Transparency in the Supply Chain Becomes More Important for Consumers as Well as Businesses

Following the 2011 earthquake and tsunami in Japan, automakers faced challenges getting enough parts to fulfill their vehicle orders. The technology industry also took a big hit, as so many of our electronics and electronics parts depend on Japanese manufacturers and suppliers. More recently, a South Korean company that manufacturers most of the world’s DRAM memory, used for smartphones, tablets, and other computers, lost one of its two manufacturing facilities located in China in a fire, causing DRAM to skyrocket in price. Perhaps the most notable example of how consumers can be affected by break downs in the supply chain came when Hurricane Sandy ravaged the northeastern United States. These events hit consumers, as well as supply chain managers, where it really hurts. The result is, consumers are now demanding to know more about where the products they depend on every day come from, and to be forewarned when a disruption might leave them without crucial supplies such as food, batteries, fresh drinking water, and other essentials.

According to Forbes, there are other factors driving the demand for transparency within supply chains, such as a desire to be aware of products and foods that are safe, healthy, and environmentally responsible. Some companies, such as Starbucks, have always made information available to the public about where their coffees come from and how they’re processed.

Other companies, such as McDonald’s, have a history of hiding their supply chain. However, these companies are realizing this puts them at a competitive disadvantage, and they’re taking more steps to inform the consumer of where their food products come from and how sustainable and environmentally friendly the practices behind the foods are.

Researchers at the Massachusetts Institute of Technology developed a tool to make it easier for companies to track raw materials and goods through their supply chains. The tool also helps companies keep consumers informed about where their products came from and how sustainable the practices within the supply chain are. The tool, Sourcemap, should also make it easier for markets to rebound after natural disaster, political upheaval, or other supply chain disruption.

Comments

  1. Supply chain transparency can be developed efficiently by linking corporate data to environmental factors by a top down approach. The result is a understanding of the breadth, depth and concentration of suppliers. Using natural capital valuation techniques provides a framework for direct comparison and decision making of multiple resources.

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