April 29, 2021
Supply chain transparency wasn’t an important consideration traditionally, and supply networks were opaque by default. There was much to lose and little to gain by disclosing supply chain info – or so the suppliers believed. Why? For one, the particulars could potentially hurt their competitive edge or draw customer ire. For another, it was hard to collect and manage details from every individual link in the supply chain. The ROI, at least traditionally, didn’t work in the suppliers’ favor.
The state of affairs has changed completely in 2021, though. We live in an era of conscious consumerism and information sharing. The modern-day consumer – B2B or B2C – has high standards. They expect speed, clarity, and lightning-quick communication from their vendors. Further, they’re great advocates of sustainability and ethical business practices. Many millennials and zoomers (Generation Z) refuse outright to do business with “inauthentic” organizations. All in all, consumers want suppliers to be more visible about how they do things – for the sake of both their personal convenience as well as the greater good.
It’s not just customers that suppliers have to please. Governments worldwide are also tightening up rules and regulations around transparency. For instance, shipments are being screened more thoroughly in US ports and shipments without origin-related documentation. Some questionable sourcing practices – like forced labor – are being banned outright.
Essentially, suppliers now have little to gain and much to lose by keeping their supply chains opaque. It helps that transparency is no longer difficult to implement. Recent technological breakthroughs like the Internet of Things (IoT) and automation allow for easier information collection and sharing; at reduced prices. Further, supply-chain logistics practices are mostly standardized, now, and replicated everywhere and there aren’t many secrets left to disclose. Overall, the ROI for transparency now works in the suppliers’ favor.
The customer experience (CX) is the measure of how much a customer enjoyed doing business with you. Transparency in the supply chain goes hand in hand with customer happiness and can greatly improve CX:
The more expectations your business meets, the more satisfied your customers. Here are three relevant statistics related to customer expectations and transparency to consider:
By making your supply chain transparent, you’ll be better able to live up to the changing consumer standard.
Supply chain transparency, when implemented correctly, allows for stress-free tracking from point A to B. Customers can track the shipment on their smartphones or computers at the touch of a button, via an app or web browser – à la Amazon. It’s convenient and useful. In the case of bulk materials suppliers, customers can potentially track shipments from source to production to delivery.
For example, say a construction company orders concrete for the foundation of a building from a ready-mix concrete company (RMC). The RMC has to produce the concrete, so it orders a shipment of aggregate from a quarry. The aggregate ships out from the quarry to the RMC, is turned into concrete, and is finally delivered to the construction company. The construction company can trace and log the movement in real-time from point A to B.
Transparency fosters trust and confidence in your company. Would you rather use a supplier with an opaque supply chain or a transparent one? It’s an easy decision to make. The former supplier is generally someone who’s using a paper-based process and relies on outdated technology to communicate or validate orders. The latter supplier uses the latest technology to share relevant details with the customer and is extremely convenient to work with. Clearly, companies with transparent supply chains can more easily attract and retain customers.
If customers can see into your supply chain, it lets them make better business decisions. They can accurately track the movement of materials, for example, and be prepared for disruptions. If there are defects, customers can trace them back to the source quickly, with little hassle. Further, they can time their operations to deliveries, make better logistics decisions, and generally operate more efficiently. Knowledge is power, and a transparent supply chain benefits everyone it connects immensely.
A transparent supply chain is a big resource saver for your customers. They don’t have to keep following up with your company for every new order manually. Further, the ability to see aspects of your supply chain allows them to fine-tune their processes to match. Also, a transparent supply chain is generally faster than a traditional one. Many companies are penalized for delays if they don’t meet production schedules – but that’s less of a concern if you can accurately forecast incoming orders. All this makes the customer’s business more efficient, reduces write-offs, and saves manpower. It helps with their bottom line, which benefits you indirectly.
A transparent supply chain allows you to provide a better quality of customer service. You can automate some key ordering and returns tasks. If you end up delivering a product or material with defects, you can trace it back to the source quickly to nip the problem in the bud. If an order has been held up, you can quickly identify the cause of the disruption and clear the hold-up. Customer queries are easier to answer and feedback easier to apply.
As technology keeps advancing and supply chains become digitized, transparency will become more relevant than ever.
According to the MIT Center for Transportation and Logistics, every transparent supply chain has two elements:
You can use sensors, gadgets, and software or apps to automate data collection. It’s the most cost-effective method. What about the information you should share? It depends on the nature of your business. Besides what the regulations dictate, every company has a different “sweet spot” when it comes to transparency.
You can team up with SR to make your supply chain more transparent. Our solution allows you to collect and share real-time data on your bulk materials stockpiles. You can measure all your piles accurately in near-real-time with the help of fixed cameras, drones, and a unique iPhone app. You can then feed the information to your system or app and share it with everyone relevant – from your partners to your vendors. To learn more about how we can assist in making your unique supply chain more transparent, get in touch with our company representative for a quick consultation.
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