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In this information age, it’s hard to hide what you want to keep private. This applies to both companies and individuals. Consumers, investors and activists increasingly want to know more about the product they are buying. There is currently a demand for a more transparent supply chain.
Supply chain transparency means that the product can be seen, shown and tracked – from component and raw material suppliers through the manufacturing process, distribution and warehouse logistics to the end user. The main purpose of establishing a transparent supply chain is to ensure that the products supplied meet certain standards of quality, ethics and safety.
Benefits of transparency in the supply chain
Supply chain visibility is critical to modern success, but few companies have achieved full supply chain visibility. Problems in the supply chain can be traced back to difficulties in tracking shipments once they are delivered to the consumer. However, B2B customers are demanding more transparency in the supply chain. To remain competitive in today’s world, leaders must understand the benefits of increased supply chain visibility to improve overall success.
Maintaining transparency throughout the supply chain has many benefits for companies, retailers, vendors, consumers and even partners. The benefits of a transparent supply chain are as follows
Digital/paper training for responsible practice
Today’s consumers want to be sure that the brands and companies they do business with are socially, environmentally and financially responsible. One of the best ways to demonstrate this is to implement a transparent supply chain. Start-ups can provide verifiable data that gives insight into sustainability, reach and impact, and share this information with the public as proof that the organization is doing the right thing.
Risk decreases with traceability
By maintaining and ensuring transparency of supply sources and working directly with suppliers, start-ups can virtually eliminate risk. An effective risk management strategy involves monitoring the entire supply chain from start to finish. Companies need to know where the part comes from, how it is assembled and packaged, stored and transported, and finally, when and to whom it is delivered. Full transparency allows companies to know exactly when, why and where something went wrong. The product can be recalled before it hits store shelves and then sent back to the customer so the problem can be fixed before it gets worse.
Companies can identify bottlenecks and delayed processes throughout the supply chain with improved visibility and traceability. With this information, companies can take measures to improve or eliminate the process. By eliminating unnecessary steps and testing the efficiency of key processes, companies can optimize the entire chain from development to capture and distribution. With improved workflow, product prices can be smoothed out and market fluctuations eliminated simply by reducing the use of third-party vendors and intermediaries.
Increase in financial benefit
Supply chain transparency plays an increasingly important role in the decision-making process of banks, investors and insurance companies. Today, start-up companies are more likely to win lucrative investments and contracts if they disclose social and environmental information about their supply chains.
Ultimately, companies that promote responsible practices demonstrate an understanding of market trends, the likelihood of generating revenue to sustain a viable business, and the ability to adapt to new demands – all things that bankers, investors and insurance companies prefer.
Retaining, attracting and engaging employees
Employees now attach great importance to sustainable development. Companies that make visibility and responsible practices their core business principles are more likely to retain and attract talent. These companies offer their employees more than just a job, they give them a sense of pride.
A transparent supply chain ensures that the company is doing, or trying to do, the right thing. However, supply chain transparency is neither easy nor cheap. This can be a challenge for manufacturing companies. The material can come from different parts of the world, and with different labor laws and regulations, the path from the product to the market becomes a bit tricky. Nevertheless, the benefits of a transparent supply chain are numerous.
Supply chain transparency reduces reputational risk and increases a company’s credibility as a trusted organization. There are also operational benefits. By collecting more detailed information about supply chain performance, companies can identify opportunities for improvement, reduce unnecessary middlemen, and plan more effectively over the long term.
What’s your opinion?
In the fire.
frequently asked questions
Why is transparency in the supply chain important?
Transparent supply chains also reduce reputational risk and enhance a company’s credibility as a trustworthy business. … Collecting more detailed information on supply chain performance helps companies identify opportunities for improvement, such as unnecessary middlemen, and plan more effectively over the long term.
What does supply chain transparency really mean?
True supply chain transparency means transparency and traceability, not only at the product or trade level, but also at the supplier, raw material and worker level.
What does transparency mean in supply chain coordination?
Transparency, safe visibility: Accurate identification and data capture throughout your supply chain. Disclosure: Communicate this information internally and externally at the required or desired level of detail.
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