The concept of supply chain transparency was virtually unknown 15 years ago, yet today it commands the attention of mid- and senior-level managers across a broad spectrum of companies and industries.
The reasons for this increased interest are clear: Companies are under pressure from governments, consumers, NGOs, and other stakeholders to divulge more information about their supply chains, and the reputational cost of failing to meet these demands can be high.
For example, food companies are facing more demand for supply-chain-related information about ingredients, food fraud, animal welfare, and child labor. Less clear, however, is how to define transparency in a supply chain context and the extent to which companies should pursue it: an MIT study that mapped definitions of supply chain transparency related to labor practices in the apparel industry found vastly differing definitions across organizations.
In this article, we offer some clarity on the meaning of supply chain transparency and guidelines to map and extend progress. The recommendations derive from the experience shared by dozens of companies up and down the supply chain across industries of all sizes over the last decade with MIT Sustainable Supply Chains, an initiative based at the MIT Center for Transportation and Logistics; Sourcemap, a provider of supply-chain-transparency solutions; and ongoing research in this area.