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The trend towards more transparency in supply chains

03.07.2017

Companies increasingly need to answer the demand of consumers and the public on how they source their products and mitigate risks related to their supply chains. This drives the demand for more transparency in supply chains. FLOCERT’s Director of Operations Sugumar Raman dives deeper into this trend.

Consumers, the general public and governments are pushing to know where their products come from and whether they were sourced in a sustainable way. Brands want to mitigate risks that are associated with issues like child labour or forced labour in their supply chains. As the assurance provider for Fairtrade, we at FLOCERT have been observing this trend closely for the food and textile sector, but also see that this is an overall trend in most consumer goods supply chains.

Brands need relevant information at the right time so that they can tackle risk-related issues in their supply chain just in time. However, they often face challenges to implement transparency measures throughout their supply chains especially in industries where supply chains constantly change. They therefore require a solution where crucial information can be shared within a supply chain, a mechanism that most reporting tools in the market, including our own, are currently not addressing.

So you could say it was a natural step for us to develop a platform – "Fairtrace", through which Fairtrade supply chains will be able to report and verify volumes and financial transactions from producers, all the way through to the importer, and, eventually the final seller. Business partners will be able to interact directly through the platform and raise any issues related to specific transactions. This greatly enhances transparency and collaboration. It also consequently puts producers in a better position as they get a better overview of where their products are getting sold, and relevant payments they should receive, thus supporting the Fairtrade mission of empowering producers. We are now launching "Fairtrace" and will first get Fairtrade certified cocoa customers on board. Concurrently, we also recognized that brands need such a solution for products which are not covered by Fairtrade, or for their own private codes. "Fairtrace" can be tailored to fulfill these needs as well.

In my eyes "Fairtrace" constitutes a real innovation for Fairtrade, since it enables a new collaborative approach to reporting, creating one truth everyone can trust in, and allows for a new way of assurance. I'm very happy that we're now officially launching it for Fairtrade cocoa supply chains!

This brings me to a final important aspect, and also a look into the future of "Fairtrace": We need to be aware that everything we ask off supply chain members is an incremental task over their normal day-to-day business. For FLOCERT this also means that "Fairtrace" needs to be easy to use and beneficial at all levels of the supply chain. We are hence looking into how "Fairtrace" would connect to existing IT systems of members to avoid double data entry, and also ensure that information received from "Fairtrace" is transmitted, enabling members to integrate this data in their everyday operations and thereby respond to supply chain risks in an agile manner. "Fairtrace" will not only factor these elements going forwards, but will also be rolled out for all other Fairtrade product categories, gradually.

 

Creating transparency in supply chains with Fairtrace

 

 

Sugumar Raman is FLOCERT’s Director of Operations. He also has a quirky hobby – people watching.