Supply chain transparency and the demand for the information on provenance of manufactured products has gained momentum over the last decade. Consumers are increasingly seeking answers to one question, “From where did this product come from?”. Provenance has risen from ground zero to be the top most priority in the consumer’s mind. Supply chain transparency demands the organization to remain open about its business practices and processes including their objectives, goals, and operations.
Supply chain transparency is information that tells the end user from where the product is sourced and ensures product manufacturing visibility under the accepted labor working conditions. Consumers want to know where the flowers that are sold by the next-door florist came from or how exactly the food on their table was produced. Supply chain transparency integrates technology and supply market intelligence along with various concepts such as fair-trade practices and the farm-to-table movement to build consumer trust and loyalty towards the brand’s products.
Opaque Supply Chain – What’s Behind the Curtains?
Earlier, customers were least bothered about the provenance of a product, and the concept of supply chain transparency was dormant. However, in the wake of claims regarding the exploitation of labor and natural resources across the globe, consumers have labeled brands with an opaque supply chain as harmful to the workers, employees, customers and the society as a whole. Over the last decade, several scandals have unearthed that involve those companies who fiercely guard and hide their production processes. Organizations often shy away from adopting supply chain visibility for various reasons like unfair trade practices, low wages to the workers, employing women and children in hazardous processes, etc.
Why Is Supply Chain Transparency Essential?
The downstream stakeholders i.e. consumers, governments, and companies are questioning the brand’s sourcing practices amidst queries over the quality and safety of the products and other environmental and ethical concerns. Organizations are keen on disclosing information about its supply chain processes and sourcing practices. It is a clear indication of the manufacturer’s efforts towards eliminating the temporal distance between its upstream and downstream stakeholders, thereby reducing upstream risks. Supply chain transparency ensures increment of the brand’s value in the consumer’s eyes. Achieving supply chain transparency is an essential capability that organizations must strive for so as to build a highly resilient supply chain. Why so, you ask? Here’s why.
- Increases brand credibility among consumers, governments, and companies.
- Consumers are willing to pay those extra dollars for any brand that offers complete supply chain visibility, are ethically sourced and environment-friendly.
- Supports the farm-to-table movement, thereby building consumer trust and brand loyalty.
- Supply chain visibility ensures fair trade practices within the organization and throughout the entire supply chain. This means fair labor practices and healthy working conditions for the workers.
Supply chain transparency means revealing the origin of the product so as to gain consumer trust and build brand reputation. Organizations have made provenance a virtue that they swear by, striving to better their labor practices thereby minimizing the environmental risks throughout the supply chain, and making provenance a big deal. In order to adopt supply chain transparency in their organizations, the management must leverage the supply market intelligence and sourcing insights, to drive cost savings, boost profitability and develop its reputation in the market.