Building a transparent supply chain

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Having a visible supply chain is no longer enough as many consumers are demanding more from businesses in the wake of green and woke initiatives; consumers want complete supply chain transparency and want to know exactly where their products or food have come from. Transparency means knowing where the raw materials are sourced, the safety standards involved, the sustainability and environmental impacts, labour practices and much more. From a business perspective this means taking the visibility gained from data and taking it to the next level and making it public knowledge, whilst managing the sheer number of risks involved in opening your business up in such a way.

The idea of revealing supply chain practices might seem alien to some businesses, because for a long time, businesses have kept supply chain information hidden for fear of becoming vulnerable to competitors or open to criticism from consumers, but the stark reality is there are clear benefits to supply chain transparency and consumers are voting with their feet .

A transparent supply chain brings with it benefits such as greater consumer trust and assurance and in turn, brand loyalty, stronger partnerships with stakeholders and a competitive advantage over those who haven’t yet reached a level of transparency.

The key to building a transparent supply chain is having the tools in place to give your business complete visibility first, but it’s important to remember than transparency takes time and won’t happen overnight. Even the largest of companies will potentially find transparency difficult but when you consider the benefits it is certainly worth pursuing. 

How can you build transparency into your supply chain?

Implement a policy

Identifying your goals and setting policies is the first step to transparency and posting this publicly on your website and social media pages is a good idea. Whilst setting goals you should consider the risks of each supplier to your business, a process known as materiality. 

Quality control

Establishing a consistent scoring process for your suppliers is critical to make your quality control process reliable so that all your suppliers are scored the same, whether they are in the UK, Bangladesh, or Bangkok. Audits should look at whether suppliers are meeting health and safety standards and international and local laws, and you should decide as a company how to deal with any suppliers that don’t meet your specified criteria. Finally, you must decide how much of this information you wish to make public. 

For any suppliers breaching policies or ethical practices, you should never blame lack of knowledge as this lack of insight into your suppliers could be even more damaging to your business for not investigating your supply chain fully or the source of your raw materials. Using software, you should map all your supply chain beyond your teir-1 suppliers so that all your sourcing, suppliers and subcontractors are accounted for and scored. From here you can publish full details of your supply chain and suppliers with the public, if you wish, and keep an internal record detailing the compliance scores for every aspect of your supply chain.

Continuous monitoring

Once you have scored your suppliers, you shouldn’t simply forget about them. Scoring should be conducted regularly so that any non-compliance can be identified and rectified quickly before it creates negative publicity to your business.

It can also be useful to set up a visual depiction of your supply chain to gain even deeper visibility and understanding of how your raw materials and goods flow through the supply chain. By doing this you can visually see the location of your suppliers and their proximity apart, any location-based risks and track your carbon footprint and expose any areas where problems might occur.

Supply chain transparency is becoming more prevalent by the day, with consumers demanding to know where their products are coming from, and some countries are even implementing laws regarding transparency. Equipping your business with a robust supply chain solution is critical to developing and tracking the visibility needed to go one step further to full transparency. Once you have the information you need internally you can decide how much information is shared publicly, but posting supplier information on your website is a good starting point.

For more information about how Opera 3 can drive supply chain transparency contact us today.

Posted On: June 08, 2022