Supply chain transparency is a powerful way to gain customer trust, attract talent, strengthen supplier relationships and manage risks. And regulations now require companies to disclose forced labor or conflict conditions in the extended supply chain. But no company has the resources to be 100% transparent - and no customer, investor, or regulator has the time to parse all the data that would result. How can a brand be honest about its supply chain without revealing too little or spending too much? Since 2008, Sourcemap has been working with companies to implement supply chain transparency and traceability. Along the way we learned that there is no such thing as total transparency, but you need to start somewhere. Our phased approach saves time by incorporating feedback from stakeholders every step of the way. Here's how we do it:
Step 1: Set the scope and targets for a transparency roll-out
The first step to supply chain transparency is an honest assessment of your current visibility. How well do you know your strategic suppliers? Your first tier suppliers? Your sub-suppliers? What type of information have you collected about them? A baseline survey of your purchasing data will inform the scope and the targets for a phased roll-out of supply chain transparency. A typical first-year goal is to disclose the list of strategic suppliers. In subsequent years, you'll want to trace key product lines to raw materials, and expose critical issues where you have the most leverage. Ultimately, you'll be able to collect data from your extended supply chain automatically, and return useful benchmarks to customers and to suppliers along the way.
Step 2: Engage early with suppliers
Supply chain transparency should be mutually beneficial: to brands, who gain the trust of their customers, and to suppliers, who gain worldwide visibility as the best-in-class. The trick is to involve suppliers early in the development and roll-out of supply chain transparency so they have a chance to discuss issues that might arise down the road, and they can take the time to present their brand in the best way possible. In the past we've seen suppliers who are engaged early contribute stories, photos and videos all as part of a customer's supply chain disclosure.
Step 3: Develop a message that resonates for all stakeholders
Too often supply chain transparency is targeted to NGO's and Corporate Social Responsibility professionals, when the real benefit is with employees, shareholders, customers and the press. But no two brands have the same approach to corporate communications, so any supply chain transparency effort needs to engage early and often with marketing. The result of a successful supply chain transparency roll-out should allow customers to learn about the supply chain and about the quality and care taken to make the best products possible.
Step 4: Gather feedback and repeat
We've seen brands paralyzed by the idea of "radical transparency" take years before making any supply chain information public. A phased approach to supply chain transparency saves time by ensuring that the right information is communicated to the right people in the right way. Alongside each disclosure, companies should maintain a two-way communications forum to gather feedback from all stakeholders, including employees, suppliers, customers, NGO's and the public. The feedback will then be used to re-evaluate the scope and targets for transparency and ensure that the next disclosures provide the greatest benefit for all key supply chain participants.
Ready to make your supply chain transparent?