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Why Transparency is so Important for Supply Chains?

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Fifteen years ago, most mid- and senior-level managers did not even have the concept of supply chain transparency on their radar. Since then, a great deal has happened in the logistics and supply chain management field that has brought visibility to the forefront of most organizations’ priority lists. Just what is transparency and why has it become so crucial?

Supply chain transparency defined

With every passing year, supply networks are becoming more global and complex, often branching off into numerous tributaries and sub-tributaries. Each of these offshoots is a company in its own right with its own set of subcontractors and partners, all of whom have their own as well. In this context, it is easy to see how a flaw in even the furthermost supplier can have devastating ripple effects that ultimately make their way back to the primary organization.

Supply chain transparency involves taking the time to analyze all nodes and subnodes in the network. After this exhaustive and often expensive process is completed, a logistics team can follow the progress of components such as Trinamic Motion Control motors from origin to endpoint. Should any disruptions occur in the interim, this heightened supply chain visibility means that the logistics team can quickly become aware of the issue and work to resolve it.

The importance of transparency in the supply network

Procurement and logistics professionals in the organization are not the only ones concerned with supply chain transparency. Today’s socially and environmentally conscious consumers are also highly motivated to understand exactly where the components that go into the assembly of their electronics products are sourced and how they are delivered.

For instance, failing to understand the provenance of a particular raw material might mean that you do not recognize until it’s too late that the supplier has been associated with child labor or other human rights violations. Perhaps your team was slow to grasp that fact, but you can rest assured that a savvy consumer somewhere will not be. The resulting blowback can be extremely injurious to your company’s reputation and future sales.

In addition to damage to your brand, a lack of transparency can be the direct cause of supply chain disruptions. Authorities at a rising number of international ports are closely scrutinizing the paperwork provided by shippers. If origin documentation is missing or incomplete, the entire shipment can be held up for an indeterminate amount of time until the situation has been corrected. With every hour that the delivery is delayed, the organization is at greater risk of losing both a significant amount of money and its reputation for on-time arrivals.

Gaining supply chain transparency is a time consuming and financially arduous process. However, achieving it is extremely advantageous to companies that manufacture electronics products. It not only increases the efficiency of the supply chain from origin to endpoint but is also compatible with customers’ increased awareness of social and environmental sustainability priorities. In today’s complex global milieu, electronics manufacturers cannot afford to ignore this vital priority.