Even though we have come to understand the need for supply chain transparency, many companies are still implementing the right tools to make it a reality. But why is it so hard to provide transparency and complete visibility?
It’s because supply chains were not designed to be transparent, there are many moving parts and data points, and most importantly, companies do not know where to start.
What are the biggest challenges for supply chain transparency?
There are many challenges companies must overcome to ensure supply chain transparency, here are just a few:
- Lack of detailed information and availability.
For companies to be transparent, it is essential to have information about all the parties involved in the supply chain process, and in most cases, this is not possible. Many companies do not have the required information to allow complete traceability. Some are more invested in having their processes be transparent internally but not externally.
But for supply chain transparency to be implemented and successful, companies must overcome their fear of communicating their data to other parties involved.
- Fear of criticism.
Although supply chain transparency requires companies to share their information, most are doubtful in doing so since, in the industry, there are vast amounts of data that’s sensitive. Additionally, being open with this delicate data may lead to criticism from logistics partners and even end consumers.
Having a relationship based on trust and excellent communication is critical. By communicating effectively with your partners, you’ll be able to agree upon using your sensitive information and how, even though it can benefit the entire supply chain, it still requires careful handling.
Additionally, companies must review their processes and see where there could be potential issues. For instance, companies must be wary of having logistics partners that do not comply with requirements or do not operate according to their company’s standards. This may cause reputational issues and criticism that lead to a decrease in business. Without these problems, companies may be more open to sharing their information and making supply chain transparency a reality.
- ROI (Return On Investment)
Another major challenge is ROI. Transparency requires investment, and in some cases, it does not satisfy the ROI requirement for business owners. But this certainly depends on how you look at the issues. For instance, fuel is one of the most significant company investments. Having the correct information about the transportation process and its costs helps companies make better decisions and create strategies to reduce them. Therefore, data is vital for cost control.
Top Benefits of transparency
Even though these challenges are hard to overcome, companies must consider the increasing benefits of supply chain transparency to create better and more efficient workflows.
- Transparency helps companies identify opportunities for improvement.
- Being transparent with information allows for overall compliance.
- Transparency allows other business partners and consumers to trust your company.
These are just some of the benefits that transparency provides your business. In general, being transparent allows your business to flow seamlessly and generate better relationships with all the parties involved in the transportation process.
