia’s supply chain tracking and verification system, ensuring product credentials can be swiftly verified and fraudulent or erroneous claims about products promptly detected.
The report, Digitalisation of Conformance and Accreditation Processes, commissioned by the Federal Government’s Department of Industry, Science, Energy and Resources and created by three chief standards and conformance bodies (NATA, JAS-ANZ and barcode provider GS1), calls on the Government to take the lead in creating a cohesive, digitalised system for product traceability.
The trio called for both the Australian Government and industry to simplify the management of product conformance information (including testing and certification), leveraging an “established system of global data standards”.
This includes those standards already in use by Australian industry and internationally “to identify, capture and share information through international supply chains” – most notably, ISO/IEC ratified standards for product conformance.
Australia, the report confirms, currently lacks a standardised framework for the digitalisation of conformance and accreditation processes – “including the necessary information architecture and common language to identify, capture and share data of relevance to national product conformance”, the report authors state.
Conformity assessments determine whether a product meets the requirements of a minimum standard, while traceability defines the ability to trace the provenance of an object.
“Defining a robust traceability system, addressing both physical products and product conformity information, represents an essential measure to ensure that Australia’s competitiveness and market access are maintained,” the report contends.
“Such a system must enable highly systematised data exchange between manufacturers, exporters, importers, distributors, retailers, consumers, and regulators.
“It must be underpinned by global data standards and exhibit interoperability across equivalent systems used by trading partners.”
Further, the standards trio has called for a “technology agonistic” product assessment framework aligned with global data standards that can accommodate different supporting technologies – for instance, blockchain, non-fungible tokens or verifiable credentials.
The NATA warned that, without a cohesive, government-led approach, proprietary solutions developed by individual industries, ones that only “address context-specific concerns”, will ultimately result in “a patchwork of incompatible systems”.
“Efforts to coordinate information exchange from several thousand certifiers, testing and inspection authorities will become chaotic and potentially intractable.”
“Without intervention, it is easily imaginable that the existing mosaic of systems and methods will proliferate (e.g. proprietary QR or other codes), each using different semantics and pointing users to different data sources such that conformity attestation becomes complex, costly, incompatible, or impossible.”
Assistant Minister for Industry Development Jonno Duniam stressed that transparency in product conformity information “is the foundation of trust and confidence in trade”.
“With increasingly global supply chains and channels to market, it is essential we support industry by ensuring Australia’s product conformity systems remain relevant,” Duniam said in a statement.
“We need to simplify trade systems to enable the rapid digital verification of product credentials and the detection of fraudulent or erroneous claims.”
Duniam also echoed the report’s push to ensure supply chains and product conformance information are linked. This, he said, could “help to address supply chain vulnerabilities and build resilience”.
“Improvements to trade systems will benefit Australian businesses and consumers through enhanced efficiency and traceability of traded goods,” Duniam added.
Rather than re-inventing the wheel, the report urged Government to embrace a product supply chain tracing framework based on existing global data standards used by industry, “to deliver international alignment, harmonisation and interoperability”.
“A nationally coordinated approach is required to address the risk above and close the gap between digital product traceability versus traceability of product conformity and credentialing information.”
“Data exchange standardisation for conformance and accreditation processes will assist in closing the gap between physical product and product conformity data flow, to support government and industry modernisation initiatives, by aligning Australia with the evolving supply chain traceability systems around the world.”
The standards trio has called for “a technology-neutral data standards framework, rather than a specific implementation.
The problem of conformity
Inability to track provenance is of particular concern in limiting the trade of counterfeit goods. The OECD and World Bank estimate that trade in counterfeit and pirated goods today represents between 3.3 per cent and 5 per cent of the value of world trade, a significant jump on previous years.
The report authors found a growing disconnect between digital product traceability and traceability of product conformity.
“Australia has a long-standing policy of accepting trusted international standards, where appropriate. Global standards and systems to support digital product traceability through supply chains are now well established in the form of global trade identification numbers and global location identification numbers.”
“In contrast, the systems for managing product conformity and credentialing information have not kept pace with digital transformation.
“This gap between digital product traceability versus traceability of product conformity and credentialing information is now a problem.”
This gap, the report contends, has become particularly stark for Business-to-Government (B2G) and Business-to-Business (B2B) exchange of product conformity data.
Click here to access the full report.