Brands are increasingly taking responsibility for highly complex and globalised supply chains, especially now that customers and stakeholders are empowered by the internet and social media to access and share information on corporate performance with a global audience.
For those that can demonstrate strong ethical and sustainability performance from cradle to grave, there is a growing opportunity to differentiate, build customer engagement and enhance loyalty.
New technologies are emerging that enable better traceability through the supply chain from raw materials to factory gate, allowing companies to more accurately trace material flows, disclose impacts, identify potential risk ‘hot-spots’, and inform customers about the provenance of their goods.
Business value levers
Source: Accenture, 2013
Size of the prize
The market for sustainably sourced, ethical and transparent goods and services has grown 14% year-on-year since 2000. [i]
Fairtrade products and sustainably sourced clothing achieved over 30% annual growth over the last decade. [ii]
Short-term sales uplift of at least 1% is possible through certification of supply against recognised environmental or ethical standard. [iii]
Track and trace technology can enable inventory reduction and real-time forecasting of supplies, helping reduce cost of goods sold by up to 10%. [iv]
Diagram source [v]
Visibility programmes, combined with setting higher supplier standards, can pre-empt, monitor, and ultimately reduce supply chain failures, enhancing health and wellbeing of the extended workforce and communities. Examples of social outcomes can include improved health and safety (through identification of potential workplace risks), fairer living wages and stamping out child and forced labour (through better auditing against minimum supplier standards), enhanced training, and generally improved working conditions.
Visibility and improved supply chain management can also lead to multiple environmental benefits, such as reducing transport emissions through smarter logistics management and favouring lower-impact production techniques.
“ Technology will drive ever greater transparency throughout supply chains, empowering customers and asking for greater levels of engagement between sustainable business models and consumers. ”