Monday, February 18, 2013

Using IT to increasing transparency

The recent scandal in the UK involving beef tainted with horse meat has resurfaced the issue of supply chain complexity -- specifically, the tradeoff that manufacturers make between transparency, speed and cost. As supplier networks have become increasingly longer, more complex and more widely dispersed, information about where products are coming from and the processes used to produce them has become hard to trace. As is in this most recent case of tainted meat, this breakdown in the flow of information can have substantial consequences for companies.

As the global economy continues to expand and "flatten", it is unlikely that supply chain networks will become any less complex -- in fact, it is more likely that the exact opposite will happen. Additionally, consumers are becoming much savvier and more demanding when it comes to knowing where the products they are purchasing are coming from. Given these facts, what can companies do in order to increase transparency?

One way that companies have started to track their products through the supply chain more carefully is through the use if technology like RFID tags and radio dust. Other IT tools such as bar codes and QR codes have also become ubiquitous. But these tools and technologies have primarily been used by companies internally to track the movements of their products through the supply chain. How can existing IT systems be expanded or altered to use this same tracking technology to provide more information to consumers? Is it possible or desirable to link existing databases in such a way that consumers can research the origins of products online before they go to the store to make a purchase? And finally, what might be the unintended consequences -- consumers demanding more ethical or socially/environmentally responsible practices from producers? This tradeoff between providing more information to consumers and the possible resulting impacts on the supplier network needs to be considered carefully.


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