Editor’s note: You may have missed this post when Transparency-One published it last year. We have updated the content for 2019 are sharing it now because the benefits of transparency remain as relevant as ever.
We all know that supply chain transparency has become a must-have in today’s market. But it’s not always easy to achieve: the process requires companies to invest time, money, and effort, and even hire new skillsets and adopt new tools. These barriers pose a challenge that can make it more difficult to convince your business to take the steps towards transparent supply chains.
How can you overcome this challenge? The key is to demonstrate return on investment. What are concrete ways in which your business will benefit from transparency? What makes it worth the time, money, and effort?
Different departments all benefit from achieving supply chain transparency—here’s how to make your case.
- Your role: Find ways to connect consumers with your brand
- Case for transparency: Demonstrate brand values in a new way through increased supply chain knowledge. Share this information directly with shoppers to engage with them more effectively and gain consumer trust.
- Example: Shoppers want to know where your brand’s jeans come from. By increasing knowledge of your denim supply chain, your brand can share valuable insights about your jeans, such as the cotton’s country of origin or your suppliers’ sustainability practices.
A 2018 study shows that about 74% of consumers say they would switch from the brand they usually buy to another brand that provides more in-depth product information, beyond what is on the physical label.
- Your role: Ensure product quality meets brand standards
- Case for transparency: Demonstrate your product quality by capturing quality data, such as product certifications, for your entire supply chain. Use this data to earn consumer trust and ensure your brand only works with compliant and trustworthy suppliers, for 100% safe products.
- Example: You’re not sure if your beef suppliers follow best quality practices. With supply chain transparency, you can identify all your suppliers’ facilities and ensure they have the relevant safety certifications.
A survey from the National Farmers Union found that one third of UK consumers were less trusting of products and retailers than they were five years ago. 42% were concerned about food fraud, with a third believing food crime will increase in the future.
Sustainability & CSR
- Your role: Improve your brand’s sustainability and social responsibility practices
- Case for transparency: Effectively demonstrate your business’ social and sustainability efforts by capturing CSR data, such as facility certifications and labor statistics, and sharing this data with shoppers.
- Example: Palm oil is a controversial ingredient, due to its ethical and environmental implications. With transparency, you can identify your palm oil suppliers to determine whether they are RSPO certified and gather data on labor practices – ultimately demonstrating your brand’s commitment to source palm oil more responsibly.
According to Nielsen, 81% of consumers feel strongly that companies should help improve the environment. A 2018 study found that 62% of customers want companies to take a stand on current and broadly relevant issues like sustainability, transparency or fair employment practices.
- Your role: Ensure your brand and products comply with regional and market regulations
- Case for transparency: Assure brand compliance by capturing compliance data, such as certifications and audits, for the entire supply chain.
- Example: More and more countries are enacting official regulations against modern slavery. Transparency enables you to identify which suppliers have received social responsibility certifications to ensure your brand complies with regulations such as the UK Modern Slavery Act, from source to store.
Deloitte identified eight different compliance risks shared by most supply chains, including supplier integrity and social responsibility, environmental responsibility, technical regulations, and labor and employment.
- Your role: Obtain goods and services for your brand
- Case for transparency: Optimize supply chain costs and resilience through transparency. Capture end-to-end supply chain data to identify inefficiencies and evaluate cost-saving opportunities.
- Example: Use transparency to identify which of your supply chains rely heavily on a single supplier or depend on facilities located in countries at high risk of natural disaster. Use this knowledge to optimize your supply chains for improved efficiency and resilience.
A 2018 study by the Business Continuity Institute found that 56% of organizations experienced at least 1 supply chain disruption in the previous 12 months.
Transparency-One helps companies in their journey to transparency by providing the technology to manage complex, global supply chains. The Transparency-One solution enables businesses to discover, analyze, monitor all suppliers, components, and facilities, from source to store. Our global supplier onboarding services, detailed business intelligence and reporting, and “social network” graph technology help all supply chain stakeholders identify and reduce business risk.
The era of transparency is well underway. How can you ensure that your business is well-equipped to thrive? By presenting a specific and concrete case for transparency, the value of supply chain transparency for your business becomes clear.