Supply Chain Transparency is a phrase that is continuously being thrown around; from an increasing amount of companies pledging to run more transparent supply chain operations to some companies receiving backlash when their unethical and not so transparent operations come to light.
The term transparent in terms of business relations is an action, method or procedure that lacks hidden agendas and conditions. In other words, nothing is kept a secret and everything is out in the open regarding supply chain operations.
In 2016, David Weaver utilized a great method in displaying the characteristics of supply chain excellence using the term supply chain as an acronym; I thought this would also be a good idea with the term transparent, to showcase the features of a transparent supply chain that managers may wish to adopt and invest in.
These days, more and more technological advancements are available to help solve practical problems and make situations and operations along the supply chain easier. For example, blockchain is being suggested as a solution to trace the path of product origins and store these records. There are many tracing tools out there, but QR codes and smartphones play a big role in the tracking technology industry. Investing in these technologies could prevent any bad PR scandals. Recently, a lot of food retailers, such as Carrefour and Walmart, have been developing blockchains for their supply chain to avoid things just like this, among other reasons.
Transparency can be intertwined with accountability and involves companies acknowledging and accepting responsibility for their activities and actions along the supply chain. A company has numerous stakeholders that rely on them for decent working conditions and pay. However, through terrible incidents like the Rana Plaza building collapse in 2013 and a more recent example of Zara factory workers in Turkey not being paid, it is clear that these issues are still present. A transparent supply chain can identify these issues and enable steps to be taken to enforce workers’ rights and create a better and safer overall working environment. The idea of transparency could influence companies to analyze and ultimately improve their supplier operations before publicizing any information.
Honesty is the best policy and a transparent supply chain provides stakeholders with all the accurate information about companies, their suppliers and sourcing locations. This can be done through technology, as mentioned above. As a result, all parties impacted by the supply chain are given an honest account of all the activities with no misconceptions. Consequently, everyone, from buyers choosing suppliers to consumers choosing products, can make decisions based on their values and under no false pretenses.
Transparency is a very important topic, not only for ethical reasons but for business too. As mentioned previously in the responsible section, there are many problems that could come to light from being transparent. But on the other hand, leaving everything out there in the open can increase trust from not only customers but also trust from workers along the supply chain as companies are held accountable for their actions. Moreover, with similar incidents to those I touched upon earlier still occurring, some type of action and change needs to be taken, and a transparent supply chain could be a solution.
Transparency can lead to more safety, not only for consumers but for employees that work for suppliers too. Even more for food products, consumers want to know every detail of the journey of a product for health and ethical concerns. Take for example Tesco and the horse meat scandal in 2013, which caused a lot of uproar. Taking a transparent approach can also mean your company is safe from some scandals and their reputation isn’t harmed in the process.
In a lot of cases, a lot of strategies are not accomplished due to their feasibility. In the past, it would have been a much harder process to provide consumers with all the information relating to supply chain operations due to the complexity of many supply chains. Yes, complex supply chains still exist but with the technology mentioned previously, it is a much easier task. With that being said, for a transparency project to be successful, everyone needs to be on the same page on revealing major aspects about their operations.
While it may be an enormous task to get the go ahead from every participant along the chain, for example suppliers, to publicize details about their activities, you as a company would be providing consumers with exactly what they want – more and more consumers are demanding a more transparent supply chain. Earlier this year in January, 70,000 consumers urged big fashion retailers to disclose information about their manufacturing conditions after some brands didn’t comply with the #GoTransparent campaign and the Apparel and Footwear Supply Chain Transparency pledge. If companies don’t accommodate consumers’ wishes, they may go to competitors’ for their goods instead.
This one somewhat links to the previous adjective. Having a transparent supply chain can increase consumer awareness of all supply chain operations by providing them with detailed information on each activity. Based on the information given, they can make informed decisions. As a result, transparency can directly affect consumer confidence and buying behavior in a positive way. Consumers are not the only stakeholders to gain educational and informative benefits from supply chain transparency. Companies themselves with an extensive supplier network would have a better understanding of their own processes and could receive vital new details about the sourcing of their products, which could have an impact on the reputation of the business and customer satisfaction.
Being ethical in business operations is about supporting all of your stakeholders and doing the right thing by them. This in some ways means publishing information about your supply chain operations. Furthermore, these ethics can also be shown through sustainability efforts and lately, a lot of companies have been announcing their sustainability goals, some of which include responsible sourcing schemes, which can improve working conditions. For instance, Swizz luxury jeweler Chopard recently revealed it is supporting mines to reach a “Fairminded” certification – a standard that regularly assesses mines for human rights.
You may have noticed that the buzzword transparency has been popping up in headlines quite frequently. It seems clear that there is a chain reaction here. Transparent companies are triggering a realization to others that a change is needed. Being transparent will bring companies into positive light, instead of for scandalous activities, especially with consumers and could spark interest from new consumers as a result.
The topic of supply chain transparency has been around for many years. But in the last few years, it seems to have gained more traction and become part of a supply chain trend with more and more companies jumping on the bandwagon, to potentially give the company a competitive advantage. With that being said, I do believe transparent supply chains will be sticking around for the long term and become a standard action among companies.
Supply chain transparency has grown in terms of importance over the years. Despite this, it still has a long way to go. This article, to some extent, highlights the positive attributes that a transparent supply chain can provide companies.
Will transparency be part of your supply chain strategy?
Header photo: ESB Professional/shutterstock.com
[…] scandal. However, consumers are asking for transparency, which shows that the opposite is true and companies could lose customers, sales and profits to competitors if they don’t switch to a transparent supply chain and […]
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