Most supply chain managers realize the importance of transparency, but finding the best ways of achieving it can be a difficult task. A recent study from the University of Tennessee Haslam College of Business’ Global Supply Chain Institute examines six practices that can help businesses leverage supply chain transparency to maximize profits. Here is a brief look at each one. The entire study can be viewed on The Global Supply Chain Institute’s website.
Focusing on Sustainability
Sustainability must be viewed as a driver of business. Even if it’s not possible to fully institute a sustainability plan right away, outlining a set of goals is vital. Employees and consumers alike are increasingly looking out for firms that embrace sustainability.
Creating a “Culture of Transparency”
Businesses need to develop a culture of transparency within their organization, and every employee needs to know their role within the firm’s vision of sustainability. This transparency must extend to customers, too. The business’s leaders need to exhibit transparency when interacting with industry groups, academia, and the community at large.
Forming Partnerships with Sustainable Suppliers
The traditional criteria used for choosing partners of reliability, quality and cost are no longer enough; sustainability should be given equal consideration, if not more. The report suggests using sustainability capability as an element in the total cost of ownership (TCO) assessment for supplier decisions. It can be useful to ask suppliers to provide a self-assessment of their business, environment, safety and labor practices and get an audit from an industry supply chain certification body.
Modern consumers want to know exactly where their products come from, and being able to supply that information can set a brand apart. Brands that cannot trace products in the aftermath of environmental or safety violations could suffer irreparable harm to their reputation.
Finding the Transparency “Sweet Spot”
While transparency is vital, publicizing certain partnerships can compromise proprietary business information, which is why it is important to find a sweet spot that engenders trust among suppliers and consumers.
Consulting Outside Auditors
Companies must carry out their due diligence when choosing partners, but even their best efforts will be unable to match the in-depth look that sustainability coalitions can take.
This blog post was based off of an article from The University of Tennessee, Knoxville. View the original here.