Supply chain transparency has become increasingly sought after in today’s market. In some cases, companies have no options but to comply as they’re subject to growing pressure from governments, NGOs, consumers, and other stakeholders to divulge more information about their supply chains.

At Pivot International, transparency is core to our business model, central to our brand identity, and paramount to our relationship with our partners. Because we operate our own facilities and have invested heavily in digitization, we can provide our partners with exceptional levels of insight into every phase of the product development process, as well as the supply chain. And because Pivot has comprehensive front-end processes in place for understanding our partners’ needs, we stand solidly behind our proposals and cost quotes.

Supply chain transparency is a hot topic in the industry. To better understand why, let’s explore the meaning of the term transparency, as well as some of the significant challenges and benefits associated with it.

Understanding Transparency

Before we dive into the issues and advantages of supply chain transparency, let’s take a brief look at how the term is currently being used. Transparency refers to how deeply companies can see into and account for the interconnected links in their supply chain, as well as how freely they share this information both internally and externally. 

Reasons for achieving supply chain transparency vary across the board, with one reason being that consumers are increasingly demanding it. A consumer, for instance, may seek transparency to ensure that the products they purchase are environmentally conscious or created using fair labor practices. Another reason is that supply chain transparency can help companies reduce their risk of incurring reputational damage.

Beyond reputational risk, a lack of supply chain transparency can pose operational problems that can stop businesses in their tracks. Shipments missing origin documents, for example, can be held up or turned away at ports. The results of this costly disruption can ripple through the entire supply chain.

The Challenge of Transparency

Traditionally, supply chains have not been designed to be transparent. As a result, transparency can pose the following challenges:

  • Organizations sometimes fear that disclosing too much information would negatively impact their competitive advantage or expose them to criticism
  • Detailed information about upstream supply chain partners or practices may not be available. If it is available, it may be unreliable or misleading
  • The investment in transparency doesn’t always satisfy near-term ROI requirements

Despite these challenges, there are measures companies can take to assess the business case for transparency and rate how their organizations are performing.

4 Benefits of Transparency

For companies that are unsure of whether achieving greater supply chain transparency is worth the investment, here are a few advantages to consider:

  • Transparency helps companies to identify and act on opportunities to improve supply chain efficiency and performance
  • Transparency supports compliance in the face of a changing and increasingly stringent regulatory environment
  • Transparency can enhance a company’s reputation as a trustworthy organization and therefore attract more customers
  • Transparency can be a bankable draw for employees that are eager to work for responsible, forward-thinking companies

While complete transparency may not make sense for every company and can be years in the making for those that choose to pursue this goal, the organizational and operational rewards can be significant. If you’re looking to work with a manufacturing partner that offers high levels of transparency throughout the product development cycle, Pivot can deliver. Contact us today to learn more about how our advanced supply chain expertise can help you profitably realize your product’s potential and position your company as an industry leader.