Given fraud risks and consumer demands, supply chain companies are trying to find ways to increase their transparency. The goal is to leverage trustworthiness to differentiate themselves from their business rivals.
But what is radical transparency, exactly? And how does it work?
Radical transparency attempts to bring as much company data into the public domain as possible. For instance, imagine being able to walk into the office on a Monday morning and instantly find out how you and the rest of your team performed over the previous week. Under a regular system, unearthing that data wouldn’t be possible. But with radical transparency, it is.
While this concept might sound a little scary, business leaders see being radically transparent as a method for driving organizational performance and change. The idea that both customers and colleagues know everything could help brands get out of a rut and move forwards in their industries.
According to many research firms, lack of transparency is one of the major reasons why businesses fail. Without proper flow of information, people get off track and fall short of their targets.
Currently suppliers are having to deal with the following problems:
However, radical transparency offers the potential to deal with all these issues. Grunaular information sharing means that firms can work alongside consumers and share product and food traceability information with them. For instance, technology now exists to enable consumers to track an item’s movement through the supply chain by reading NFC tags directly applied on products. This can be described as last mile traceability. Still thanks to the help of technology it is possible to cover even the first mile traceability step. Using IoT devices, geolocators and environmental sensors you can follow the path and the conditions of raw material and ingredients in real time. On top of that, Blockchain-backed technology can be used to provide an immutable record tracking items’ journeys, letting consumers confirm brand claims and ultimately making the whole process radically transparent.
Concepts such as freshness-based contracts could revolutionise the way the food industry works. Instead of relying on easy-to-manipulate product labelling, freshness sensors could provide real-time data to blockchain networks that suppliers can’t manipulate. Combined with the Internet of Things, this could change how supply chains work and prices operate. Distributors would have a greater incentive to ensure that food gets to market as fast as possible.
Neuroscience backs up the radical transparency concept. When individuals are not transparent and try to hide information, they are more likely to expend energy covering up their mistakes or dwelling on errors. Full transparency can eliminate these temptations from the start.
It may also improve supply chain performance and efficiency. Firms will no longer feel the need to try to cover up their mistakes if traceability systems provide all participants with all relevant information. Instead, they will simply work to correct their mistakes and move on.
Many modern companies are already experimenting with radical transparency and using it to improve their performance and win in the marketplace. The reason it works is because it helps customers, partners and employees feel authoritative. When there is a record of all transactions, brands can build loyalty and trust without the need for painstaking, long-term PR drives.
Companies are winning with truth and radical transparency in many different ways. Some, for instance, are making internal data public, including their sales, revenue and salary numbers. They are discovering that this openness improves company performance.
Other brands are being more open about the data they collect and how they use it. For example, technology firms are providing access to detailed articles on how they collect and share information, and what they do with kids’ data.
Lastly, some companies are using blockchain to improve transparency. Supply chain firms are reading product tags and then uploading provenance information to blockchain networks. This then creates an immutable record that neither they, nor anyone else, can manipulate.
How you increase transparency in your business depends primarily on how you operate. For most firms, the following strategies apply:
Unfortunately, all of these traditional strategies rely on somebody making a decision to be more open and honest. In reality, incentives for individuals to share information may be weak. Thus, firms need technology-based systems that enable them to build trust without relying on virtue alone.
Blockchain is a great example of an enabling technology that facilitates change. It allows supply chain companies to build internal and external trust without requiring a heroic effort by management. Simply tracing the movement of products through the supply chain using an immutable blockchain network gives access to all the provenance, pricing and quality information that stakeholders need.
The best way to implement radical transparency and openness in your organization is to work with a partner who understands and masters the underlying enabling technologies. Authena provides businesses with powerful technologies that make it easy to track goods as they make their way through the supply chain and then post data on publicly-accessible networks.
The way the concept works is simple. Companies begin by tagging shipments of products at their source using IoT devices such as NFC tags and other types of sensors. Agents in the supply chain then read these with their smartphone as they move through, creating an immutable record in the blockchain of where they came from and the date of processing. At any stage, anyone, including final customers, with a simple smartphone can confirm the origin and authenticity of goods, and view a record of their journey, thereby generating trust without the need for an overarching authority.