4 Benefits of Supply Chain Transparency


4 Benefits of Supply Chain Transparency

"The fact that consumers nevertheless care about ethics and authenticity is indisputable: Provenance is already a big deal—and getting bigger." -- Harvard Business Review (2010)

Ten years ago, companies focused on the benefits of supply chain transparency might have had an edge on the competition. 

Today, however, that edge has narrowed. In this ethically-conscious consumer culture, transparency is the norm. Without it, progressive competition already has us beat.

How can we reap the benefits of supply chain transparency?

We'll look at what supply chain transparency entails and how it differs from supply chain visibility. Additionally, we'll explore four key benefits of supply chain transparency and how you can achieve it.

What is Supply Chain Transparency?

Supply chain transparency is a set of clearly stated and factually backed statements about a company's supply chain operations, made available internally and externally.

Matters of interest include product quality and safety standards; raw material sourcing; ethical labor practices, environmental protection and sustainability.

In essence, supply chain transparency is the best way to build trust between suppliers, companies and customers.

However, trust, and the benefits of supply chain transparency, won't come without visibility and reliable data; and today's customers won't give companies the benefit of the doubt if they cannot produce detailed information about their product's history.

Transparency Vs. Visibility

Although these terms seem interchangeable, there is a difference between transparency and visibility important enough to consider both separately, and in relation to each other. 

Supply chain visibility is the ability for business partners to share information up and down the supply chain, including:

  • Daily production activities
  • QC inspection reports
  • Corrective and preventive actions
  • Factory audits
  • Labor conditions
  • Raw material sourcing information
  • Compliance and certification assurance

Successful supply chain visibility puts all responsible parties on the same page internally for greater overall efficiency. To read more about the importance of supply chain visibility, click here.

Transparency is an external process, offering manufacturing details of interest to the public.

Transparency is a vital way to be open about quality and safety measures during production: and it allows you to highlight ethical success stories and their benefits shared across your supply chain. 

4 Benefits of Supply Chain Transparency 

1. Customer Assurance 

Once you've proven to yourself that your supply chain is ethically-based, it's beneficial to make the news public.

Above all, customers have a right to know exactly where their products are coming from and how they are made. Safety and quality should never be doubts in a customer's mind--at the point of purchase, or throughout the product's lifespan. 

Additionally, customers feel empowered by purchases in line with their own values. 

2. Brand Loyalty

Customer retention is the gold standard for real profitability in business. A 5% customer retention rate can increase profits by 25-75%. 

Furthermore, a long-standing, enthusiastic customer base can generate generous word of mouth through social media.

Brand loyalty means that your logo is being worn or used conscientiously by your customers; and that your toy products are being recommended parent-to-parent. 

3. Stronger Partnerships

Customers aren't the only followers of consequence.

When you can establish your brand as a top-notch organization, you will inevitably attract top-notch suppliers eager to do business in like-minded ways.

In some cases, you may discover worthy suppliers looking to raise their profile. They can do so through greater supply chain communication, QC data sharing, and quality and compliance training. 

When worthy suppliers receive the recognition they deserve, entire industries benefit. 

4. Rising above the competition

When you and your supply chain show the world proof of quality and integrity in action, you will effectively gain a competitive advantage through responsible action. 

Whether you are working to bring sustainably-raised meat to the market, or you want to fight against the use of child labor, your company's uncompromising choice of suppliers can be an effective catalyst for change.

Transparency has the same power of publicity and exposure that human rights groups can bring to the fore--such as the pressure put on cotton harvesting practices in Uzbekistan.

A sweeping change like this will convince even the most cynical manufacturers that ethical standards can still be profitable; and more importantly, it will root out operations absolutely resistant to change. 

For global industries reliant on lengthy and distant supply chains, there are still major improvements to be made, as well as new ways to make these improvements! 

4 Effective Ways to Achieve Transparency

  1. Shared data 

Ensuring transparency across your supply chain cannot happen without internal visibility. Concrete ethical claims will sink you without factual support.

Once you've established clear oversight of your supply network, as well as their quality assurance (QA), quality control (QC) and compliance process, you can begin to turn risk into reassurance--that your suppliers are following all applicable quality and compliance standards.

Today's supply chain management software includes features specific to quality Testing, Inspection and Certification (TIC); and can tie together scattered QC data and disparate management systems into one accessible platform. 

Additionally, real-time alerts and inspection monitoring will shine a light on current production results.

Finally, the production history of merchandise can be tracked, from its origins to the shelf or table, so you can be sure that raw materials were sourced appropriately, and food was grown sustainably.

  1. Standardized processes 

Defining standardized inspection processes that all suppliers and inspectors can follow is a very efficient way to achieve supply chain transparency. Your operational workflows should include some preparation instructions, a code of conduct, documentation and your checklists. Supply chain mapping

With TIC-specific software, you can easily map your supply chain beyond your tier-1 suppliers and make sure all downstream subcontracting has been authorized and accounted for. Compliance statements can be stored, maintained and accessed when necessary.

  1. Supplier scoring

Visible scorecards can also be maintained on your suppliers and production runs so that shareholders and future business partners can better understand potential risk areas within the supply chain.

How Can QIMAone Help?

QIMAone’s quality management software can help you to first, establish internal supply chain visibility; and then, leverage it into complete transparency for your customers, stakeholders, potential suppliers and your industry at large.

We can enhance your current supply chain management system with TIC-specific features that will consolidate your quality and compliance data into one easy-to-access format, so all responsible managers can stay up to date on daily production activities. 

Finally, with product- and raw material-quality-monitoring, you can make sure that all ethical sourcing, environmental and labor standards are being followed to the letter. That's supply chain visibility with benefits!

Visibility is the backbone for transparency, and transparency is the backbone for trust. QIMAone software aims to ensure both.

Want to see how it works?

Learn more about QIMAone applications by scheduling a demo today.

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