SupplyChainTalk: Building and maintaining consumer trust in retail supply chains  

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Views on news 

Amazon has become the first retailer in the UK to start a drone delivery service with a limited launch in Darlington, County Durham. Packages weighing less than 5lb (2.2kg) and containing everyday items such as beauty products, bin liners and cables are now being delivered within a 7.5 mile (12km) radius of Amazon’s fulfilment centre.

 

While there are excellent use cases too, the parameters of drone delivery limit the types of parcels that can be shipped to customers this way and there are some safety and noise concerns about deployment as well. The long-term benefit for Amazon is the data they can gather this way.  

 

Getting more transparent about ethical sourcing 

Although businesses can audit their suppliers with third parties, they can’t monitor a supplier’s operation continuously. However, to keep customers’ trust, it’s key that the brand is honest and transparent when some bad practice surfaces. Traceability – the sharing of the digital trail a product leaves – which was formerly a nice-to-have, is becoming a regulatory requirement now. Customers who don’t just care about the price must have access to a digital product catalogue through a QR code to check where and how the item was manufactured. Brands shouldn’t have concerns about having to reveal who their tried and tested suppliers are as they must demonstrate good practices to auditors and consumers, not actual names.

 

The EU’s Carbon Border Adjustment Mechanism (CBAM), already implemented in the EU and coming to the UK soon, isn’t about opening up a company’s supplier book either but providing evidence that can back up compliance. There are also ways to share supplier information with customers without risking losing a business’s competitive advantage, but brands must establish what granularity of information their customer base in fact requires.  

 

The biggest challenge is not the lack of data but connecting existing data sources, and AI can be instrumental in enabling that. However, the data coming from suppliers must be validated too, and if the data is wrong, ways must be found to get the supplier to correct it.

 

Traceability and communication with suppliers can be further enhanced through live factory feeds but not all suppliers have the capacity or the will to allow that. There are also great solutions that factories can register with enabling the tracking of local audits, while in-person factory visits remain very impactful too. The most efficient transparency systems are the ones that cover the entire supply chain end to end through data capture. Once brands have identified existing data gaps, they must find methodologies and technologies to fill them too. 

 

The panel’s advice 

• The level of supplier transparency required also depends on the kind of customer base your brand has.  
• Sustainability is much more complex than local versus global. It’s also about total supply chain impact including manufacturing efficiency, inventory and waste management and types of transport.