Networks of Trust: The Quest for Transparency and Traceability in an Era of Consumer Mistrust
Over the last two years, we have seen the dark realities of the Anthropocene unfold as the impacts of climate, health, humanitarian and geopolitical crises converge on our global trade system. Whether it be lockdowns in manufacturing hubs, spillover impacts from the Russia-Ukraine war or bottlenecks caused by Hurricane Ian and other extreme weather events, the world has witnessed a spectacle of unprecedented backlogs and dangerous disruptions that has directly impacted consumer-facing industries.
It is within this context that the vulnerable underbelly of our global supply chain has revealed itself as an opaque ecosystem of disparate actors. United by their physical infrastructure yet divided by their lack of digital collaboration, these supply chains suffer from insufficient data across their network, resulting in inaccurate forecasting, extended lead times and the bullwhip effect.
From the consumer’s vantage point, instead of solely seeing a brand, they now see the long shadow of a product’s supply chain. And if green-proofing wasn’t hard enough, the purchase criteria for value-oriented consumers has only become more complex. According to the results of our latest consumer research, not only do consumers need to have confidence in the brand, but they need to trust the many actors involved across the product’s supply chain.
Hurt by empty promises and weary of green-washing, consumers are no longer bestowing trust based on innocent, upbeat marketing messaging. Trust, instead, is earned through evidence. In a survey conducted by Havas in mid-2020 during the height of the pandemic, 71% of consumers weren’t convinced that brands would deliver on their promises and only 34% thought that brands were transparent about their commitments and promises. But just as convenience became a basic consumer expectation, the demand for transparency will increasingly become the baseline for any consumer product experience.
To evolve toward long-term security, sustainability, inclusivity and resilience, supply chains need to become digitally enabled networks defined by trust. Creating a network of trust requires more than longstanding relationships. It requires more than employing technology that can connect different actors and enable transparent, seamless data exchange. And finally, it requires more than trusting the data that your business gathers. The crux of creating a resilient supply chain is the trust you establish with each actor across your supply chain and therefore, trust in the data they produce. Because, as the horsemeat scandal of 2013 taught us — also known as Horsegate — without end-to-end data capture and transparent information sharing, winning consumer trust becomes a precarious game.
Stitching together the constituent parts of supply chains, promoting data exchange and establishing trust is not an easy feat. As you may guess, there is no single approach and the stakeholder’s role in the market will inevitably dictate the nature of their solution. Let’s look at three different approaches to solve the quest for transparency and traceability in an era of customer mistrust.
1. Everybody In, Nobody Out: The Aggregator Approach
Single source of truth bringing together public and private supply chain stakeholders
In March 2022, the Biden-Harris administration announced the Freight Logistics Optimization Works (FLOW) initiative, a pilot program to develop a digital tool that provides information on the condition of a node or region in the supply chain so goods can be moved quickly and cheaply. The initiative has kicked off to an impressive start with a growing number of participants that represent diverse perspectives across the supply chain, including several shippers (Target, Procter & Gamble, Samsung), carriers (Maersk, DHL, UPS, FedEx, and others), container terminal and port services (APL Terminals, Consolidated Chassis Management), and the freight forwarder Flexport.
With the goal of bringing down product costs for families, the FLOW initiative provides more transparency into how and where products are moving and dwelling. It’s sustained by a virtuous cycle whereby communication improves, then more and better data is available, followed by an increasing number of participants, and ultimately, improved delivery times and lower consumer costs. FLOW serves as an example of the public sector’s attempt to tackle underinvestment in longstanding supply chain issues by overseeing centralized data sharing between a wide range of private and public supply chain stakeholders.
2. Few In, the Others Out: The Partner Approach
Innovation to rethink current partnerships and supply chain processes
As you can imagine, the private sector has taken a different approach to the Biden-Harris administration. To avoid disruption and tackle their own bottlenecks, we have witnessed private businesses rely on a trusted set of partnerships to improve traceability by introducing new checks and balances to their supply chain.
A prominent example is Google’s collaborations with Minespider, a traceability platform empowering companies to create, capture and communicate sustainability efforts along their supply chains. Known for bringing greater traceability to copper, cobalt, lead, tin and other conflict-prone materials, Minespider’s upstream clients, including Minsur and LuNa Smelter, create blockchain-secured digital IDs called digital product passports to track their material shipments to downstream customers (among them, Google). Aside from containing provenance data, due diligence documents and carbon emissions data, these passports are a critical way to safeguard supply chains and to differentiate and add value to commodities.
Nathan Williams, Minespider Founder & CEO, underlines how “access to tracked responsibly-sourced metals is critical for the green transition.” As resource scarcity increases and natural materials become increasingly limited, it begs the question of whether private businesses will need to partner with solutions like Minespider to make their supply chains more secure.
3. Outside the System: The Lone Disruptor Approach
Redefining our global supply chains by making them localized
Paris-based Ulé Beauty has taken an avant-garde approach to addressing supply chain disruption. Their solution: Shorten your supply chain. Powered by fresh botanicals sourced from a vertical farm near Paris, Ule's seed-to-jar product range is entirely traceable.
Instead of relying on external aggregators or innovating your supply chain, this unconventional approach tackles the problem by targeting the main issue itself: long, multi-stakeholder supply chains. While this approach may only be suitable for smaller businesses and start-ups, it signals a new paradigm for supply chains. Abbreviating and hyper-localizing your supply chain not only reduces the risk of disruption, but enables the control, transparency and traceability that many seek.
So What?
As the market gradually evolves to develop more secure, sustainable and resilient supply chains, the aggregators, partners and lone disruptors of the world will be the ones to watch. This spectrum of approaches highlights the absence of a singular solution for addressing issues that face our global trade system. However, what’s clear is that trust is the common denominator and without it, the chain breaks. To that end, if trust is the objective, transparency is the medium and technology is the backbone.
By creating better communication streams between all actors across the supply chain, data accessibility and transparency will become the expectation for consumers and regulators. Enabled through technology advancements, this new standard will redefine supply chains so they’re flexible within global and local contexts, resilient to disruption and defined by trust.
