Learn what supply chain visability is, why it is important and our best tips to achieve it.
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The term Supply chain visibility refers to knowing everything that’s going on in your supply chain. Modern-day supply chains are complex and far-reaching, and with a diverse supplier network distributed all across the world – tracking every tier of it can be a hard task to take upon. However, as a company’s most environmental and social damage usually occurs in their supply chains, achieving it is a must.
The demand for businesses to achieve supply chain visibility in order to comply with modern slavery and other environmental, social, and corporate governance (ESG) rules has skyrocketed in the past years. New legislations, such as the European Green Deal, are making it more important than ever to gain full visibility across your entire supply chain. But where to start? In this blog, we will go through everything you need to know on how to build a resilient supply chain that can withstand uncertainty and promotes sustainability at every level of your supply chain!
What is Supply chain visibility?
Supply chain visibility is the ability to track every tier of your supply chain – from the raw materials to the customer. The goal of Supply chain visibility is to improve and strengthen the supply chain by making data readily available to all stakeholders.
Why is visibility important in Supply chains?
For most large companies, the majority of their environmental, social and governance (ESG) costs occur in their supply chain, rather than from their own operations. More than 80% of the typical consumer company’s greenhouse gas emissions are embedded in their supply chains, and on top of that– the most severe human rights risks, such as modern slavery, are usually hidden deep down in the supply chain. By working closely with your suppliers, you can significantly reduce risks, take important steps to address and prevent them – and transparently report your efforts.
What are the benefits of Supply chain visibility?
- Provides real-time insights into the activities and actions occurring across your supply chain
- Limits risky business to slip through the cracks
- Uncovers the risks in your supply chain
- Reduces the risk of reputational costs and damage
New laws making Supply chain visibility more important than ever
In 2020, a study for the European Union (EU) found that businesses’ voluntary approach to addressing ESG issues in their supply chains is not enough to stop unsustainable practices and protect the people working across the chains. As a result, EU announced a mandatory legislation on supply chain due diligence in 2021, to encourage businesses to attain full visibility and take control over their supply chains.
And it is not only the EU that has started to address this issue. The entire world is starting to see the power of binding legislation to push businesses to take responsibility for their supply chains. For example, France, Germany and Norway have all adopted their own national supply chain due diligence legislations. One thing is certain: the demand on supply chain visibility is higher than ever before.
How to increase your supply chain visibility?
Establishing an adequate and effective risk management system is key to identifying and assessing human rights and environmental risks within your supply chain. Collecting important information from every tier of your supply chain on a regular basis is the only way to get to know what is going on and thus prevent risky business from occurring. Gathering qualifiable information from suppliers can be a complex matter – especially for companies with far-reaching and dynamic supply chains. However, this doesn't have to be the case. Today, smart technology and softwares help businesses improve their supply chain visibility – while minimizing the management load.
Yet, many businesses are still manually managing their supply chain information, using familiar spreadsheets such as Excel or Google tools. According to our report Navigating the landscape of sustainability reporting, only 17% use a dedicated sustainability reporting software to gather and manage their sustainability data. Manual reporting too often creates gaps in your data and increases the risk of important information slipping through the cracks.
How to use Worldfavor to easily gather, measure and manage suppliers’ data
Worldfavor enables your business to easily collect and detailly track your supplier’s social and environmental performances over time. Our Supply chain visibility solution helps you to reach new levels of transparency by uncovering vulnerabilities and building resilience.
Sign up to Worldfavor Supply chain visibility solution today:
- Capture hard-to-get data from all your suppliers
- Let the platform automatically analyze your suppliers’ data for you
- Store the crowd-sourced supplier data in one place, so information can easily be shared between colleagues
- Break down your supply chain for a specific product or category
- Identify environmental, social and governance (ESG) risks before they become a problem
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