What You Don’t Know Could Fill a Book
We’re not trying to be insulting, really. But the MIT Sloan School of Management has published a white paper (OK, a very small book) about the challenges and opportunities lurking in the typical supply chain.
“What don’t you know about your supply chain?” the authors tease, rather ominously. “More than you might imagine.”
“Special Report: Supply Chain 2020” explores four areas that could either harm or help your supply chain, depending on whether or not you are prepared for them: cyberthreats, blockchain, “ethical landmines” and supply chain visibility.
Taking the last point — visibility — as an example, MIT says it’s important to know the details of the links along your supply chain. This includes working conditions and environmental impacts.
Today, “Consumers are caring more about a company’s social responsibility,” MIT says. “According to a recent poll … 75 percent of respondents considered transparency helpful in strengthening trust between businesses and consumers. But few companies invest in learning more about supply chain visibility, which allows for transparency with consumers. According to another poll cited by researchers, 81 percent of 1,700 companies surveyed did not have full visibility into their supply chains, and 54 percent had no visibility at all.”
While we might want to pretend that ignorance is bliss, it’s those things you don’t know — such as exploitive labor practices somewhere in your supply chain — that can create a consumer backlash. On the other hand, supply chain visibility helps build customer trust.
“For companies that source from suppliers in developing countries where workers live in potentially poor economic conditions, there is an even stronger potential benefit from investing to improve supply chain visibility,” according to MIT researchers.