5th April 2020
Supply chain transparency was an uncommon notion 20 years ago but has quickly become an essential factor in business operations worldwide. Concerns in the supply chain largely originated from consumers, government and stakeholders scrutinising about the legitimacy of procurement, code of conduct and environmental impact the process might undergo. To fully contemplate the idea of transparency in your supply chain, it is important to define the term transparency in the context of a supply chain.
Visibility or transparency translates to the understanding and knowledge of events progressing and communicating these processes internally and externally. In the past, upstream activities have been reserved for the company and usually not spoken about. With technology being easily available in the hands of most consumers, downstream stakeholders are entitled to examine the manufacturing process and observe discrepancies with the values of the company and the jurisdiction of the government. There have been instances where businesses have been shut down due to fraudulent activities in the supply chain. To avoid such inconveniences, four key constructs have to be maintained to ensure supply chain transparency.
What if there no longer was an intermediary within the logistics trade?
MIT Sloan School of Management has researched and established that consumers agree to pay approximately 15% more for services or products that possess a greater supply chain transparency. Realising the fact, companies must first discern their presence in the sector and identify areas risk, both primary and secondary. This scrutinising would reveal information gaps previously unknown.
Realising the information gaps in the supply chain, it is paramount to visualise these gaps and identify the specificities of the supply chain, from the governmental regulations, disruptions, issues with the supplier, transportation, procurement and raw material sourcing and so on. With the data compiled, analysed and visualised, the idea of supply chain transparency can now be integrated into the operations of your company.
With the visualisation of the supply chain and key areas identified, you must comply to review the code of conduct (values of the company) and minimise the discrepancies. This includes conscious upholding of labour practices, governmental laws and ensuring operations do not violate environmental concerns. Integrating transparency in the supply chain, it would be ideal to promote these additions with consumers to enhance the sense of loyalty and fidelity towards the company.
Identifying informational gaps and attended to them are the foundational stones to a supply chain. A workable transparency programme does not simply solve the current predicaments but ensures to learn, manage and share insights and prove to establish lost-lasting transparency in the supply chain. Speciality programmes can be introduced in the supply chain to identify real-time risk factors, visualisation tools, analytics and more.
Advancements in technology have enabled systems to manage and monitor several internal and external information in the supply chain to mitigate risks. Tools to assess particulars in the supply chain, managing KPI’s, tracking products and transparency to inform consumers.
A supply chain is an unruly place and efficient transparency is vital to ensure consumer loyalty and effective operation.