Case Studies: Leveraging on Technology for Supply Chain Transparency
Businesses are coming under increasing pressure to demonstrate traceability in their supply chain – a task that is no easy feat given the complexity of global supply chains today. In Case Studies: Supply Chain Transparency and Accountability, we featured case studies where companies took practical steps in establishing sustainable supply chains by:
- Setting expectations for suppliers;
- Engaging them; and finally
- Monitoring their performance.
In this follow-up article, we take a look at companies who have leveraged on technology to enhance effective monitoring of the performance and activities of their suppliers.
How can companies use technology to strengthen the monitoring of suppliers?
Many companies have developed technological tools – typically in collaboration with peers in the same industry – to monitor the practices of their suppliers. This demonstrates to stakeholders, including investors, customers and NGOs, that the company has a good understanding of the sustainability risks embedded in its supply chains, as well as the company’s commitment to address these risks promptly.
In the following examples, a number of companies in various industries have leveraged on technology to help customers downstream – whether business or end retail consumers – to fulfil their traceability requirements.
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Target, Esprit, New Balance, PUMA, Gap Inc and Inditex: Supply chain transparency tool for consumers
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What
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Leading apparel companies came together to join a supply chain transparency
tool, developed by Natural Resources Defense Council (NRDC) in the US and the Institute of Public & Environmental Affairs (IPE) in China, to provide consumers with real-time and publicly-available data on the environmental performance of their suppliers in China. The objective was to go one step further to strengthen traceability in their supply chain.
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How
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The IPE Green Supply Chain Map, with both English and Chinese versions, allows consumers to view the environmental performance of suppliers used by their favourite brands. Companies who have voluntarily joined the initiative include Target, Esprit, New Balance, PUMA, Gap Inc, Samsung, Tesco, Nike and Levi’s.
On the map, users can view information on suppliers such as carbon emissions, wastewater discharge, factory responses and corrective actions towards environmental violations. Both real-time and historical data of 30 days can be viewed.
This tool was developed by mapping lists of suppliers shared by companies, against data on more than 500,000 facilities in China shared by the Chinese government.
Screenshot of the IPE Green Supply Chain Map, displaying the level of water quality from industrial facilities for one area in China
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Benefits
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- Brands and suppliers are able to monitor the environmental performance of their suppliers in real time, enabling them to make more informed purchasing decisions. It also reduces the time and resources for factory audits.
- Consumers are able to effectively assess the environmental impact of their favourite brands.
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Olam: Supply chain traceability tool for Olam’s customers
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What
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As a leading agri-business, Olam launched a digital dashboard to provide their customers – typically food manufacturers who buy raw agricultural supplies – with access to information on the sustainability performance of their suppliers.
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How
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AtSource is a digital dashboard allowing Olam customers to view the environmental and social performance of Olam’s supplier farmers. The dashboard displays the customers’ order history and corresponding social and environmental information for various touchpoints of the product’s journey.
Customers can select one of the three tiers:
1.AtSource (basic, free-to-use level): Lists Olam’s suppliers that comply with the Olam Supplier Code. Users can also use view country-level risks on climate change, water and land use.
2.AtSource Plus: Provides further details of supplier farmers on 12 core sustainability topics with 80 indicators, from soil health to child labour, covering different parts of the supply chain from farmers to logistics and processing.
3.AtSource Infinity: Targets customers who want to create a “net-positive impact” and co-create programmes to benefit farming populations and the environment.
The dashboard currently includes information on five product supply chains: Cocoa and cashew from Cote d’Ivoire, coffee from Brazil and Vietnam, and onions and garlic from the US. Olam plans to add more supply chains as the programme expands, eventually covering all 4.7 million farmers in its supply chain by 2025.
Screenshot of AtSource displaying sustainability performance of Olam’s supplier farmers
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Benefits
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- Olam’s customers can track the sustainability performance of supplier farmers, and in turn, understand if they are meeting their own sustainability targets.
- Provides consumer-ready stories about the positive impacts on farmers and communities.
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Other companies have also deployed technology to monitor the activities in their supply chains, ensuring that suppliers or contractors adhere to sustainability standards set by the company.
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Thai Union and Mars Petcare: Satellite connectivity and e-log books on fishing fleets
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What
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To guard against illegal, unreported and unregulated fishing and monitor labour standards on fishing vessels, Thai Union and its customer, Mars Petcare, worked together to strengthen human rights due diligence using technology.
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How
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Thai Union and Mars Petcare implemented a digital traceability system allowing crew members to digitally-record information on fishing methods in an e-logbook, including information such as catch time, catch location, species caught, the volume of fish caught and where the fish are stored. Details on labour standards are also captured, such as the number of crew on board, working conditions and working hours. This improves the efficiency and validity of key information recorded in their supply chain, compared to the previous method of recording the data manually in the captain’s logbook.
E-log book used to record details of fishing catch
To allow for satellite connectivity while out at sea, Thai fishing vessels were outfitted with ‘Fleet One’ terminals, designed by Inmarsat for the fishing industry. Satellite connectivity then allows crew members, captains and fleet owners to use ‘Fish Talk’, a chat application allowing them to connect with families and peers around the world while at sea – an industry first for Thai fisheries.
‘Fleet One’ terminals installed on Thai fishing fleets to give them connectivity out at sea
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Benefits
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- Allows catch to be tracked in detail from its place of origin to the consumer, while reducing errors in data entry, as details are recorded at the time of capture. This demonstrates end-to-end traceability and supply chain management.
- Satellite connectivity on board fishing fleets improves the welfare of crew members as they are able to communicate with loved ones, as well as provide crew with a channel to communicate any violations in labour standards. It also allows markets, traders or regulators on land to receive instant updates with information captured in the e-logbook.
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