Verifying ‘where’ in the supplier network builds resilience and strengthens brand trust

Abstract

Opaque supply chains are a liability, especially for businesses that want to maintain their brand integrity, adhere to regulations and stabilise their investments. It is no longer profitable or ethical for supply chain owners to remain in the dark about the locations and operations of their multiple tiers of suppliers. Reputable brands, financial institutions and regulators are pushing for more transparency in each step of the value chain to safeguard regional resources and ensure business continuity. These organisations have established that location intelligence is the foundation for transparency, as the verification of links in a supply chain begins with where a product starts its journey as a raw material. That is why a group of location-based industries and major goods producers formed the Supply Chain Data Partnership, which has developed a proof-of-concept verification process and registry for increasing the end-to-end transparency of global supply chains. Modern geographic information system (GIS) technology and ample availability of satellite imagery make it possible to partially verify locations in a less costly and more efficient manner, as well as maintain and monitor those verifications in a secure independent registry. The business incentive for a supplier to participate in such a verification process is their ability to obtain a unique label or stamp that serves as proof of independent verification to meet growing buyer demands for transparency. The label or stamp would be theirs to use for marketing purposes and to attach on goods in a radio-frequency identification (RFID) tag or barcode. A supplier could also use the label or stamp to attract new business from supply chain owners seeking verified suppliers. Ultimately, the label or stamp would be a contribution to a finished product’s digital passport, a traceability measure that will soon be mandated for goods sold inside the European Union (EU) and may be mandated elsewhere in the future. This paper discusses the Supply Chain Data Partnership’s endeavour to create a location verification process and registry to promote supply chain transparency. The paper presents the results of a proof of concept focused on soybeans, then discusses the potential positive impact of adopting these processes and tools. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.