The Pandemic Has Sharpened Boardroom Focus
Recent months have shown us the importance of supply chains. In a year of few highlights, the ability for supermarkets to keep shelves stocked and for other vital services to keep going has been heartening. However, conversations are changing as we look to a post-pandemic world. One of these is around sustainability, and it’s interesting to note that even now 65% of business leaders identify sustainability as an even bigger priority post COVID-19.
What was already on the boardroom agenda has become more important. Equally as important is the fact that 83% of business leaders believe supply chains and associated technologies can support sustainability objectives. There is consumer pull too with 70% of consumers now believing trust in a brand is more important than in the past. Knowing how a product is sourced and brought to market is critical to this.
>>Related content: Sustainable Business Practices that Drive Positive Change in Supply Chains<<
Vertical Sector Initiatives Lead the Way
Several vertical sector initiatives are also steering us in this direction. For example, a McKinsey study found that eight out of 10 sourcing executives in the fashion industry plan to publish their companies’ level of transparency on at least tier two level by 2025 in the form of supplier lists.
The cocoa supply chain has been identified in a UN report as “very complex.” The report stated that “tagging raw materials at source is key.” This same UN report also calls out fishing and estimates that just 8% of wild caught fish adhere to the Marine Stewardship Certified guidelines for sustainability.
How can we grapple with these challenges? These are examples of best practice we can draw on.
To take the first, in the UK, Emma Bonar has established 69b Boutique, the “first store dedicated to a better fashion industry” with a vision to bring together socially and environmentally responsible designers. Brands it works with must adhere to a strict policy on transparency and accountability with a commitment to sustainable fashion. In her words, "Our customers rely on us to know where the products that they're buying are coming from."
In terms of the second, Cacaste is a Mexican cocoa butter producer that has developed a close working relationship with a network of growers in Tabasco, enabling trust and traceability in their supply chain. Connecting raw materials at source with a unique digital identity is key as this fast-growing business supplies cocoa to beauty companies from the United States to New Zealand.
Our third example is Greenfish, a seafood business in South Africa committed to ensuring their seafood is sourced from legal fishing operations and traceable back to its point of origin. Every single package includes information about the species, origin and production method.
Data Has Never Been More Important
Each organization works in a different sector with its own individual challenges, but they all share common objectives such as establishing transparency in their supply chains. In doing so, they engender trust with customers.
If COVID-19 has taught those of us working in the supply chain industry one thing, it is the importance of data and applying the insights it gives us to every part of our operations. The more we digitize, the more we understand. It not only makes organizations more efficient but improves the well-being of the planet and those that live in it.
With the introduction of digital identity technologies, it becomes possible to provide traceable identities for every product, enabling transparency from raw materials to end product and beyond. This means moving beyond just focusing on tier one suppliers to suppliers throughout the chain to ultimately empower people as well as products to build a more sustainable planet. In doing so, this offers consumers the highest standards of visibility, safety, education and authenticity possible, while giving businesses complete control over their supply chains.
Transparency Is a ‘Win-Win’
Not only are governments, NGOs and consumers calling for more transparency throughout the global supply chain, but organizations have a vested interest in delivering supply chain transparency. As well as the reputational cost of failing to meet these demands, researchers at the MIT Sloan School of Management found that consumers may be willing to pay up to 10% more for products from companies that provide greater supply chain transparency.
The hope is that 2021 will mark a return to near normality. Organizations will emerge fitter and stronger, having learned some of the lessons of the pandemic and turning these to good use to reimagine their supply chains for the better.
