Consumers increasingly desire brands that are socially responsible and operate a sustainable business model, as well as demand transparency in supply chains. This trend has grown as more companies must comply with regulations regarding sustainability and ethical standards.
Companies such as Patagonia are joining this movement by investigating where their raw materials come from and making sure suppliers adhere to sustainability standards, helping prevent crises such as the Melamine Scandal from unfolding.
Transparency is a key aspect of sustainable supply chains. It involves sharing information openly about a company’s products and processes with internal and external stakeholders – including customers – in order to demonstrate commitment to sustainability, human rights, and building trust among customers.
Today’s consumers demand transparency from the products they purchase. They want to know which ingredients are in their food, where their clothing was manufactured and its environmental impacts. Furthermore, consumers will pay more for goods with an ethical supply chain.
Companies must be able to communicate effectively with their suppliers, maintain transparency in supply chain operations, and detect any ethical violations within their supply chains. This requires creating an environment of trust between employees and suppliers as well as clear guidelines on working together. A descriptive analysis of publications related to this topic indicates an increase in articles covering this area over time as well as their distribution across numerous journals with different industry foci (Table 1). It also highlights an ongoing shift from ecological aspects of sustainability toward social ones.
Consumers increasingly demand businesses operate ethical supply chains. They want to know where their products come from, whether they use sustainable materials and whether workers are treated fairly. Consumers also expect companies to promote their social responsibility initiatives on their websites and promotional material – an example being Better World Books from Mishawaka Indiana who demonstrate this dedication by donating books with each purchase – providing customers a way of showing support for ethical business practices.
Businesses bear a great responsibility to uphold transparency standards, especially given that failing to do so may result in fines from both governments and customers. Thus, supply chain transparency has become a top priority among executives; many see it as an opportunity to boost business and gain competitive edge while at the same time saving money by cutting wasteful practices and streamlining processes.
At a time when environmental and social responsibility have become mainstream concerns, ethical sourcing must become a top priority. Consumers want to know exactly where their products come from and how they were manufactured – many will even pay extra for ones with a green stamp of approval or made using ethical manufacturing processes. This trend toward transparency dates back to Upton Sinclair’s The Jungle (1901), which exposed an astonishing level of corruption within Chicago meatpacking at that time.
An integral component of an ethical supply chain is understanding your supplier base. Companies must identify all of their suppliers, from those on the first tier down. Doing this allows companies to quickly detect instances when one has not adhered to ethical codes set out by them and take swift measures to rectify the situation.
Transparency also has financial advantages to building an ethical supply chain. Companies benefit by cutting costs while improving quality; consumers also prefer products sourced ethically and sustainably and may pay more.
An efficient supply chain helps companies adhere to regulatory standards and avoid penalties for violations, particularly for companies dealing with international suppliers who might be less inclined to adhere to ethical practices. Achilles supplier management solutions allow organisations to identify these suppliers and check if they’re following ethical codes at every level of the supply chain.
Transparency in supply chains can be a difficult and challenging endeavor, yet essential for sustainable business practices. A growing awareness of sustainability has seen businesses adopting circular business models, where packaging materials from manufacturing or even finished products themselves are reused or recycled in order to reduce waste and resource consumption. This practice greatly reduces resource waste.