In this information age, it is difficult to hide things that you want to remain discovered. This holds for businesses and individuals alike. Consumers, investors, and activists increasingly want to know about the product they buy. There is now a demand for a more transparent supply chain.
Supply chain transparency means being able to see, exhibit, and track a product- right from the components and raw material suppliers through the manufacturing process, through the logistics of distribution and warehousing, till it reaches the end-user. The primary purpose of having a transparent supply chain is to ensure that the products supplied have adhered to definite quality, ethics, and safety standards.
Benefits that supply chain transparency offers
Supply chain transparency is critical to modern success; however, very few companies have attained complete visibility in the supply chain. The issues existing within the supply chain go back to the problems in tracking shipments once they are shipped to consumers. However, B2B consumers demand more supply chain visibility. To stay competitive in today’s world, business managers need to understand the benefits of boosting supply chain transparency to improve overall success.
Maintaining transparency throughout the supply chain results provides various advantages for companies, distributors, vendors, consumers, and even partners. Here are the benefits of a transparent supply chain-
Digital/Paper train for responsible practices
Today, a consumer wants to be sure of the brands and companies he is doing business with are being socially, environmentally, and fiscally responsible. One of the best ways to show this is by having a transparent supply chain. Startups can provide verifiable data that give understandings on sustainability, outreach, and impact and share that information with the public as proof that the organization is doing the right thing.
The risk reduces with traceability
By maintaining and ensuring a source’s visibility and working directly with vendors, startups can almost entirely eliminate the risk. An effective risk management strategy includes maintaining an overview of the entire supply chain from starting to the end. Companies must know where a component is coming from, how it is assembled and packaged, stored and transported, and lastly, when it gets delivered and to whom. With full transparency, companies can know exactly when, why, and where things went wrong. An item can be recalled even before it makes it to the store shelves, and afterward, to the customer- and fix the issue before it gets worse.
Efficiency in operations
Companies can identify the bottlenecks and slow processes in the entire supply chain with improved visibility and traceability. This information allows the companies to act by either improving the process in question or obliterating it. By eliminating unnecessary steps and validating vital processes’ efficiency, companies can optimize the entire chain from development and garnering to distribution. With an improved workflow price of products can be smoothened, and volatility can be eliminated in the market, just by extenuating the need for third-party vendors and middlemen.
Increase financial advantage
Transparency in the supply chain plays an increasing role in the decisions made by bankers, investors, and insurance companies. In today’s times, startups are more likely to get investments and favorable rates if they divulge social and environmental information about their supply chains.
Eventually, businesses that prioritize responsible practices demonstrate that they understand the evolving market trends, their likelihood of earning revenue to maintain a viable business, and their ability to adapt to new requirements- all things that bankers, investors, and insurance companies prefer.
Retain, engage and attract employees
Nowadays, employees place a high value on sustainability. Organizations that demonstrate responsible practices and visibility as core principles of their business are more likely to retain and attract talent. Such businesses provide their employees with more than just a job, a sense of pride.
A transparent supply chain helps ensure that a company is doing the right thing or is trying to do the right thing. However, achieving transparency in the supply chain is neither cheap nor easy. It can be an overwhelming task for manufacturing companies. The material may travel from several global locations, and with various labor laws and regulations in place, the product’s route to market becomes a bit complicated. Nevertheless, the benefits of a transparent supply chain are many.
Supply chain visibility reduces the reputational risk and enhances the standing of the company as a trustworthy organization. Moreover, there are operational benefits. By gathering more detailed information on supply chain performance, companies can identify opportunities for improvement, mitigate unnecessary intermediaries, and plan more effectively over the long term.