CONNECTION: THE EVOLUTION OF SUPPLY CHAIN MANAGEMENT
Modern buyers and investors expect brands to conform to high standards of ethics in their labor and environmental policy. In order to meet these expectations, brands must be able to verify compliance with laws and regulations throughout their supply chain.
One common solution is the use of single-user supply chain management software, distributed to each supplier for individual data input. However, using software in this way creates extra work, both for suppliers who have to learn to implement the software and for brands who must collate data from each supplier. By connecting individual instances of software through a platform, brands can overcome these challenges and markedly increase the efficiency and effectiveness of their supply chain management.
Demonstrating transparency in a supply chain requires individual factories, sites, and manufacturers in the chain to demonstrate their compliance with required regulations and with guidelines from registries such as CDP and ZDHC. Doing so requires a long list of actions, including:
- Establish which standards they will be working towards
- Collect data on their chemical inventory, water use, and other appropriate metrics
- Aggregate this data and compare it to compliance standards
- Report findings back to regulators
- Develop methods for managing all this work while identifying issues and tracking progress.
Single-user software can provide many useful tools to help suppliers complete this extensive list of tasks, including automated data input, graphing functionality for collating and comparing data, and report generation. However, when each of a brand’s suppliers are using different software tools independently, the brands using those suppliers face the near-impossible task of collating all this data from different sources into a coherent picture.
If single-user software is a set of tools, then a software platform makes the space for conversations around those tools. An effective platform allows for cooperation instead of disconnection, for collaboration instead of top-down supervision, and for gradual evolution instead of drastic transitions. A compliance platform can have many users—including suppliers, their buyers, chemical manufacturers, testing labs, and regulators—all connected in a shared space.
Platform connections bring a number of advantages. For example, a supplier looking to complete an audit of their chemical use might find that single-user software make this process much easier. However, a supplier completing an audit through a software platform will not only be better able to meet the audit’s requirements, but can also distribute their results to many potential new buyers. Brands using a software platform can not only clarify their own compliance standards, but also compare them to those of other brands to develop a more robust picture of their suitability. Labs reporting results to their clients by uploading them to a software platform can share recommendations from satisfied clients with other facilities in their region. In short, all the improvements to efficiency and performance that single-user software can develop are amplified by the connectivity and collaborative elements that a software platform provides.
Of course, to provide these benefits, a platform must be adopted by a critical mass of users. Unlike single-use compliance software, which requires each supplier to purchase a license and implement the software across facilities and employees before seeing benefits, well-designed software platforms allow suppliers to integrate at their own pace. At first, the brands that are a platform’s initial adopters can invite their suppliers into the platform to complete a small piece of the overall compliance picture. For example, they may ask a supplier to complete a self-assessment questionnaire, which allows the supplier to understand the buyer’s expectations, and offers the buyer an initial view of the supplier’s level of compliance. Following this initial exposure, suppliers who have been invited into the platform can explore and adopt additional tools to improve their rate of compliance. Buyers may also offer tangible benefits to encourage expanded adoption, such as matching purchasing volume with certain levels of compliance.
Once an initial set of users are committed to adopting a platform, adoption will expand organically. Each user will have more to gain from the platform if more of the suppliers, buyers, and labs it works with also use the platform, so they are incentivized to invite these additional users to come on board. Well-designed platforms can grow quite quickly into complete, connected ecosystems of brands, suppliers, and labs, mutually benefiting from cooperation in a shared space. CleanChain’s integration with the ZDHC Gateway stands as a powerful example of a successful transition from software to platform. With the data management and report generating tools provided by CleanChain as a foundation, buyer users of the ZDHC Gateway are able to source additional suppliers who meet their reporting criteria, while supplier users are able to leverage information compiled across multiple buyers.
Ensuring compliance in the supply chain can be a considerable challenge for both brands and suppliers. Although the tools of single-user software can make this process a lot easier for suppliers, the potential of these tools is limited by their disconnected nature. Organic, multi-user software platforms like CleanChain and the ZDHC Gateway breathe life into mechanical tools by creating space for connections between users, resulting in a system of mutually reinforcing benefits for brands and suppliers alike.
CleanChain, an ADEC Innovation, helps you gain visibility and insights into the chemical use in your supply chain. Want to find out more? Book a free demo with us today to find out how CleanChain can help you engage your supply chain and improve your chemical management initiatives.