Supply chains play a key role in winning the battle against climate change.
With 60% of global emissions coming from supply chains, the global fashion industry, in particular, puts a massive strain on the environment, releasing approximately 1.2 billion tonnes of carbon dioxide annually.
Brands and retailers are responding with investments in sustainability initiatives within the supply chain to reduce their environmental impact. While there are many ways to get started, the most successful organizations are those which have embraced two key components of supply chain transparency — visibility and traceability.
What is supply chain transparency?
Supply chain transparency is essential for modern businesses to succeed in the face of tightening regulations and growing consumer pressure for more sustainable practices. Buyers want to know the raw materials used to manufacture the products they buy are ethically sourced and that the environmental impacts of getting that product from the factory to their cart is minimized.
On the regulatory front, brands and retailers must provide proof of compliance or risk goods being held up at the border — at the cost of millions of dollars.
Transparency is vital for these companies to meet both regulatory requirements and consumer pressure. Achieving this means goods must be visible and traceable throughout the supply chain.
Imagine the supply chain as a cake.
Visibility is like the ingredients — you need to know what is needed to make the cake, such as eggs, flour, sugar, and butter.
Traceability is like the nutrients — you want to know the nutritional value of each ingredient, such as the amount of protein in eggs and carbohydrates in flour.
It simply means understanding where raw materials come from, the number of people and processes involved in the production, and the different processes that go into making a product.
With visibility and traceability, you get complete transparency.
3 pillars to building a transparent supply chain
A highly transparent, sustainable, compliant, and traceable supply chain is built upon three foundational pillars:
- Data collection and consolidation
- Upstream supply chain visibility
- Ecosystem accountability, empowerment, and collaboration
1. Data collection and consolidation
Data lies at the heart of modern supply chains – the key to unlocking visibility and traceability. But many apparel companies struggle to track and collect data from every level of the supply chain and consolidate it into a digital platform that makes it easy to access and analyze the data. Not only do you have to collect data from different regions in different formats, but also in different languages – which is why having a centralized platform like Inspectorio is essential to consolidate all this data in one place.
Our survey of over 8,000 brands, retailers, suppliers, and factories in the Inspectorio ecosystem showed that many companies still rely on spreadsheets and emails to manage their sustainability and compliance operations. Not only are these inefficient and slow, but they also lack true transparency.
A lot of information can get lost, overlooked, or left on spreadsheets when relying on manual systems.
Without proper data collection, it is difficult to understand how sustainable your operations are and identify areas for improvement. Investing in true sustainability means developing an end-to-end system that captures and measures data, from raw materials to final product delivery.
Inspectorio’s powerful sustainability and regulatory compliance capabilities help streamline and automate data gathering, giving you more time to look at reporting, analytics, and decision-making. You can easily configure your own audits and questionnaires within the platform to fine-tune your data collection efforts or integrate data from third-party assessment tools such as Higg, Social & Labor Convergence Program (SLCP), and more. You can also access the Higg Facility Environmental Module (FEM) through supplier facility profiles for a single view of a facility’s environmental performance.
Our expert-built questionnaires and assessments leverage the most relevant standards and certifications to easily track various sustainability metrics, including labor and working conditions, health and safety, chemical management, energy usage, water use, waste management, and more. You can easily share and store all that data to keep everyone in the loop and ensure transparency for all stakeholders involved.
2. Upstream supply chain real-time visibility
Upstream supply chain visibility is understanding how everything comes together to make your product – from farms and mills to factories and retailers. Knowing who is involved and where each step in the process happens is essential to making sure the product you are getting from your vendors is compliant and meets your sustainability objectives.
But to gain this level of visibility, you need to look beyond your Tier 1 suppliers and reach down to your Tier 3 suppliers and even farther because lack of visibility means supply chain risk that can leave you vulnerable to potential non-compliance, counterfeiting, and delays.
Inspectorio's supply chain mapping, visualization, and risk assessment capabilities enable you to map, centralize and visualize your suppliers, products, and their relationships, allowing you to gain a complete picture of your supply chain. With risk reports and alerts triggered when anomalies are detected, you can quickly identify areas of concern and take corrective action.
The platform’s purchase order (PO) traceability solution lets you trace goods back to their source, so you can address any potential problems and keep your product from entering the market with non-compliance issues or unacceptable environmental practices. Collect a chain of custody documentation, review it in real-time, and take action from anywhere in the world.
Another powerful feature is dynamic risk reporting which helps you collect and monitor data by screening your suppliers to find any existing sanctions, factory closures, human rights violations, and public environmental impacts. You can better understand the impact of external events on your supply chain and design strategies to mitigate risk. Adjust resources, prioritize tasks, and define areas for improvement as you identify gaps in your supply chain.
3. Ecosystem accountability, empowerment, and collaboration
The data needed to achieve sustainability must come from across the supply chain, meaning all participants must be held accountable and work collaboratively. Building strong relationships with suppliers and stakeholders is essential to creating a transparent and sustainable supply chain. All parties must come together to identify and resolve any issues while promoting open and honest communication.
At Inspectorio, we believe that successful collaboration requires a clear understanding of what data needs to be collected and why. This way, brands and retailers can bring their entire ecosystem with them into a more sustainable future with a common goal in sight. This unified approach helps break down traditional silos between stakeholders, empowering them to work together towards a shared vision.
The Inspectorio Academy provides an interactive online learning environment with courses to equip you – and your suppliers – with the knowledge and resources needed to build accountable, sustainable supply chains. We also offer sustainability consulting and training services to help implement effective sustainability strategies and practices and reduce your environmental impact.
By embracing these pillars, you can forge transparent, sustainable, and resilient supply chains. It's time to act, reduce emissions, and meet the demands of increasingly conscious consumers for a greener future. Together, we can drive positive change and build a sustainable world.
About the author