Transparency in Supply Chains

Jul 26, 2016 3:35 PM ET

Staying on top of supply chain transparency efforts is tough, and as supply chains become increasingly complex, the tasks become difficult for companies to achieve. There are many factors to take into account when evaluating your supply chain. Aspects of supply chains like, multiple tiers, supplier location, component costs, logistics and more can affect your decisions as a company. It is important to remember for the scalability of your supply chain that transparency is one of the most important factors you can evaluate.

Many determinants come into play when assessing the transparency of your supply chain. One of the most important factors is evaluating your suppliers based on their location. Because they cannot dedicate resources to labor oversight, developing regions of the world have low labor standards and are at risk of unethical business practices going undetected.

FM Global, one of the world's largest commercial property insurers ranked 130 countries on their individual "supply chain resilience." Following up on the report, Supply Chain Digital highlighted the top 10 countries based on the report. The main factors related to assessment were; supply chain, risk quality, and economic factors of the country. The notable flagged countries were Honduras (ranked 10th), Ukraine (ranked 6th), Mauritania (ranked 5th) and Venezuela (ranked 1st). It is important to note that these countries are heavily present in retail supply chains, which puts the retail sector in a large spotlight for supply chain violations. To learn more about retail specific supply chain best practices, click here.

Back in the beginning of July, Source Intelligence teamed up with for their newest modern day slavery webinar that included a detailed section on emerging forms of forced labor plaguing supply chains. As mentioned above, a significant driver behind modern day slavery going undetected in supply chains is the fact that developing countries have a severe lack of labor oversight. A lack of labor supervision allows suppliers' shady business practices go undetected and decreases the transparency of their customer's supply chains.

In an attempt to maintain a high level of transparent business practices in supply chains, large multi-national enterprises can develop policies that suppliers must adhere to before business is done. Companies can develop supplier requirements such as codes of conduct and responsible purchasing policies to maintain transparent work ethics throughout their supply chains.

There is an essential element of supplier data validation that companies must follow up on. Unfortunately, it is easy for a supplier to sign off on a policy requirement when there is no third party validation. Data passed on from suppliers to enterprises, stating their compliance with enterprises' policy requirements needs to be validated by a third party service for many reasons. Experts in the field of compliance and supplier data validation can help companies with this. Source Intelligence has been on the forefront of supplier data collection, validation and reporting since 2009. To better understand the importance of data validation and comprehensive supplier assessments click here to speak to an expert about how 3rd party validation can improve your supply chain transparency efforts.