Supply Chain Transparency

      2 Comments on Supply Chain Transparency

Today’s consumers are more sensitive to where a product comes from and who is affected during production. Many companies are reluctant to reveal the source of their materials or method of production to maintain a competitive advantage or protect trade secrets.

There is a lot of information on the Internet from watchdog groups, but is the information credible? How far must I dig, and how much time must I invest if I want to make a purchasing decision that aligns with my interests and ethics? For example, if I buy rice from Taiwan, I have to research all the companies that were involved in getting the product to me. What if the rice was produced under fair and ethical conditions, but the ink used to print the logo on the bag was made by a company known to use child labor? Assuming all this information is available (and current), how can the average consumer weigh so many variables? In a globalized commodity chain, the source of materials and labor are frequently overseas where information is not as readily available, and government policies often protect businesses.

I believe the answer is supply chain transparency. Companies are making themselves more transparent in an attempt to capitalize on this trend. The garment industry, long criticized for the poor working conditions of workers overseas has voluntarily made parts of their commodity chains visible on their websites. Companies like Nike, Adidas, Patagonia, Levi Strauss, have taken the initiative (or reacted to bad publicity) to make commodity transparency a part of their marketing strategy. This is a good first step for other industries to follow, but consumers need to demand it. Supermarkets and restaurants should make available to the public, information on where their wholesalers get their products from. The public should be informed by standardized websites, the same way food labels are required on products.

Companies are responsive to how the public sees their products. Consumer Reports is an independent, non-profit organization that tests thousands of products each year and publishes the results. Their influence over the auto industry cannot be understated. When Consumer Reports rated Tesla’s new Model 3 sedan as “average,” Fearing lower sales, Tesla publicly defended its product by criticizing Consumer Reports’ testing procedures as flawed and unfair. Consumers are increasingly turning to these organizations to make informed purchasing decisions. Though not as influential as Consumer Reports, Goodguides is another example of an independent organization trying to keep consumers informed. As consumers, we should not only make informed purchasing decisions, but also support transparency in all companies.


2 thoughts on “Supply Chain Transparency

  1. David Hughes

    I agree with you that commodity chain transparency is something that consumers should demand, and it is something that can coerce change from companies that use unethical business practices. I think the problem lies in the direction of that demand, as consumers need to bring this concern to politicians rather than the company or industries themselves. True government, representing the wishes of society, has the power needed to create policies of transparency as well as enforce various punishments or sanctions, including blocking imports of products. Government agencies can also organize the oversight needed and enforce deadlines on changes required of the industries. Consumers can certainly boycott products, but this falls back on the failing method of individualization.

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