An old business expression says "nobody wants to know how the sausage gets made." Thanks to the information age and socially conscious consumers, however, this cliche no longer holds true.
Customers not only research companies to see where they acquire their raw materials, they favor socially conscious companies. A Software Advice survey reported over a quarter of consumers would actually pay more for products if they knew the merchandise was created through fair working conditions and eco-friendly production and inventory management. If businesses want to appeal to these audiences, they need socially responsible practices and data to prove they're enforcing proper standards.
This is one of the reasons Golden Agri-Resources vowed to create complete palm oil supply chain visibility by the year 2020, according to Forbes. Palm oil is a very popular product, but it is not easy to acquire the necessary ingredients. Companies like Golden Agri-Resources rely on manufacturing supplies with poor reputation or growing public and federal scrutiny. These organizations may want to reevaluate their supply chain logistics management in the near future.
By providing consumers data captured through procurement, production and warehousing, businesses can show how they play by the rules and differentiate themselves from competition that doesn't.
Accounting for Problematic Supplies
Palm oil is difficult to produce. It involves a lot of space and countries like Indonesia clear away huge tracts of land to grow the product. This may endanger local flora and fauna or involve unfair working conditions to harvest the crop.
If U.S. companies want to access materials produced in foreign countries, they need to turn to a global supply chain. Maintaining oversight of multiple locations separated by massive geographical distance is not always easy. Sustainable Brands reported Golden Agri-Resources will need to account for the actions of 489 individual mills if they want complete visibility by 2020. So far, the company has mapped out its supply chain and plans to have 44 percent traceability by 2017.
It's not enough to establish initial contact with each location and draw up rules for production and delivery activities. Businesses must be able share exact details about where materials come from and how they are created, prepared and assembled.
A Clear Supply Chain Picture
Companies must know exactly how materials are produced and compare that information to what modern consumers expect from businesses. In some cases, when an organization prioritizes visibility for the sake of marketing, it focuses on positive terminology and ignores what's actually the most socially responsible action.
For example, The Globe and Mail suggested many consumers look for eggs produced by free-range chickens, when that's not always the healthiest option - for consumers or the chicken. Sometimes, when free-range chickens aren't restricted from other populations, problems like disease and cannibalism can run rampant. Many animal experts advise companies to enlarge cages and fit them with convenient options, rather than bow to conventional wisdom.
If business leaders truly want to be socially responsible, they have to perform actions designed by their own consciences. Once the company creates supply chain logistics and manufacturing processes built on moral standards, its up to the organization to communicate why its way is the responsible choice.
Sometimes, people seek warning signs about social irresponsibility when researching brands, but its not uncommon for major media events to bring problems to the attention of consumers. Quartz said many modern populations avoid diamonds harvested from conflicted regions due to popular films and celebrity advocacy for other options.
It is possible to grow diamonds in a lab these days, but manufacturers have to contend with decades of tradition. Companies can start by sharing the information associated with where actual diamonds come from and then present their internal information to show how consumers can play a part in social responsibility. Once the business integrates publicly available information, it should communicate how its process for manufacturing and supply chain works to improve the planet.
In the case of diamonds, real-time data collection solutions can present consumers with other incentives. When manufacturers have access to customer orders they can create diamonds to exact specifications. Besides social responsibility, modern consumers also want personalization. Accurate data collection can help companies provide both.