Introduction

Retailers face increasing pressure to gain visibility of their complex supply chains in relation to sustainability and compliance data. This demand is driven by the need to share relevant information with stakeholders, customers, and partners, including ESG, user information (GDPR), order times and updates, human rights/anti-slavery evidence, and more.

Investment and expectations around sustainable practice and technological solutions have changed the way businesses collect and analyse their data. With disparate sources of information, from shops and digital marketplaces to supplier portals, gathering information is no simple feat.

Retailers are regulated, not only on having access to the data, but how they store and provide the information. Supply chain traceability, visibility, and transparency all play crucially into the ability to view, access, and provide this data when requested. Without these themes, the information available to retailers would be limited and unlikely to cover the scope of data required for reporting.

Within this, however, there are indirect consequences of making supply chain data available, such as exposing trade secrets, that should be considered and managed as part of any supply chain solution.

This POV will define the difference between supply chain visibility, traceability, and transparency
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Supply Chain Visibility

Supply chain visibility defines the ability to view individual components and products as they move through the chain from manufacturer and distributer to customer and onwards. It is a first step in creating traceability at a high level.

Retailers are able to track their products and inventory as it moves thanks to regular updates from scans and transit reports as documentation is created and uploaded.

Visibility is enabled by supply chain technology that provides real-time data, thus requiring a touch point at any given stage of a supply chain. A vital step in improving supply chain visibility is collaborating with manufacturers, suppliers, and distributers to share data that provides insight into areas like regulatory issues, demand spikes, and delays in production.

Visibility is achieved through the following steps:

Data collection: where data is collected from ERP, inventory management, CRM systems, and external sources such as economic trends, supplier data, and customer reviews. Alongside this, data is collected from RFID tags and IoT sensors.

Data storage and analysis: collected data is stored in a repository in which it can be analysed. The analysis can help companies uncover key data to identify trends, understand costs, and review performance.

Data display and sharing: retailers can use real-time dashboards and reports to investigate use cases.

Ensuring access to quality data, technology to extract insights, and a platform to share the data will improve supply chain visibility and management. Ensuring this data is easy to understand whilst being comprehensive allows retailers to learn about their supply chain processes, how to allocate resources, and increase customer satisfaction. Those who enhance their supply chain visibility are more likely to establish trust with suppliers and customers.

Supply Chain Transparency

Supply chain transparency refers to the disclosure of supply chain information, it goes beyond internal visibility by making data externally accessible. This includes information about how goods are produced and distributed, the use and manner of labour, and the transportation methods and impacts at each stage of the chain.

Transparency provides accountability for the chain, and should be a consideration for organisations seeking to improve their credibility. Factors to think about when implementing transparency include:

    • Who needs to have access and visibility to supply chain information?
    • What information is being shared and in what format?
    • When is the information needed, and how often will the information be shared and updated?

Articulating supply chain transparency is an effective way of displaying sustainability efforts to stakeholders. Research suggests that environmental sustainability is a consideration consumers make before buying, transparency offers a way to demonstrate an organisation’s commitment to sustainability to their audiences.

As more regulations are put in place around human rights and environmental targets, transparency supports the ability to evidence their compliance to consumers and regulators. This aids brand reputation among other benefits.

Supply Chain Traceability

Supply chain traceability is the process of tracking products and inputs from raw material to retail sale, and if possible, post-consumer. It provides a more granular level of insight into the processes, origins, and destinations of consumer products. It considers the importance of metadata and auditability to a more acute degree than just visibility.

Traceability is dependent on data existing and being available for access. Importance lies with the ability to manage risk, ensure products are created ethically and sustainably, ensure regulatory compliance (ESG and scoped reports), and ultimately increase brand reputation.

When tracing where a product has originated, there are various factors and streams to consider.

Raw material tracking involves tracing the origins of the materials used in a product, completed by collecting data on the source of each material.

Where businesses claim they use only the finest materials in their products, for example merino wool or cashmere, sustainably farmed foods, or precious metals, consumers may request evidence that this is fact. Especially if you charge a premium. Being aware of your early supply chain provides faith in your products to stand up to any potential scrutiny with the knowledge to defend yourself.

Production tracking traces the movement of the product throughout the manufacturing process, collecting data on materials used, the people, and the processes involved in the production process.

This is especially topical around fast fashion. Are workers being exploited to produce products, and are you aware of it?

Distribution tracking involves tracing the movement of a product from manufacturing to its destination, usually focusing on the conditions it was transported.

With sustainability being the topic of the moment, transportation is understandably a key focus. Are you efficiently using distribution methods, or are you sending out multiple half empty vehicles to the same destination and using up unnecessary fuel? Are you attempting to incorporate sustainable practices?

The other use case where tracking distribution is critical is in the case of livestock transportation, where animal welfare is called into question. Are you moving animals for too long durations? Are they kept in humane conditions on the journey? Do you have the correct documentation if you are moving across borders?

Consumer tracking traces the movement of a product after it has been purchased by a customer.

The rise of Extended Producer Responsibility (EPR) puts a spotlight on the need to track product use in the post-consumer realm. Are businesses taking the proper steps to ensure their products are not being sent straight to landfill, instead have a sustainable disposal method such as collection and recycling options.

This, scope 3, is difficult to track. Looking at textiles, consumers may remove labels and identifiers, drop article off at charity shops or bins, or dispose of materials in binbags at the tip, all making tracking origins a mountainous challenge.

Solution

There is no simple or quick solution to solve supply chain traceability. Where supply chains are long and cross borders you encounter challenges with different regulations and data standards that can be difficult to overcome.

However, technology and integration can be a great start to enabling and improving traceability. As the first step, understanding what data is required and what is available will ensure you capture as much as possible when integrating supply chain systems.

Tracing data for regulatory satisfaction will require providing auditable evidence of data reliability. Is there a clear data owner, when was the data inputted/created, has it been edited, etc. Blockchain can support this auditability by creating a tamperproof ledger of information and metadata.

Tracing individual products is also possible using barcodes and RFID tags. This tracking is important for organisations for multiple reasons, including sustainability as it helps to identify inefficiencies and waste that can be removed or optimised. Data can be used to inform consumers about the origins and makeup of products, and thanks to the unit granularity, it can assure business leaders that their products are following regulations.

Conclusion

The most effective and efficient supply chains connect information to make it accessible to relevant stakeholders for oversight of activity and agile, data-driven decision making.

The three key concepts of visibility, traceability, and transparency are entwined to make this oversight and insight possible and allow a company to safeguard against compliance and sustainability risk.

Ensuring data is accurate and secure is critical to achieving and getting value from this supply chain insight. Having data that is trusted, auditable, and relevant whilst securing it from unauthorised users is a key factor for any project to provide these capabilities.

Using the available data, retailers can utilise analytics and other tools to uncover trends and issues within the chain that can be addressed to improve efficiency and resilience. They can also utilise tamperproof audit ledgers for collected data to provide compliance evidence such as carbon usage, fair trade,  and human rights.

All this will support retailers to improve operational efficiency, respond to and evidence regulatory compliance, increase customer satisfaction, and improve productivity.

Responsiv Supply Chain Insights Project

Working with Innovate UK and partners, Responsiv is developing a platform to gather and provide supply chain insights for the management of discarded textiles in the UK. This project will support the ideas of supply chain compliance, traceability, visibility, and where possible, transparency.

Around 1.05-1.75 million tonnes of textiles is thrown away in the UK annually, 360,000 tonnes of this is clothing that ends up in landfill.

Our goal is to create a body of information that can be used to support investment in UK recycling facilities and capacity. Responsiv will collaborate with partners to research improved ways of standardising data categorisations across textile sources for sufficient and valuable recycling supply.

Responsiv will be using its expertise in integration and automation to map out a previously undefined supply chain. A key part of our role in this project is making data secure and giving the consortium control of their data sharing.

Read more here!
Get in touch today to find out how Responsiv can support your supply chain transformation journey!

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