Why must companies pull back the curtain on their supply chain?

Hidden supply chains are pushing sustainability-conscious consumers away from brands that are unable to ensure a product's creation and distribution is built on sustainable practices and ethical labour…

Theatre Hex

Imagine you could fit every aspect of your business’s supply chain onto a West End stage. Manufacturing, distribution, importers and exporters, materials, labourers – all of it packed into one giant (and probably quite noisy) space.

On the other side of the curtain are your consumers, waiting to see the show. Some of them have popcorn, maybe a couple have those little glasses you’d find at the theatre. They’re going to be scrutinising every aspect of how your business creates and delivers the goods you bring to market.

Would they be impressed with what they saw when the curtain comes up?

If you don’t know the answer, know this: 31% of consumers said they would no longer shop with a brand if they found out they used unsustainable practices, according to the CGS 2020 Retail and Sustainability survey. And here’s the kicker: just 23% of American’s believe brands offer enough visibility of their sustainability initiatives, while 16% of Brits feel the same – a number that is set to rise.

The same study highlighted that the COVID-19 pandemic has changed our shopping behaviour for good. Only 45% of respondents said they would return to in-store shopping, while 41% said they would only shop online. Customers are seeing e-commerce as a new normal, but in doing so they have another barrier between them and vital product data.

If companies aren’t showing that they deliver goods ethically and sustainably, a vast section of the population isn’t interested. Retailers can’t sit in the wings – they need to know every inch of their supply chain, and convey this effectively to their consumers.

Why is revealing a brand’s supply chain necessary?

Just take a look at a company that’s already pulled back the curtain on its supply chain. Apparel retailer Patagonia doesn’t just outline its environmental impact at every step of its manufacturing journey; it shows how it is actively supporting social responsibility programmes to promote change where it works.

This is exactly what environmentally conscious consumers want to see, and it's clear they respond to this kind of clarity. Researchers from the MIT Sloan School of Management found that consumers may be willing to pay 2% to 10% more for products from companies that provide greater supply chain transparency.

Businesses must be prepared to shine the spotlight on their supply chain. If the supply chain is left in the wings, this will only increase scrutiny in the long run – not just from consumers, but governments, environmental organisations and stakeholders.

Being caught out can create a massive dent in a company’s reputation. In the past, brands have been spotlighted for using cheap labour in foreign countries, exposing workers to appalling human rights abuses to save money.

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Others have received bad press for contributing to global deforestation: Between 1990 and 2016, the world lost 1.3 million square kilometres of forest, according to the World Bank – an area larger than South Africa.

Countries are also taking action to compel brands to boost their supply chain visibility. Under the UK’s Modern Slavery Act, any organisations with a budget of £36 million or more are required to report on steps they are taking to ensure slavery and human trafficking don’t play a role in their business.

Meanwhile, under the Paris Agreement, the majority of countries agreed to limit carbon emissions to a level that keeps the global temperature rise below 2°C. Businesses must show they are doing their bit to stem their polluting practices, lest they end up paying the piper (i.e. the taxman) in years to come.

Why businesses need product data to bring their operations out of the shadows

With all these reasons for boosting supply chain transparency, why is it that some companies have yet to pull back the curtain on their operations?

Perhaps they are worried that they’ll lose a competitive edge if they reveal their hand to competitors. Maybe the short-term return on investment isn’t worth it. Or perhaps they don’t have an accurate, consistent way to collect product data and keep an eye on the furthest links of their supply chain.

Day by day, the first two reasons are losing out to the weight of consumer pressure. However, the third thing is something that businesses must do something about. Product data is at the heart of supply chain transparency, and it is crucial that businesses understand how they can build an effective PIM strategy.

Companies need to know where their products came from and give evidence for this, so that they can prove they comply with regulations and consumers know they can be trusted. They need a solid, robust product information management system - one that tells a single version of the truth.

Amplifi work with leading PIM vendors to develop strategies that will give you a comprehensive overview of your supply chain, allowing you to track goods across your entire operation, ensure the materials and labour you use are ethically sourced, and tell the world that your company isn’t one of the bad guys.

With Amplifi’s PIM solution, you’ll see a whole range of benefits to your supply chain, including:

  • A single unified source of data to help you maximise supply chain transparency
  • A more pleasant customer and business experience
  • Better commercial business outcomes
  • Reduced costs and improved margins

Companies must be prepared for their supply chain operations to take centre stage, but to do that they need to be able to effectively track product data. So, pull back the curtain today: contact our team and we’ll show you how we can provide a data management software solution to revolutionise your supply chain.

To find out more about why data is so important for your supply chain transparency, download our guide How Well Do You Know Your Products? or speak to one of our team by emailing [email protected].

How well do you know your products?

In this guide, created in partnership with inriver, we look at the specific product data challenges brands face when it comes to Rules of Origin and Sustainability.

Also, Johan Boström, Chief Product Officer of inriver, discusses the reasons businesses benefit from better product management.

Download Guide