3 Ways Retailers Can Make Their Supply Chains More Transparent, Sustainable and Compliant

Who cares about supply chain transparency?

Today’s consumers. In addition to great deals, readily available products, and seamless shopping experiences, they also want to be informed about the products they purchase. They want to know where their items come from, how they were made, who made them, and under what working conditions.

According to one analysis, 70 percent of consumers want to understand how a brand addresses social and environmental issues, and nearly half consider these factors when making purchasing decisions.

This is especially true for Gen Z and millennial shoppers.

The Harvard Business Review reports, “When Gen Z and millennial customers rate a brand highly on humanity, they are 15 percent more likely than older generations to spend more money with the brand and choose it over its competitors.”

Gen Z and millennials also care about transparency. They're 20 percent more likely to choose a transparent brand over its competitors.

That’s why today’s brands need primary data and deep visibility into their supply chains to understand their true social and environmental impacts and keep up with emerging regulations and customer expectations.

Here are three best practices for achieving supply chain transparency in 2024:

1. Monitor supplier compliance.

A company’s supply chain is only as sustainable as its suppliers. Whether it’s about environmental, social or economic sustainability, a company carries the ultimate responsibility for any outsourced business operations as well as the final product.

To achieve this, impose guidelines for social compliance, implement good manufacturing practices, and integrate sustainable processes across organizational operations. Combine these efforts with third-party assessors to validate the level of your vendors and compliance in your factories.

Then, use an integrated system to automatically find variants between audit findings and a vendor’s self-reported scores. Brands can analyze the results using analytics dashboards and issue corrective action plans.

If suppliers or vendors don’t improve, brands can adjust their sourcing plans in real time based on their progress, making their supply chain agile and responsive to consumer demands and regulatory requirements.

A vendor’s behavior indirectly represents you, and it can make or break a brand’s reputation and viability.

2. Leverage tools and analysis to track social responsibility goals.

Tracking progress in your supply chain’s social compliance and quality and sustainability journey is nearly impossible without digital capabilities to integrate data and analytics to give you the concise, actionable information you need for confident decision-making.

A combination of systems and processes should:

• Improve data-driven sourcing decisions.
• Foster communication and collaboration with suppliers and internal stakeholders.
• Provide ways for suppliers to self-manage their corrective action plans.
• Offer the ability to manage working condition assessments and audits.

The end result should empower brands to mitigate any risk of brand damage while responding to concerns with transparent, credible reporting.

3. Take control of the controllable.

​​Some parts of the supply chain are not totally within a company’s control, such as political circumstances, driver shortages or port congestion. Supplier sustainability is well within a brand’s purview.

When it comes to managing global vendors today, there are five fundamentals for success. Proper management of these will safeguard a business:

• proper vendor onboarding;
• adherence to good manufacturing practices (GMP);
• compliance with your corporate social responsibility (CSR) guidelines;
• continuous improvement in your sustainability metrics; and
• holistic analytical reporting that is shared across all corporate functions.

Take a resource-efficient approach from vendor evaluation to onboarding and compliance as a way to support your brand’s sustainability and transparency goals, drive more sales, and maximize profitability.

A Final Word

Driven by consumer demand, regulation, and corporate ESG initiatives, organizations increasingly require transparency across their global supply chains.

For modern brands looking to attract and retain young shoppers for decades to come, making supply chains sustainable and transparent isn’t a luxury. It’s a necessity with significant bottom-line implications.

Roger Mayerson serves as senior vice president, industry principal of apparel and soft goods for Logility, a leader in AI-first supply chain planning software.