True Supply Chain Transparency — The Most Wanted Aspect in the Logistics Sector
In today’s competitive world, consumers have very exact requirements and want accountability from suppliers regarding not only their products but also, how they are transported. If there are delays in delivering freight, in addition to wanting to be apprised about these, they also want to study why they were caused. They want an update about each step of the supply chain process so that they can use this information to better plan for the future.
The demand for full transparency is increasing especially in the food and retail sectors. Customers want to know that their goods are being produced and delivered through sustainable and ethical practices. Consumers, governments, and companies are demanding details about how products are being handled and if they are being delivered using sustainable means. They worry about quality, safety, ethics, and environmental impact.
The days when products were “tracked” merely by spreadsheet, or when partners managed and contacted via phone or email are long gone. These traditional methods, make it all too easy for things to fall through the cracks because they are typically disconnected technologies used in silos by partners.
As more global shippers rely on multiple carriers to mitigate risks and manage costs, establishing a single source of truth for all logistics information is a challenge. Organisations must employ technologies to stay current and meet the ever-growing customer needs. Using a digital platform allows for more streamlined supply chain collaboration, thus resulting in improved efficiency and transparency.
Complete supply chain transparency has manifold benefits. It amounts to huge gains for suppliers and customers as there is no hidden cost. There is the element of trust that comes into play between both parties and develops into a meaningful business relationship between suppliers and customers.
The Human Aspect
Transparency is an essential step towards addressing the significant human rights issues within company supply chains. Before action can be taken, a key prerequisite is knowing what specific issues exist. Fundamentally, companies cannot address issues if they do not have visibility into them.
Consider the following instances:
Most iPhone owners probably don’t think about the provenance of their devices, but worker suicides at Foxconn, one of Apple’s major Chinese suppliers, forced the company to pull the curtain back on part of its supply chain in 2009. It had to quell claims that it relied on sweatshop labor.
Another high-profile case, the “toxic drywall scandal,” led to class-action lawsuits. The offending product was imported into the United States bearing no readily available information about its source other than a “Made in China” stamp.
And a few years earlier, toy giant Mattel faced a tornado of publicity about lead in toys, which raised questions about how much control it had over its supply chain.
Apart from this, transparency also allows for the opportunity to analyze the requirement for additional technology for example — for automating processes. An ideal approach involves combining the right technology with the human capital to establish and support effective logistics processes. A holistic supply chain partner combines systems, logistics expertise and service to ensure you can see and manage everything you need to — and nothing you don’t.
Blockchain for Supply Chain Transparency
Making sure that payments are not funding civil wars, genocides, terrorism, and the like is where Blockchain technology factors in. In the UK, 30% of consumers are concerned about issues regarding the origin of products, and the market for products of proven origin is growing.
It is also not just a company’s reputation that’s at stake. In Europe and the US, a raft of regulations including the European directive on non-financial reporting, the UK Modern Slavery Act, and the 2010 California Transparency in Supply Chains Act mean companies have to transparently disclose reliable information about their business footprint. These have led to a series of civil litigation suits, with consumers or workers using the legislation to launch legal actions against companies they accuse of making misleading public statements on their anti-slavery effort.
Blockchain is, essentially, a universal ledger that operates using a global peer-to-peer network. It uses an algorithmic consensus established by verification through the network to approve entries to records, which it uses to manage transactions through a distributed database of computers.
These entries keep getting added to the so-called ‘chain’ of computer code. When one report is closed, it is locked, and advanced cryptography and the consensus method of transaction approval mean that the files are as impenetrable to hackers as is currently possible.
Its main use has been in finance, where trust is imperative. Larry Summers, president emeritus at Harvard University, has even noted that it is ‘overwhelmingly likely’ that ‘blockchain will change finance forever’. Supply chains are equally reliant on trust, and the benefits of such a system are clear. Relying on one party creates an inherent bias and weakness in the system, while blockchain ensures a far greater level of authenticity.
The Possibility of True Supply Chain Transparency is Here
More and more tech start-ups are receiving financial backing from investors to adopt technology that allows for complete supply chain transparency. An organization’s supply chain often contains hidden risks that could have a negative impact on the organization. As quoted in a Sustainable Sourcing article, Simone Luibi, practice head for green procurement at BrainNet stated.
“Many companies are not adequately informed about the time bombs that are ticking away in their added value chains. After all, it’s not just about high standards within their own four walls: overlooked environmental legislation, poisonous substances in product components or suppliers employing child labor can damage the company’s image long term and bring with it serious financial and legal consequences.”
In our view, by injecting technology and transparency into logistics, you get an accelerated shipment experience that is convenient, cost-effective and reliable. For example, our solution provides transparent pricing that reveals all details of quotes up front. Coupled with this is the real-time freight tracking system, allowing customers to keep an eye on their goods throughout the supply chain process. Through such a platform, end-to-end visibility of shipments online is now possible. As an additive, Shipwaves also provides 24/7 support via a team of logistics experts who coordinate all aspects of the shipment round the clock and provide tactical recommendations to guide customers every step of the way.
Transparency is an increasingly important capability for organizations so that they can learn from and act on supply chain information. Greater visibility of the different elements of the supply chain allows companies to manage risk effectively, reduce supply chain failures and the risk of complex recalls. Consumers are increasingly health conscious and cautious of the environment, meaning they prefer to know the roots of the products they consume so transparency is no longer just about ensuring efficiency; it is becoming a market-driven necessity.
Supply chains are increasingly regulated through different legal bodies meaning manufacturers and suppliers must focus more on the prevention of supply chain problems rather than acting in response to issues, when it may be too late.
Without the ability to track and trace through the entire supply chain, it is impossible to ensure that contamination has not occurred at some point in the process. Brands are more exposed to the public than ever through social and online media and these have increased opportunities to build trust and openness directly with consumers.
Despite problems in the supply chain not necessarily lying with the manufacturers, consumers will always blame the end supplier regardless of the true source of the problem, so it’s better to reduce the risk of this occurring. The reputation and financial consequences can be devastating for a company if consumer trust is lost. The ability to show transparency in the supply chain is one of the best ways to increase consumer trust and loyalty.
Supply chain transparency safeguards the interests of all concerned parties while employing technologies that holistically improve processes through an integrated system, accessible to all players at every step. It is imperative for organizations to invest in technologies that will allow complete supply chain visibility and transparency for the mutual benefit of the organization and the associated customers.