From 20th May 2019, the Tobacco Products Directive comes into force; initially affecting the manufacture, distribution and sale of cigarettes and roll your own tobacco. Products will not be allowed into the market, if they are not uniquely serialised and the data of the specific packs and transactions being captured and shared throughout the supply chain. By 2024, this will encompass all other tobacco products. The purpose of the TPD is to pursue a high level of health protection for European citizens while ensuring control of contraband and that appropriate taxes are being paid.
From manufacturers, distributors and wholesalers to retailers, the changes will affect the entire supply chain. However, individual organisation’s requirements may differ and ensuring an appropriate response will mean you can achieve compliance efficiently by building a solution within existing processes and not creating yet another discrete process. Olivier Frère, Traceability Expert at Zetes, highlights the top three priorities to become compliant:
1. Discover and understand your obligations
Firstly, it is important that supply chain stakeholders fully understand the Directive’s requirements and how to start addressing their compliance obligations. The movement of every tobacco product will now be scanned and recorded throughout the supply chain, from point of manufacture, throughout distribution to point of sale.
However, it’s not a one size fits all approach. For example, whilst some wholesalers may have warehouse management system capability, it’s highly unlikely that they will have the capabilities to efficiently capture, handle and transfer all required data to the EU Router. The Directive also extends to mobile van-sales operators fulfilling direct to store, vending machine deliveries or a contractor shipping to retailer outlets: compliance will need to be guaranteed at every step, in every location.
2. Selecting solution partners
In responding effectively to the Directive, stakeholders should:
- Choose their solution partner carefully. Firstly, they should ensure that the solution partner is already working closely with the European Commission and has a solid understanding of the requirements.
- Consult partners who have strong track-and-trace credentials within regulated markets. Business efficiency – and indeed compliance - can be negatively impacted without the appropriate technology enablement, data aggregation capabilities or future-proofing capabilities.
- Ensure minimal ongoing resource overhead by clarifying that the solution being proposed can be embedded into existing processes and not a standalone discrete solution. This adds risk and cost in the ongoing operations.
- Ensure the partner has the capability of interfacing with the primary repository through the EU Router.
For manufacturers, the solution needs to provide packaging and product identification that is required for serialisation and aggregation processes as well as traceability. The full solution should also deliver a primary repository where all the relevant data will be published and enriched.
For wholesalers, distributors and retailers, the solution must capture, combine and publish the unique identification codes together with the specific sales data to identify transactions and who they are for.
There are two ways in which a business can implement a compliant solution. Either an integrated system that connects with all existing databases for greater efficiency gains, or for a speedy turnaround, a stand-alone solution. It is, however, important to ensure this has the capability to evolve through a second phase to achieve continued efficiency and compliance in the process.
3. Additional activities in warehouse/transport processes
When projects for compliance are conducted in the right way, they can enrich business operations and not just be seen as an overhead for new regulation. Although a TPD project implementation may be viewed as operationally disruptive, with the appropriate guidance, automation and technology in place, you can realise additional business value and enhanced supply chain visibility on top of compliance.
When projects for compliance are conducted in the right way, they can enrich business operations and not just be an overhead for new regulation.
As businesses strive for operational efficiencies and new regulations continue to demand transparency around the movement of products, companies must seize every opportunity to take advantage of the benefits that traceability throughout the supply chain can yield by implementing a flexible solution platform that avoids having discrete solutions for each regulation.