“Now, in the hyper-connected and ever evolving world, transparency is the new power.” - Benjamin Herzberg, Program Lead of Private Sector Engagement for Good Governance at the World Bank Institute
We have so much yet know so little… Okay, that sounded a tad dramatic in an existential crisis sort of way, but it’s true in a very practical way too; we know so little about where exactly most of our daily used products come from. Who makes them? How much were they paid? Our products travel through a large network consisting of retailers, distributors, transporters, storage facilities and suppliers that participated in the design, production, delivery and sales process. And there’s no all-seeing eye that can oversee and keep track of the entire process.
Your customers won’t accept this blind spot in the production process of their goods for much longer: they want full transparency and - though it might seem counterintuitive - you and your partners will only stand to benefit from their higher demands.
Everyone seems to still be talking about the Millenials (I understand, we’re pretty awesome) but there’s a next generation gaining speed in our rearview mirror: generation Z. These are the current teens (I know, not yet pretty awesome), and they expect to be kept in the know even more than their predecessors. The consumers’ mindset is moving from “how do I buy that” to “where did it come from”. In the UK, 30% of consumers are concerned about the origin of the products they buy and a large bulk of them are starting to act accordingly. Moreover, it’s not just consumers that are becoming more ‘woke’ but the government too.The government is asking retailers to lead the way in transparent supply chains. By implementing regulations like the UK Modern Slavery Act, companies will for example be required to disclose ethical information pertaining to the source of their products.
You, as a company, can even attain a competitive advantage for being transparent towards your customers and partners. Transparency has a direct impact on consumer trust and a firm’s sustainability performance. A great example of this principle is John West, a large fish supplier who started coding tuna to enable their consumers to trace their tuna all the way back to the exact fisherman (or woman) as well as location where he (or she) caught it. But wait for it…. This great idea by Mr West (or Mrs. West) added up to an extra 17 million £ in revenue. Talk about making the big bucks whilst keeping it nice and clean for everyone, just like their fish!
But exactly why and how does it benefit your sales? Well, apparently 65% of consumers want to support companies that have a strong purpose and vow to act in the best interest of society. A whopping 28% of consumers even punish companies for what they consider to be ‘bad’ behaviour. So it’s better to keep things above board: the less ethical but easier way might get you the profits you wish to see in the short-term, but if you put in the added effort for transparency now, your consumers will reward you in the long-term.
So, again: the more information you provide to your customers regarding the ethics and origin of the products they buy, the higher competitive advantage you will have against your competitor who can’t or won’t do the same. Good supply chain visibility and traceabilityallows your firm to recall and recover in case something goes wrong (and, let’s be honest: something usually does) as well as provide information to customers and stakeholders about the nature and origin of products. This can build increased levels of trust with your customers about the sustainable performance of your firm’s supply chain.
Transparency is not just important for your relationship with customers: it also shapes the expectations between you and your supply chain partners. The end consumer is concerned about authenticity and ethics of the products they buy, but companies also need reassurance about the goods they procure. Transparency and tracking will be just as indispensable for the efficiency of your supply chain operations as it is for marketing benefits. You’ll need trust both within your company and between your supply chain partners. And blind trust will no longer suffice, it’s that simple.
How to Get the Job Done
Transparency… tracking… trust… that’s all fine and dandy, I can imagine you thinking, but how the heck do I get the transparency level up in my company? Let’s just start with something called ‘Blockchain’ and take it from there.
Nowadays, if there is an organization trusted with overseeing all data, it’s usually kept within one centralized location. This is a great weakness as dependency on one single organization is risky and keeps the door to fraudulent behaviour wide open. Just think of all the food scandals we’ve had in recent years. We’re using a centralized system with a governing third party as the only way to achieve data and transaction transparency in our supply chains. And it’s failing us, badly. Here’s where Blockchain could help us out.
Blockchain uses a global, decentralized and peer-to-peer network to provide an open platform that can deliver neutrality, reliability and security. Today, modern supply chain has a lot of Big data but there’s a lack of trust. Blockchain offers a system where there are permanent and shared records of every transaction that is associated with, for example, a shipment, so it basically creates an unbroken chain of trust. And if there is in fact an issue with a certain type of product, it can be traced back and stopped easily. We’re talking hours instead of days here. It gives a company the ability to better predict when their goods will arrive and in what condition, as well as provide insight into how they can better service their customers. There’s a wide range of benefits linked to blockchain from JIT planning to reduced wastage and beyond.
Get it Straight with Your Stakeholders
As I’m sure it has become abundantly clear by now, it is as important as ever to be super transparent towards all the customers and stakeholders involved in your company practices. Pro Alliance can help you get your inter-company transparency on point by giving you the opportunity to give everyone involved in your supply chain a full overview of the supply chain processes. The platform gives you the ability to map your entire supply chain process with ease. No more backdoor dealings, no more hallway whispers, but everything out in the open.
The supply chain processes can be optimised with a little help from your supply chain friends. And our Big data processes. The combination of both will give you the ability to have a timely overview of all your dealings both within and between trading partners. And all this by the time you’ve said ‘Santa!’. Your flexible and lean supply chain processes will serve your customers to the point where they’ll actually feel its after-effects. By creating more visibility and transparency towards all your stakeholders, they’ll be more trusting and get your efficiency level up, which in turn will result in better customer service and increased sales. Also, by working together, collaborating and making communication between all stakeholders more straightforward, it’ll be so much easier to trace potential issues back to their source and fix them ASAP.
Just like John West and his honest tuna: you can only benefit from it!