The reality of global supply chains in recent years has been a sorry affair, but there’s reason for hope.
By their nature, supply chains are notoriously messy, complex and opaque. Fundamental issues remain hidden in the shadows, whether they be child and forced labor, deforestation or the impact of climate change. The outsourcing of production results in a lack of responsibility for poor conditions in facilities. And the failure to achieve visibility into multiple tiers of the supply chain reinforces that lack of accountability.
Access to critical data varies widely among companies. Where it does exist, it’s often affected by a series of fundamental flaws, including:
The key to resolving many of these issues might seem surprisingly straightforward. By standardizing and opening up supply chain data and allocating unique, freely accessible IDs to global facilities, companies can realize enormous potential and begin addressing the most challenging social and environmental issues of our time.
Not only is the opening up of supply chain data much needed in order to solve pressing global issues, it’s also imperative for companies to meet a raft of supply chain legislation either already enacted or coming down the track. It includes the European Commission’s Corporate Sustainability Reporting Directive, U.S. Uyghur Forced Labor Prevention Act, Germany’s recently passed Supply Chain Due Diligence Act, and the French Duty of Vigilance Law.
Companies have a decision to make: Would they prefer to get ahead of the curve, ready themselves for this onslaught of legislative requirements and open up their supply chain data, or play an expensive game of catch-up once the legislation has passed and competitors have advanced more quickly? The cost of anticipating legislation is far lower than responding to it, and any number of process efficiencies and benefits for workers and the environment can be realized along the way. Which route would you choose?
Natalie Grillon is chief executive of Open Supply Hub.
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