Supply chain risk management - the value of transparency

Most of the risks that could disrupt your supply chain fall into four broad categories: economic, environmental, political, and ethical. These are not new issues, though many of them have become more prevalent with the global food system being more complex and complicated today than ever before.

What today’s consumers want to know extends well beyond a food or beverage product’s ingredients. The ability to communicate provenance, product quality, and demonstrate sustainability credentials enables consumers to make intentional choices based on easy access to relevant and truthful information about products, ingredients, sourcing, and the integrity of business practices.

Transparency can be seen as the golden thread that runs through all of these broad categories and in a technological culture where feedback moves fast, transparency has increasingly become nearly everyone’s concern.

Strategies to prevent, mitigate and recover from risk

To assess the risks of your suppliers, consider these strategies:

Map your supply chains - Before you can assess and evaluate the risks of your suppliers you need to know who they are, what they provide, and where they are located. The size of your business will determine how many tiers of suppliers you have and how far upstream you need to map. Achieving any level of insight is a big step in the right direction and with the right supply chain solution mapping your entire network back to the source is easy.

Identify and assess areas of vulnerability in your supply chain - Compare the amount of risk that various suppliers present, this will give you the opportunity to mitigate those areas and take action. For example, having insight into potential fraudulent products with a global food safety and authenticity risk database allows you to be one step ahead in identifying the weak spots in your supply chain and building your defence ahead of any attack. 

Diversify your supply base - Supply chain diversification is a risk management strategy that can provide new or alternative suppliers to those that pose a potential risk to your business or sourcing. This ensures more flexibility and agility in the supply chain when the market faces a disruption.

Crisis management foresight - Many of our products come from various sources across multiple supply chains worldwide, as these supply chains grow in complexity and size, the likelihood and severity of outbreaks and product recall increase. How you respond to a product recall can considerably impact your reputation and the level of consumer trust in your brand. 

The most effective way to avoid a product recall is to monitor your manufacturing processes with audits and assessments and inspect your products to ensure their continued compliance with your specifications.

The average cost of a food recall, according to the Food Marketing Institute and the Grocery Manufacturers Association in the US is $10 Million

Efficient communication - The quantity of information does not make a company transparent. The relevance, timing, reliability, accuracy, and usefulness of information does. Those that bridge the gap for consumers between the information available and the ability to use it effectively will have a competitive advantage. Improved insight into your direct and indirect supply chains will help you to evidence and communicate credentials and good news stories.

Transparency is now a way of life

Global threats such as climate change, supply chain disruption, and counterfeit risk have increased the demand for transparency to the point that businesses now realise that they must act. Thanks to technological advancements it’s easier than ever to take control of your end-to-end processes and increase transparency to your consumers. 

The question is how, rather than when.