Supply chain transparency – a concept that was virtually unknown 15 years ago – is now commanding the attention of companies and industries across. The reason behind this increasing interest can be attributed to the governments, NGOs, other stakeholders, and ethically conscious consumers demanding more information about the supply chains they delve into.
While supply chain transparency largely helps build brand and customer loyalty, it is not the only benefit that you can reap from it. In this article, we explore, the impact supply chain transparency has on forging critical collaborations, its benefits and why are companies still shying away from being 100% transparent.
But before that, let’s understand the concept.
What is Supply Chain Transparency?
In essence, supply chain transparency means, companies are aware of what is happening upstream in the supply chain and are communicating clearly with factually backed information about their supply chain operations both internally and externally.
At large, the areas of concern which are required to be covered in supply chain transparency include:
• product quality and safety standards
• raw material sourcing
• labor practices
• environmental protection and sustainability, and more.
Supply chain transparency projects an image of a business that is honest and upfront about their practices and this helps build trust not only between customers but also suppliers and companies, therefore helping you forge better critical collaborations.
Transparency solidify collaborations
An honest and upfront culture is nested across the ecosystem, by companies that practice supply chain transparency. This attracts like-minded suppliers and partners willing to contribute to your missions.
A transparent climate opens new gates of communication between partners and helps forge a partnership that lasts longer and drives improvement through the supply chain.
In an ecosystem where honesty and transparency are rewarded, partnerships are forged not for substandard work or to take respite in unethical behaviors behind others’ backs. Rather, such partnerships help each-others resolve production issues and improve production and quality management systems with better supply chain management, QC data sharing, and quality and compliance training.
A collaboration built on supply chain transparency gives birth to an improved brand that can help gain an effective competitive advantage. As a supply chain that is honest and transparent within the business, you show the world the integrity of your operations. Newly forged collaboration brings in more new business and even catches the eye of many potential consumers. Moreover, it is primarily a multi-stakeholder cooperation that works on transparency, which can bring about a sweeping change at organizational and even social levels.
But if transparency is the growing norm, why do companies still shy away? Why is the transition to a transparent supply chain slow?
Well, it is the ideology and fear of being vulnerable that puts brakes on the practice. Many wrongly believe that supply chains aren’t designed to be transparent. Well, in fact, it is their fear of divulging too much information which might give competitors a hold of their secrets, or expose them to criticism.
Another reason behind this slow transition is the lack of investment and efforts put in by organizations to have access to relevant information such as details of upstream supply chain practices. Additionally, the slow ROI for investing in transparency stops many to practice transparency in their supply chain operations.
Clouded by the myths around transparency, many supply chains are still unable to unlock their complete potential. However, it is time to understand that transparency, acts as a bridge to critical collaborations and helps ecosystems thrive on shared values and propelling improvements through the supply chain.
