In 2024, retailers and brands are increasingly aware of the business case for supply chain transparency.
Supply chain transparency generates business benefits from improved ESG performance, de-risking supply chains, accessing lower-cost capital, and building trust with investors, staff and customers. And that’s just the tip of the iceberg. There are opportunities galore to reduce waste, lower costs and find new income streams.
From a defensive, risk mitigation point of view, retailers need to know what’s happening in their supply chains to make the necessary disclosures required by law and avoid punitive fines and reputational damage.
But looked at from a more positive standpoint, supply chain transparency opens the door to competitive differentiation and innovation. It enables many other wins – knowledge is power when creating more sustainable products and better behaviours.Forbes Magazine states in its article ESG Compliance: It All Starts With Your Supply Chain:
“Mapping your supply chain and overlaying your ESG compliance will provide you with a baseline where the blind spots and areas for improvement. In addition, obtaining robust data and evidence from your supply chain is key. You cannot manage what you cannot measure.”
McKinsey provides some examples of the ESG business case, as demonstrated in this table – “Five ways that ESG creates value”:
Supply chain transparency is our goal, and this means being able to trace and track the products, components, services and suppliers within your supply chain, and then report on your activity in various ways for disclosure as required to auditors, investors and consumers. So, here is our step-by-step guide on how retailers and brands can reach supply chain transparency.
Priorities, data points and people!
To start with there are three simple tasks to consider no matter what supply chain software you may use: set your priorities, list your data points and engage with people:
- Identify your priorities for compliance and see how they align with your overall business objectives.
- List the data points required for capture and understand where to obtain that information (internally, suppliers, agents, licensee partners, external 3rd parties).
- Engage internal teams, partners and suppliers to confirm all ‘known’ data and production processes, request and obtain the additional information required for your baseline.
This is your starting point. Gathering this information is crucial to success, it will require some time, consideration and resources, along with the ability to adapt, both to your internal business priorities and to what you uncover as you go along! Legislative compliance is on everyone's agenda. To help you understand what is required, we recently published a Legislation Matrix listing the data capture points for key pieces of current and upcoming legislation.
The lesson is to set realistic timescales for your work on this and to learn as much as possible from those who have gone before you. The mood has shifted in retail, and as highlighted at our 2024 Retail Supply Chain Sustainability Conference; collaboration will be a key to success.
Five steps to supply chain transparency with Segura
Step 1: Import your known data
- Tier 1 suppliers
- Product data
- Certificates & documentation
- Audits and Corrective Action Plans (CAPs)
You can import files in multiple formats, e.g. from Excel or via APIs from other systems.
Step 2: discover and map your upstream supply chain
- Ingest your purchase orders
- Tier 1 suppliers declare tier 2 suppliers
- Tier 2 suppliers declare tier 3 suppliers
- This then cascades down the supply chain
You can decide how you want to prioritise your suppliers. For example, you may want to focus on your top 20% of suppliers by order volume, material type, or simply tier by tier. Suppliers will also declare any products and services giving you a full view.
Step 3: capture the ESG data and evidence you need
- Supplier questionnaires
- Compliance Certificates
- Asset composition
- Energy / Water use calculations
- Waste management
- Supplier documentation
- Audits & CAP’s
- Automatically chase suppliers
Through Segura, you can automatically prompt suppliers to complete the assigned tasks. For example, you can ask them to accept T's & C's, to upload compliance documents and audits. Suppliers are incentivised because they have to use Segura to accept the purchase orders, and actually, it’s often easier for them to have all of the documentation in one place.
Step 4: benchmark and drive your performance
By this point, you have your suppliers onboard and they have engaged with your information gathering. You can now build a holistic view of your suppliers and calculate their status using the supplier scorecard, according to your preferred measures including:
- Ethical compliance
- Environmental compliance
- Product certification compliance
- Legislative compliance
- Review any missing data
- Issue rectification and evidence
Supplier scorecards can be used for all sorts of decision-making, helping to select preferred suppliers and helping to remediate issues and provide clear evidence when discovered.
Step 5: Publish information publicly (DPP)
The final step of supply chain transparency is using a Digital Product Passport system to display to your customers (and other stakeholders) the product and supply chain information they would value.
- Seguras' core platform gathers the transparency, data & evidence
- You select what information you wish to display via Digital Product Passport
- Display the item-level data to your consumers
How long do the five steps take?
It is important to view this as an ongoing project, with business priorities changing, legislation and consumer demand for information ever-growing, supply chain discovery and traceability is a marathon, not a sprint.
The secret of success is in the preparatory steps – priorities, data points and people. With those pillars in place, the rest of the work will be more focused and successful. At this stage, the important thing is to start doing so that you don’t get caught out not knowing!
Prioritising your supply chain resilience with true end-to-end visibility and transparency is key
In summary
Governments, investors, consumers, sales channel partners and employees are increasing pressure on the industry to be ethical, sustainable, and net zero. Supply chain transparency can give business leaders the data, and insights to reap the benefits.
Segura provides a view of all components and suppliers within a product's supply chain to give businesses the full picture. A true end-to-end supply chain transparency software, like Segura, enables retailers to map their supply chain, on an order-by-order basis, ensure supplier compliance and measure performance.
Overall, having one solution that does it all, can empower enormous change and commercial advantage for retailers in a fast-changing industry.
About Segura
Segura Systems is a UK-based SaaS company enabling ethical, sustainable and efficient multi-tier supply chains.
Segura provides n-tier mapping, transparency, traceability, visualisation, compliance and reporting. Segura sits in the centre of your supply chain management structure creating a central repository for all your supply chain, ESG-related data and evidence, including third-party data sources.
If you'd like to learn how Segura can help you, please get in touch today.
