Tackling the enormity of supply chain accountability and transparency has gone from a daunting, almost insurmountable task to an automated, reliable, real-time tool for businesses.
New platforms for supply chain identification, mapping and tracking help break down the task into three steps, each providing more data, more transparency and more opportunities as supply chains become transparent. The results are increased trust and accountability, reduced risk and a new level of buyer engagement that drives business.
Please note that steps 1 and 2 are interchangeable, depending upon how much supply chain information is already at hand. Simple mapping (some applications are free) can produce valuable results. Automated surveying adds significant depth to the supply chain map and the accompanying results.
In mapping a downstream supply chain, an electronics recycling company realized they were shipping material to a Tier I downstream vendor that was, in turn, shipping the materials to Tier II vendors that were already Tier I vendors for the recycler. In other words, they had a middle-man that was unnecessary. With this realization, they began separating the material that had been directed there and shipping it directly to the other Tier I vendors that were actually processing it.
The company posted the map on its website for clients and prospective customers to see. Sales leveraged it as a powerful tool to differentiate from other recyclers.
1. Supply Chain Mapping
Armed with available information on current suppliers or downstream recycling vendors, new tools make it easy, even fun (!), to map supply chains. The resulting visual offers a new perspective on material flows, identifies redundancies and provides opportunities for increased efficiency and reduced cost.
- Unnecessary shipping costs eliminated
- Reduced carbon footprint
- Simplified supply chain
2. Supply “Web” Engagement
Today’s supply chains are really not chains at all, but complex webs involving many tiers across the globe. Fortunately, cloud-based solutions simplify communications, enabling continuous improvement for both buyers and suppliers. Instead of only contacting and reporting on the supply chain annually, users have a fully networked communication system with up to date information at their fingertips.
Supplier surveys are often gamified, which simplifies and stimulates engagement. Survey scoring visibility among peers encourages competition for continuous improvement. If a supplier is being asked something they’ve already answered on a system, even if it was for a different buyer, the survey will open pre-populated with that information. Keeping it fun and simple is key.
- Risk avoidance/brand integrity
- Prevent counterfeit parts
- Avoid conflict minerals
- Ensure responsible recycling
- Product certification conformance
- Responsible sourcing
Walmart conducted a pilot using a blockchain solution to track pre-packaged, sliced mangoes to their source. Originally, the task took the food safety team 2 weeks. With the blockchain tracking solution in place, it took 2.2 seconds. Imagine the thousands of foodborne illnesses that can be prevented.
“We’ve been pursuing the holy grail of traceability and transparency [at Walmart] for 20 years. With blockchain and smart devices in every farmer’s hand it can be done today. 10-years ago it was an idea before its time, but it’s totally doable today.”
-Frank Yianis, VP Food Safety, Walmart
3. Material Tracking
Identifying the supply chain and establishing communications sets the stage to track material flows in real time.
The newest solutions for material tracking are built on blockchains, the new technology bringing a new layer of trust to the web. Originally developed to validate Bitcoin transactions, blockchains are now being used to validate all types of transactions, including those in supply chains. These are cloud-based, shared, cryptographically-unalterable ledgers that record the history of transactions.
Solutions providers have developed simple user interfaces, usually via cellphone, enabling every node in the supply chain from the mine or the farmer to the finished product manufacturer to engage.
- Increase trust, accountability and transparency across business networks
- Brand owners can share their products’ journey allowing buyers and consumers to look beyond the label for information on origin, journey and impact
- Proven authenticity, guaranteed quality, responsible production
- Tracking material flows in real time and knowing who is responsible at each stop along the way can save millions, if not billions of dollars in product recalls and other product quality issues
- Manufacturers know exactly where parts and materials that have been ordered are and where any glitches in on-time delivery occur
- All of the benefits of supply chain engagement (above) are greatly enhanced by replacing trust with transparency
TransparentPlanet is a consultancy working with solutions providers and brand owners to close the chasm between technology and sustainability. For help getting started with the 3-steps to supply chain accountability, contact LRoman@TransparentPlanetLLC.com