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9th Feb, 2020

Nick Tagg
Nick Tagg
Job Title
Regional Manager

What can your business do to create a more transparent supply chain? What are the benefits of doing so?

Implementing transparency into your business and supply chain practices is so important in today’s procurement and supply chain landscape. There can be high costs to transparency, but you may create an instant return on investment by making these changes.

The point of being transparent is to create change that will benefit your workers and boost your brand. It’s not enough to know what the issues are, you must act fast to resolve any problems you find within your business to promote trust. Companies that don’t make changes could end up suffering from massive reputational damage if an issue did occur.

Consumers are far less likely to buy your products, or engage with your business, if the company has been found to take unethical shortcuts. More businesses and consumers expect to be able to find out where products originate. Having a proven record of ethical practices and engagements with suppliers has become imperative.

Reputation and ethical sourcing

Professionals should always be considering every aspect of their supply chain to ensure it is ethical – from the factory to the consumer. Human rights issues are being prioritised in the sector.

Companies with high transparency will have a higher level of consumer trust, a better reputation, and higher revenue as a result.

Many companies have made commitments to improve transparency in their supply chains – especially in the fashion industry – and to do more to uphold the rights of their workers. Major apparel brands are revealing information about their suppliers, supply chain policies and practices, as well as their social and environmental impact.

For example, Marks & Spencer has released an interactive map of its 67 factories around the world.

Adidas and Reebok are two of the most transparent brands (64%) according to the Fashion Transparency Index 2019 – no brands have reached 70% yet.

Positive changes to integrate into your supply chain

There are a multitude of methods to creating a transparent supply chain – especially with technological advancements and a globalised world. If you haven’t already introduced these methods, you should consider doing so to give your supply chain an advantage.

Branding – build trust by dedicating your marketing team to highlighting your company’s transparency and ethical supply chains. If you are not ready to be transparent, be honest and acknowledge what you need to improve - then make those changes.

Technology – The myriad technological tools created for procurement and supply chain include radio-frequency identification (RFID) and blockchain:

Blockchain technology can be used to trace the materials used in products, allowing you to access this information in the cloud.

RFID involves placing a rice-grain-sized chip in or on your product to find it at every stop in the supply chain, from anywhere.

On-site – being there in person to oversee the work being done is so important for communication and creating the environment you want. Trust and training are very important for transparency in procurement and supply chain.

It is fundamental for someone to ensure workers’ rights, human rights, and labour rights are being upheld and that their working conditions are safe.

Strategy – this involves using all available data on the current supply chain in order to plan for the future.

In order to create a true structural impact on an organisation and its supply chain, all parties must be involved: shareholders, suppliers, management and others.

Consumer – the general public are the ones who decide if a brand is transparent and ethical enough to gain their approval. Consumers are increasingly demanding transparency at all levels – they want to know the quality of life of the people working for businesses.

Companies are also under immense pressure from governments, NGOs, and other stakeholders, to disclose this information.

Having multiple methods of data collection, at every step, will allow you to pinpoint every area that needs change and allow you take action – improving your business’s reputation in the process.