The Trend That Will Drive Change in Every Supply Chain

Over the last decade, developing a sustainable supply chain has increasingly become a priority for large manufacturers and retailers. Having a formal policy for corporate social responsibility has come to be expected from Fortune 1000 companies, as state and government agencies are now demanding it more and more. However, there’s a groundswell movement that will further accelerate and intensify the scrutiny of all supply chains: the rapidly growing consumer demand for complete transparency.

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It’s no longer enough to just post an official policy on your website that indicates compliance with applicable laws and regulations. Before people buy your products, they want to know what those products (and you) are made of.

More and more, consumers are demanding that every company can track and show them the exact supply chain for every product (and each part of every product) that they are being sold. From the beans used for their morning coffee, to the threads in the clothes they wear, to the metals used to build the components in their laptop, consumers want to know where it comes from, what materials were used, where those materials came from, and the labor used for every step of the process.

The fashion retailer Honest by calls themselves the world’s first 100% transparent company, and provides an inspiring example of where consumer retail is heading, and thus where all business is eventually heading.

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(Source: HonestBy.com)

For each product sold by Honest by they provide a complete trail of their detailed production information from yarn and button origin to fabric and manufacturing details. They even provide a complete cost breakdown of every Honest by product on the site. Every part of the production and distribution process is transparent including the store mark-up calculations.

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(Source: HonestBy.com)

While Honest by is a clear leader in the space, you cannot dismiss this as a small niche. Large retailers are following suit, including the Swedish mega-retailer, H&M. H&M is the world’s largest user of organic cotton and has made sustainability one of their top priorities.

HM
(Source: HM.com)

Of course, apparel is not the only product category subject to scrutiny and opportunity. Historically the computer hardware business has provided very little transparency into where raw materials come from, and in many cases the manufacturers themselves may not have had great visibility into the real source.

As one shining example of how large businesses can take the lead, Intel has made the pledge to make all their processors with conflict-free materials by 2016. Over five years, the Intel supply chain team conducted a massive effort, touring Africa to leverage their purchasing power and put pressure on smelters (where raw ore is refined) to develop and implement an auditing system to track minerals so corporate buyers can source responsibly. As part of the effort they also try to convince other companies in their industry as well as the jewelry industry to join their effort and make the pledge.

Intel
(Source: Intel.com)

As a B2B company, we know that B2C leads the way in defining the buying experience and that B2B will follow. What consumers expect in their individual buying experience is what they will also increasingly demand in their business buying experience, and it is important to continue to heed these trends and deliver the best journey possible at every stage of the buying cycle.