Understanding the full environmental impact of a supply chain is a serious task that requires continuous work. The language we use is important for clear and effective communication, so here we will explain all the terms you need to confidently talk about supply chain traceability.
Aftermarket: A market for parts and accessories used in the repair or enhancement of a product. A secondary market created after the original market sales are finished.
Batch (aka lot): Individual products are often produced simultaneously in a process (as a batch) rather than individually. A batch number helps a manufacturer identify when, where and how a set of products were produced.
Certificate: A document certifying that one has fulfilled the requirements of and may practice in a field.
Certificate of scope: Companies that have demonstrated the ability to comply with the relevant standard requirements by an approved certification body (CB) will be issued a scope certificate (SC). The SC means that the company is eligible to process the certified products on their list. This does not automatically mean the product you are ordering is certified unless there is a transaction certificate (TC) to accompany it.
Certificate of transaction: Transaction Certificate (TC) is a document issued by the Certification Body that verifies the goods being shipped (or delivered) from one organisation to the next conform to a given standard.
Certificate of origin (aka declaration of origin): A document widely used in international trade transactions which attests that the product listed therein has met certain criteria to be considered as originating in a particular country.
Chain of custody: This is the sequence of ownership as a product moves through a supply chain. The precision that material is tracked through a supply chain is defined by various different chain of custody models, such as certificate trading, identity preservation, mass balance, and certification.
Chain of custody - inputs: Material or product that enters an organisation or part of an organisation.
Chain of custody - outputs: Material or product that leaves an organisation or part of an organisation.
Chain of custody - process: A set of interrelated or interacting activities that use inputs to deliver an intended output.
Chain of custody - certificate trading model: Sustainability credits are assigned for a proportion of material at the beginning of a supply chain, but certified and non-certified products then flow together through the process without distinct traceability.
Chain of custody - identity preservation model: The identity preservation model ensures that certified products are kept separate from other sources. It allows a batch of certified products to be uniquely traced through the production process from a production site to the last point of transformation or labelling of a product.
Chain of custody - mass balance model: A chain of custody model in which materials or products with a set of specified characteristics are mixed according to certain criteria with materials or products without that set of characteristics. This results in an output with a known proportion of product that has the specified characteristics.
Chain of custody - segregation model: A ‘soft identity preservation model’ which ensures certified material is kept separate from non-certified material, but allows mixing of different batches of material with the same certification.
Chain of custody - site: Location with geographical boundaries at which defined activities under the control of an organisation are carried out.
Circular business models: Circular businesses are deeply involved in the product usage phase. Instead of selling physical products, they generate revenue by providing services. This often means rethinking traditional producer-consumer relationships, value creation activities, and value chain structure. Environmental and social impact benefits then complement the overall business culture and philosophy.
Circular economy: Opposed to a linear economy where materials are extracted, used and disposed of, a circular economy keeps materials in continuous use. These loops reduce process inefficiency and prevent material leaving systems in the form of waste or pollution.
Corporate social responsibility (CSR): The commitment of firms to incorporate environmental, social, and governance responsibilities into their businesses and supply chains.
Disclosure: The sharing of information by a corporation that informs its stakeholders about its actions in order to enable equal access to facts about the company. This might take the shape of press releases, sustainability reports, or other media.
Circular economy: Opposed to a linear economy where materials are extracted, used and disposed of, a circular economy keeps materials in continuous use. These loops reduce process inefficiency and prevent material leaving systems in the form of waste or pollution.
Data synchronisation: Maintaining a uniform record of information across a range of applications, devices and/ or servers.
Digital transformation: The term used to describe the adoption of digital technologies to improve existing efficiencies and outputs of current workflows, production processes, and communications in any organisation. This is often by replacing legacy non-digital methods.
Digital product passport (DPP): A virtual record associated with an individual product, often providing information about the product's origins and environmental impact. These are designed to inform consumers about the wider impact of their purchasing decisions and also make it easier for materials to be repurposed once a product reaches the end of its life.
End-of-Life (EoL) processing: In the context of manufacturing and product life cycles, this is the final stage of a product's existence. EoL processing involves the reuse, repurposing, or recycling of the components in a product.
Greenwashing: Companies misleading consumers about their environmental impact or benefits. This can be done to directly mislead or inadvertently by not having accurate information or simply receiving incorrect information.
ISO 14001: A set of environmental management standards that exist to assist enterprises in minimising the negative effects of their activities on the environment, complying with applicable laws, regulations, environmental-focused obligations, and continuous improvement.
Life cycle assessment (LCA): Compilation and evaluation of the inputs, outputs, and the potential environmental impacts of a product throughout its life cycle.
Materiality assessment: A type of stakeholder engagement designed to obtain insight into the relevance of specific environmental, social and governance ESG problems. The knowledge is most typically used to guide sustainability reporting and communication initiatives, but it is also useful in strategic planning, operational management, and capital investment choices.
Procurement: The process of purchasing goods or services and is usually in reference to business spending.
Purchase order: The Purchase Order is a formal request of goods by buyer to seller.
Regulatory due diligence: A comprehensive assessment of compliance with existing regulation related to social and environmental concerns.
Reporting: The collection and presentation of information about practices to a reporting organisation which ensures compliance.
Responsible sourcing: The implementation of ethical, environmental, and socially conscious concepts into sourcing, procurement, and overall supply chain management procedures. This method assures that a buyer's and its suppliers' business is handled in a way that does not have a detrimental impact on society or the environment.
Scope 1 emissions: Direct emissions from owned or controlled sources.
Scope 2 emissions: Indirect emissions from the generation of purchased energy.
Scope 3 emissions: All indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. This includes the impact of raw material extraction, material processing, all other transportation, distribution, product use impact, waste production and end of life processing.
Self-sovereign identity (SSI): A means of demonstrating the unique identity of a person or entity using digital technologies to provide an individual with control of their identity. This system allows two parties to verify each other's identities without having to share specific identity documents with each other. Validation is instead provided by an external third party (usually via a decentralised blockchain).
Supply chain: Series of parties that conduct processes or activities to produce and distribute material or product.
Supply chain management (SCM): Managing the flow of goods and services through a business in order to optimise quality, on-time delivery, and profitability.
Supply chain traceability: Traceability is the process of tracing key insights such as history, application, location, source, or material data from the very beginning of the supply chain through to end-use.
Supply chain transparency: Transparency relates to the degree to which information on processes, procedures, material, and product information is disclosed in a clear, factual, neutral, and understandable manner (i.e. an audit trail).
Supply chain visibility: This includes transparency and traceability.
Third-party verification: The use of an outside party to check internal claims regarding sustainability progress for public disclosure.
Unique product identifier (UPI): This is a means of finding out exactly what a product is and which supplier it came from. The identification scheme is a language-independent label, sign, or token, often consisting of a bundle of registered part numbers - e.g. universal product code (UPC), electronic product code (EPC), manufacturer part number (MPN) - plus the name of the brand which produced the product.
