Is anything for your eyes only?

Sensemaking / Is anything for your eyes only?

Duncan Jefferies asks where the intensifying trend for transparency could lead.

By Duncan Jefferies / 01 Mar 2015

If the last ten years have taught us anything, it’s that governments, organisations and individuals can either be transparent by choice, or they can be made transparent by whistleblowers, NGOs, hacktivists or concerned citizens. Either way, secrets don’t remain secrets for long in a digital world.

Tools that were once the preserve of the military are now within reach of NGOs and other groups. The WorldView3 satellite, for example, operated by the commercial space imagery provider DigitalWorld, can read a car number plate, tell you how moist a patch of soil is, differentiate between tree species and even determine the health of individual trees, and identify minerals too. Anyone willing to stump up USD4000 can buy 100 sq km of imagery: the company’s minimum order.

For just £50, citizen journalists can buy a drone equipped with an HD camera and beam aerial footage directly to their smartphone. Apps like Good Guide allow consumers to gain detailed insights into the ethics and sustainability credentials of products they’re buying simply by scanning a barcode. While at the other end of the supply chain, smartphones and social media have made it easier for factory workers and small-hold farmers to highlight cases of environmental damage, child labour, human trafficking, corruption and illegal mining activities. A quick photo or tweet is all it takes to inform the world of a problem – providing you have a phone and data access.

This reduction of the gap between the people that make things and the people that buy them is one of the factors nudging businesses toward hyper-transparency. An open, honest supply chain strategy is also increasingly important for consumers, which has encouraged companies like Marks & Spencer, Nike, H&M, Walmart and Patagonia [see boxout] to put it at the heart of their operations. Some brands, like the clothing retailer Honestby, are even marketing themselves as “100% transparent”; others, like One Degree Organic Foods, have added QR codes to their product packaging so that consumers can trace every ingredient back to its source.

Next year the UN’s Sustainable Development Goals kick in, pushing transparency even higher up the agenda for companies who want to deliver on these ambitions. Other forms of legislation, such as the Modern Slavery Bill in the UK, the Dodd Frank Act, and the California Transparency in Supply Chains Act, show governments are taking business transparency seriously too.

“Leading companies now realise that in a hyper-transparent world, it's in their interest to find out what's happening in their supply chain before someone else does”, says Heather Franzese, Director of Good World Solutions, which provides mobile and web tools for monitoring supply chains.

One of these tools, Labor Link, allows businesses to tap into real-time data from workers, and address problems before they become serious – or shared on Twitter. Any worker can call Labor Link’s anonymous, voice-based service and answer simple, multiple-choice questions with their phone keypad. Good World Solutions then cleans and analyses the data before turning it over to the client company. M&S is one of a number of corporations to embrace the tool, which will reach 22,500 workers in 30 of its supplier factories in India, Sri Lanka and Bangladesh.

In future, predictive analytics could be applied to the data to help prevent tragedies like the Rana Plaza factory collapse, which killed more than 1,000 people. Franzese also expects to see transparency tools reach further down the supply chain tiers, to offer more scope for reporting on environmental issues as well as labour ones. “With some kind of wearable technology, workers could reliably report on environmental indicators like air and water quality”, she says.

One problem for companies that want greater insight into their supply chain is data paralysis: they end up inundated with so much information it becomes difficult to sift the issues that need immediate attention from those of a more trivial nature. Added to this is the risk that suppliers will become exasperated by requests for ever more detailed data and simply start to ignore them, leaving gaps in the organisation’s view of its supply chain.

The Supplier Ethical Data Exchange can help to ease this burden on suppliers: it was set up to address the need for them to undergo multiple audits in order to satisfy the ethical and environmental standards of various customers. Instead, suppliers share one set of information from one audit with multiple buyers. Mark Robertson, Head of Marketing & Communications at Sedex, says the organisation now has 37,000 members, “so you can imagine the impact we're having in increasing transparency – collecting huge data sets, for example.”

While Robertson agrees that transparency is generally increasing, he also feels that few companies are taking their responsible sourcing programmes beyond their first-tier suppliers. “It's partly because they don't have the means to do that”, he says. “Or perhaps they…just assume that the first tier is where they have most influence and there's no point in going beyond that.”

One proposed solution could make it easier for them to do so. String3, from the value chain data company Historic Futures, is a secure online service that collects data directly from the organisations at every stage in the chain. The retailer logs in and asks their questions to their immediate supplier, for instance: where is the cotton in this t-shirt from? The supplier states whether they made it or bought it, and if they bought it, they in turn ask the same question of their supplier. The process repeats until the organisation with the answer responds – which could be a supplier many levels down the chain. The key is asking for information as and when it is required, rather than a blanket level of information on every product supplied. This reduces the need for complex data uploads and addresses the issues of time and cost.

More and more, failing to ask the questions is likely to be a mistake. “The most critical risks tend to exist much further down tiers in the supply chain”, says Robertson, “and you only need to look back over the last couple of years to see some very clear examples of that.”

Horsemeat was one high-profile scandal – thousands of products in the UK and Europe were found to contain traces of horsemeat and some, such as Findus beef lasagne, were found to be up to 100% horsemeat (the company has now joined Sedex). In East Asia, gutter oil was found in mooncakes during the 2014 mid-autumn festival of the moon. It emerged that Taiwanese lard had been mixed with cooking oil illegally ‘recycled’ from the grease traps that collect waste in sewers – and exported to Hong Kong and Singapore.

Improving supply chain transparency can grant you insights into these risks, says Robertson, but what really matters is what happens when you discover a breach of your ethical or environmental guidelines. “Transparency is one thing”, he says, “but that has to be backed up with meaningful actions and evidence that issues are being tackled, that opportunities are not being missed, and that companies are adapting and evolving to future trends.”

In other words, sweeping things under the rug is no longer an option when everyone can see through it.

 

Duncan Jefferies is a freelance writer and editor specialising in innovation and technology.  

Image credit: Brandon Watts / Flickr

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