The first step in building trust is improving the transparency of how products move through the extended supply chain. Greater visibility reduces the opaqueness that exists today — opaqueness that leads to misgivings between partners and the inefficiencies that follow.
Retail provides a useful illustration of the benefits of transparency. The retail industry differentiated itself by its early adoption of technology that streamlines supply chain processes and enables data capture (think barcoding and the scanner at the checkout counter). This critical supply chain transformation began when large industry players decided to focus on the “first moment of truth” — the moment a consumer first encounters a product — and moved toward a consumer-driven supply network.
During this transformation, the retail industry focused on ensuring that product was available at the shelf when the shopper wanted to buy it. This meant delivering product in the most efficient manner, damage-free and with sufficient product dating (for products that had expiration dates). Today, the consumer-driven supply network depends on understanding the complete movement of product; from point of manufacture to the store shelf. Success hinges on identifying opportunities to streamline the supply chain and make it more responsive to changing consumer tastes or needs. How information flows is just as important as how product flows.
Global adoption of the barcode and data standards, such as GS1, provided a platform to give all partners real-time data visibility into product movement. This foundation led to improvements in trust and, subsequently, performance. Because of readily available data from standard data sources (like GS1), stores that were once regularly out of stock on highly favored items were able to reduce out of stocks, or eliminate the problem altogether (think of the inkjet in-stock promise many office supply retailers offer). At the same time, retailers could quickly replace products that weren’t moving, such as garments, with those that were, dramatically reducing end-of-season markdowns and obsolescence write-offs.