How transparent is supply chain transparency?

By publishing your supply chain information you send a strong message about the integrity of your company’s operations and your commitment to corporate accountability. However, not all brands provide that high level of transparency.

Clothing brands including Urban Outfitters, Primark and Armani Gift recently received 70,000 signatures calling for greater supply chain data transparency. Led by Human Rights Watch, Clean Clothes Campaign and the International Labor Rights Forum, the #GoTransparent campaign urged consumers against supply chain secrecy, calling it a ‘huge red flag’.

But this trend for transparency isn’t limited to the fashion industry.

Part of the issue is the varying degrees of openness in the supply chain. In the food industry, high-level transparency means an organic, farm-to-fork approach, where companies let consumers know how products are sourced, processed, distributed and packaged. In fashion, it means letting the public know who farmed the cotton, dyed the fabric and stitched the material in their clothes. And in pharma, it means ensuring the security, compliance and authenticity of a product throughout its life cycle.

In these situations, direct relationships with suppliers are essential. Materials must be traceable back to the farm or factory, leaving no ‘dark’ gaps in the journey to market. Where consumers are willing to pay for that clarity it gives the business a clear marketing strategy and a competitive edge.

At the lower end of supply chain transparency we find companies operating in competitive markets with no desire to reveal their suppliers. But the story doesn’t end there. Some companies actively hide the details of their complicated, low-cost, non-compliant supply chains.

While many consumers are wholly invested in the idea of clean, green, ethical products, not all are willing to pay the price tag that comes with it. This leaves companies in a difficult position.

Pricing information confidentiality can be an excuse to conceal dubious supply chain activity. On the other hand, no business wants to lay bare its profit margins or risk connecting its customers directly with its suppliers.

As well as fair financial policies, consumers expect companies to provide fair employee policies throughout the supply chain. However, supply chain transparency does not always equate to workers’ rights. According to research by New York University’s Stern Center for Business and Human Rights, the end results are often overlooked: ‘Transparency is too often treated as an end unto itself; companies are rewarded simply for the act of disclosing, rather than delivering particular outcomes.’

The very goals of supply chain transparency can be at odds with one another. Suppliers recognise the need for a synchronised end-to-end supply chain, but they can be reluctant to lose their control and influence within the chain.

So is there a happy medium? There is, and it’s all about building relationships, high levels of trust and clear communications. It’s also dependent on the buyers. Supply chain openness is rarely an option in a low-cost-at-all-cost set up. However, buyers in fairer pricing environments, with the means to add social responsibility to their sourcing criteria, will have the means to develop a more transparent supply chain.

As Ecovadis-accredited, Sedex and Global Compact members, Adare International only work with vendors who meet compliant supply chain sourcing standards. To find out how we can help you make your supply chain more transparent, get in touch today: hello@adareinternational.com.

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