April 01, 2014
Why Supply Chain Transparency Is Key to Your Company’s Success
by Noel Datko
Traditional supply chains, once only intended to be accessible internally, are coming out of the closet. Companies are being called on to offer complete visibility into their labor practices, energy consumption, waste and carbon emissions measurement, and water supply management.
The real, bottom-line benefits of taking your supply chain transparent are simple: It boosts your company’s image, increases customer loyalty, and can put you light-years ahead of your competition. Transparency means offering consumers real insight into your environmental and social initiatives, and your efforts to improve the quality and cost of your products. It gives you a whole new standard of excellence to live up to—and your customers notice.
As I previously mentioned, responsible and ethical supply chain focus, plus transparency around those initiatives, is becoming essential to your company’s public image. And with social media able to directly impact a company’s reputation, public image more and more affects your bottom line.
The real, bottom-line benefits of taking your supply chain transparent are simple: It boosts your company’s image, increases customer loyalty, and can put you light-years ahead of your competition.
Even more, transparency offers a significant competitive advantage: It’s a consumer’s privilege to buy a product blindly, either ignoring or not caring about its supply chain footprint. But transparently offering an ethical, compliant global sourcing strategy becomes a true competitive differentiator.
It’s how companies gain, and keep, customer loyalty, not to mention making themselves an employer of choice. High-quality potential candidates are attracted to companies that demonstrate they understand that business is, and should be, more than just driving straight ahead to make a profit.
Once you’re on board with the reasons you need to offer a transparent supply chain, the next concern is how. Your ability to be transparent is directly proportionate to just how complex your supply chain is. And the way you design, implement and support transparency initiatives is directly related to how your company currently plans, designs, makes and ships products.
What new requirements will you have to implement in your process? How deeply will changes need to go? Where do you need to start? You can look at everything from how and where you source your materials to how and who assembles them. Consider reducing emissions in your shipping practices, implementing a green packaging initiative, and more. Then you need to consider how to make your initiatives visible to the public.
Nike, for example, has put a Nike Responsibility initiative into place. They developed the Materials Sustainability Index (MSI), a database that, over seven years of research, assembled information on 77,000 materials. Its supply chain team is thoroughly trained to make smart, creative choices regarding material choices when designing and sourcing for their new products. This means that accountability becomes a companywide value.
Supply chain transparency is about harnessing the right combination of innovation and environmental, social, quality and cost best practices. When you operate with full visibility, you’re opening your company up to a new standard of excellence, and redefining what success means. It goes beyond big business, bottom lines and ROI—it’s about operating smartly, ethically and in a sustainable way, now and into the future.
Noel Datko is Marketing Director at IntegraCore LLC., a company that offers outsource turnkey fullfillment center and distribution warehousing services.