Why supply chain transparency matters and how to get there
In our world of interconnectivity, businesses can no longer hide from their consumers who are demanding more insight where their goods come from. Developing transparent information systems and processes to communicate sustainable supply chain practices to stakeholders, government organizations, and especially consumers—is vital.
Considering this, the relationship between sustainable retail supply chain visibility, traceability, integrity, and transparency is clearly linked.
The concept of supply chain integrity builds on this by enabling companies to embed ethical and sustainable decision making into their corporate and supply chain strategies. Instead of creating false trade-offs between being profitable or being sustainable, a management philosophy of integrity enables companies to find mutual successes along with financial, environmental, and social performance criteria. This is important when considering the many challenges in retail supply chain management.
Supply chain visibility has a direct impact on the quantity and quality of supply chain traceability and transparency capabilities. The ability to follow individual products through the distribution network; from raw materials to end products to the front door—is at the very heart of providing high levels of transparency to consumers.
- Traceability has a direct impact on supply chain recall management capabilities. While supply chain visibility is important for providing a transparent supply chain, companies must also be able to provide traceability for products. This means it is often necessary to retrace the steps of a product’s evolution and manufacturing, including sources of supply and knowledge about the actual content and material in a particular product.
- Transparency has a direct impact on consumer trust and a company’s sustainability performance. Good supply chain visibility and traceability not only allow companies to recall and recover products if of problems, but they also enable companies to transparently provide information to customers about products. This transparency builds increased levels of trust with customers about the sustainable performance of the company’s supply chain.
Companies with high levels of supply chain integrity, visibility, traceability, and transparency competencies will mitigate supply chain sustainability risks, leading to competitive advantages in the marketplace. Companies face several supply side risks including slave labor, product contamination, and environmental damage at supplier locations. Building a transparent supply chain will proactively ensure consumers that the company is achieving high levels of sustainable performance.
Embrace it as a major driver
As part of a company’s practice of knowing its customer base, it has become clear that younger generations have a higher awareness of environmental impact and social issues, and how the products they purchase influence them. They are attracted to companies with sustainability information included on product packaging or as part of their brand mission statements. Because of this, social media has become a form of consumer-created marketing that can be used to a companies gain or complete ruin. Providing clear and honest information readily available for your supply chain management can help mitigate and guide these conversations.
Develop a culture of transparency
Transparent companies don’t just talk about it; they have it as part of their culture. This starts internally with a clear and compelling strategy and vision. Executive leadership must support the vision and show how it fits within the existing business strategy. Buy-in must be driven at all levels. Individual goals should be set within various functions, such as procurement or product design. All employees should know what their role is within the sustainability vision. This daily, personal involvement in sustainability as a part of ongoing work drives the desired culture. There also must be a recognized transparency commitment to customers and consumers. It must become part of the company’s ethos to conduct itself transparently.
Partner with sustainable suppliers
In choosing suppliers, supply chains traditionally have used cost, reliability, and quality as the major deciding factors. Having a sustainable practices profile is another criteria that must be considered for evaluation when choosing suppliers. A good first step in testing suppliers is to request a self-assessment of labor, safety, environment, and business practices. It is important to carefully determine the parameters by which the company would consider a supplier for partnership. This is also true for current suppliers with a history of specific violations.
The company must be clear where there is a zero-tolerance for audit shortfalls. It must reinforce visibility at the beginning of a supplier partnership. Ideally, the supplier would allow access to their material sources and to take part in company or third-party audits related to sustainability practices. Even better, if chosen suppliers have already committed to sustainability and take part in, or even lead, initiatives to improve the environmental and social impact of their products.
Ensure traceability to enable transparency
Companies must ensure traceability to create transparency. Knowing where materials come from and how they are produced is critical for quality assurance against sustainability standards. Implementing IoT solutions easily achieves this. Lack of traceability in the face of a safety or environmental violation can be a brand killer. While the company is scrambling to trace particular products, consumers may have already bought another brand.
Making transparency work for you
Social and environmental responsibility for an organization begins with leadership. A hurdle companies must overcome is the fear of sharing too much or too little information, both internally and externally. By finding the transparency sweet spot they can communicate what is important to consumers without creating information overload or muddling their brand message. By working with their retail supply chain insights and a concise vision, this should be an easy sell that will be rewarded with serious brand loyalty.
The more companies work to listen to the consumers of their goods, the more they will understand the importance of visibility and what transparency means for their business and customers. By openly sharing what the public and regulatory groups are asking for, while also having data and detailed analysis readily available for an in-depth examination is how the architecture for organized transparency is created.
Interested in how you can influence your bottom line by implementing mobile technology to make your supply chain transparent?
Laura Pierce Little
Digital Marketing Specialist
Laura graduated from Virginia Commonwealth University and holds a degree in Creative Advertising. She’s passionate about authentic narratives, finding what a brand believes in and figuring out how to best translate that to consumers. She feels fortunate to have worked in and have experience in just about every part of the advertising and marketing world. In her downtime she can be found going on outside adventures with her dogs, enjoying local breweries, or doing experiments in her kitchen.