Supply Chain transparency

Furthermore, in a world where consumers are making their buying decisions based on environmental and social justice issues, having a clear supply chain inculcates a sense of trust in the company's brand.

Needless to say, as long as the goods were on the shelf, very few people put much thought into what went into getting that merchandise into the customer's shopping cart. At least, that was the old reality. For the past couple of decades, increased global awareness has placed companies in the position of having to strip away the opaque veneer that has typically shrouded supply chain logistics.

Many businesses are now going to great lengths to identify each component of their supply chain to ensure that it represents the values of a conscientious buying public. As well as relying on the traditional method of company valuation, the profit and loss statement, companies have to add value in terms of environmental, social and governance standards that reflect the sustainability of the firm's operation.

Understanding that consumers are likely to vote with their feet should a company's supply line be cloudy, producers are being proactive in eliminating suspect sources. Consumer awareness of these efforts adds flavor to the marketing pie.

Towards that end, how can you measure levels of transparency, and what are the milestones that serve to mark the path towards complete transparency?

When it comes to transparency in supply chains, this development goes against long-held beliefs that supply chains are not meant to be transparent. After all, revealing such information can lead to a loss of competitive advantage, which explains why the process of transparency can appear on a glacial pace with some companies. Likewise, metrics to evaluate upstream supply chains do not exist or are not collected during the normal course of business.

Consumers want to know the origins of the products they buy, so companies must develop ways to meet customer expectations. Transparency can be delineated and measured across the entire supply path to gauge the depth of interaction, and companies can unveil successful milestones on the path to complete transparency.

The former approach seeks to identify and quantify all aspects of the supply chain to include suppliers and their labor practices used in the production of your products. The latter measurement indicator allows for the release of information that provides consumers with the provenance to showcase that products are ethically sourced. 

Thanks to advances in AI and other technologies, companies are better able to map out all aspects of its supply chain and provide that proof to a concerned buying public.

Perhaps the most important consideration to remember when discussing the level of transparency in a company is an understanding that the process is an ongoing endeavor. Indeed, consider transparency on a continuum with plenty of room to consistently improve your supply chain transparency game. Towards that end, the following are elements that comprise the bedrock of transparency in business transactions.

1. Data collation. Companies must begin the process of collecting actionable data as part of their reporting process regarding practices and procedures of suppliers as it applies to the entire supply chain of the company. 
2. Action on findings. Once this data is accumulated, the company must decide to engage to resolve specific issues that emerge from the information. For instance, if the information reveals that a company's supplier ignores environmental risks or unfair labor practices, the company can seek out other suppliers or demand changes to continue existing business relationships. 
3. Long term commitment to transparency. Finally, the firm looking to transform its supply chain then must develop a reporting mechanism to educate its customers on the efforts made to guarantee ethical production practices.

In a buying environment where consumers demand social and environmental accountability, offering a transparent supply chain that is readily available for inspection is an excellent way to inculcate a sense of trust with a skeptical buying public. In fact, as a ready-made advertising tool, shrewd corporate managers are building transparency into their brand name successfully.

Getting ahead of public opinion is a huge marketing advantage for companies looking to expand its message, and transparency is a winning topic with the consuming public. That being said, however, full transparency works against the grain of competitive advantage, and implementation can be a complex and costly endeavor. Increasingly, company decision-makers are coming to the belief that this additional cost is part of the new normal in corporate governance.