How Transparency in the Supply Chain Leads to Sustainable SourcingNov 03, 2020
According to McKinsey’s 2019 chief purchasing officer (CPO) survey, sustainable sourcing at scale is the fashion industry’s new must-have. The survey shows that social and environmental sustainability has become a key priority for apparel companies, just as it is becoming an increasingly important issue for consumers and governments.
A transparent supply chain is one where all the parties are sharing information at all stages, from raw materials origin, supplier compliance with CSR, environmental and other standards, to the manufacturing of the products and the product-quality during that process.
Supply chains are complex and there are a lot of moving parts. Tracking all stakeholders and their actions manually is a time-consuming and inefficient process. Only by collecting data at all the different steps, can true transparency be unlocked: Who are my suppliers and my suppliers’ suppliers? Where do they source their products? Are they compliant with all internal & external rules & regulations? How do they manage and control their manufacturing process?
If we take the example of product quality, a lack of transparency can result in additional costs and will have an impact on the environment, as poor quality results in returns, reworks, scrap and additional transportation. On the compliance side, a lack of visibility can result in poor working conditions at factories and environmental damage, which has a huge impact on a company’s brand reputation.
Digitizing a supply chain allows to trace back all the information related to a certain supplier or a certain product, from raw materials to consumer delivery. The resulting real-time, actionable data offers all stakeholders in the supply chain the possibility to identify and manage any supply chain risks, which will ultimately lead to a more sustainable way of sourcing.
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