What is Supply Chain Transparency?

Supply chain transparency involves two key aspects. The first is a business knowing exactly what is happening at every stage of its supply chain. The second is that a business is able to clearly state, and factually support, all information about this supply chain and its operations both internally and externally. This allows employees, customers, and suppliers a full and complete understanding of the business’s values and practices beyond day-to-day trading.

 

Why is it Important?

The subjects of greenwashing and greenhushing are well documented in topical media, and for this reason, supply chain management is coming under increasing scrutiny. Consumers are becoming more savvy and more curious when it comes to challenging what they consider to be unethical practices. Alongside competitive pricing, item quality and brand experience, supply chain transparency is increasingly becoming a factor in the purchase decisions of consumers.

Consumers are becoming more and more aware of poor supply chain practices, and cover-up attempts by big brands regarding their labour force, materials use, environmental impact, and waste management. Transparency by businesses in their efforts to improve their supply chains is important in two key ways. Firstly, they communicate their trading realities and efforts to their audience, which inspires greater trust in both business-consumer and business-employee relationships. Secondly, they encourage other businesses to do the same and therefore contribute to the compounding effects of positive change.

 

How to Offer Transparency

How transparency is managed and communicated is very, very important. It needs to be honest and it needs to be motivated by a genuine desire for improving business practice. Anything less becomes immediately obvious to consumers and employees and opens a business up to greenwashing accusations. Take action for the right reasons, and those efforts will be recognised, acknowledged, and rewarded. Encourage curiosity and feedback from customers and employees, and share your efforts and learnings with your business community.

It is important to position your efforts as a journey and not an arrival at the destination. It is also key to share failed efforts – as this is equally part of transparency as wins. A great way to begin in any business is to conduct a materiality assessment and consult with all of your suppliers and vendors to gain an understanding of your supply chain starting point. From there, informed by your business values, it should become simple to identify areas for improvement, and to begin working on these. Do not wait until you feel a job is ‘done’ to communicate it with your audience. Communicate throughout the process.

 

Conclusion

Supply chains are coming under increasing scrutiny by consumers, employees, media and in some cases regulators. Offering transparency around these practices is becoming increasingly expected for businesses and progressively part of purchasing decision-making. There tends to be either a reluctance by businesses to offer this transparency, as a result of fear of greenwashing accusations, or the total disregard for engaging in supply chain management responsibly, as a result of marketing efforts being prioritised over actual values.

It is important for businesses to understand that values-led decision-making around supply chain management and transparent communication with their networks is the only way to genuinely and effectively implement this practice, and to ensure that the tone and efforts always hit the mark.

 

Further Reading

On our Podcast ‘15 Minutes With‘ we had Madison Kranis from Fenwick join us to talk about this topic. You can listen to the episode right here and get some useful takeaway actions to get you started.