Importance of supply chain transparency in consumer electronics
Supply chains involve the movement of components and finished products from suppliers to manufacturers, distributors, retailers, and ultimately to end users. The efficiency and visibility of a company’s supply chain, therefore, can have a major impact on the success of their business. For the consumer electronics (CE) industry, one that requires a fast and huge product churn, this is especially important.
We explore the challenges faced by supply chains in the consumer electronics industry and how transparency can help.
The problem with supply chains
They are complex
Supply chains can involve numerous stakeholders, processes, and locations. For consumer electronics products, a typical supply chain starts with the extraction of raw materials such as minerals and metals from mines in different countries. These materials are then transported to multiple manufacturing facilities where they are processed and assembled into components. The components are then transported to assembly plants where the end product is assembled. Finally, the end products are distributed to retailers and sold to consumers.
Did you know?
A single modern smartphone contains components from more than 200 different suppliers.1
There is a lack of visibility
Many businesses struggle to have a clear view of their entire supply chain, including the activities and processes happening across the various stages of materials sourcing, manufacturing, and distribution. Without visibility, it can be difficult for companies to track the origin of raw materials, monitor the manufacturing processes, and by doing so, ensure ethical and sustainable practices.
Did you know?
A typical notebook PC contains more than 240 substances.2
Coordination is challenging
Effective coordination among the parties results in smoother operations, timely deliveries, and efficient inventory management. However, successful supply chain coordination across different organisations and multiple locations can be challenging, with delays due to miscommunication or missed information.
Did you know?
One major CE player in 2019 had 2,389 first-tier suppliers across 216 global bases, spread across 74 countries.3
How transparent supply chains can solve these issues
Compliance and risk mitigation
Transparent supply chains help businesses comply with regulations and mitigate risks. By having visibility into the entire supply chain, companies can ensure that their suppliers and partners adhere to ethical and legal standards which reduces non-compliance risk, reputational damage, and legal consequences.4
START helps by providing 14 ESG metrics across Planet, People, and Progress so you know your products are responsibly produced.
Improved efficiency
By analysing data and information from different stages of the supply chain, companies can identify areas for improvement, optimise processes, and reduce costs. For example, tracking the movement of components and products in real-time allows companies to identify delays and take corrective actions to improve delivery times.5 START helps to identify where your products are at each point of time so you can optimise your inventory and flow.
Customer trust and brand loyalty
Supply chain transparency builds trust with customers. Consumers are increasingly concerned about the ethical and environmental impact of the products they purchase, including consumer electronics. By providing transparency into their supply chains, businesses can demonstrate their commitment to responsible sourcing, fair labour practices, and sustainability—fostering customer trust and brand loyalty.6
The future of transparent supply chains: START with us
Supply chains are mired with complexity but START removes the guesswork hidden in today’s supply network, making it easy to see the impact our materials have.
Through creating transparency, START helps alleviate some of the pain points of a classic supply chain.
We provide the information you need to meet your sustainability goals with provenance information so that you can make well-informed business decisions.
References
1 Webb, H. 2022. ‘The global supply chain of a mobile phone’. Ethical Consumer.
2 HP Development Company, L.P. 2019. ‘HP Product Material Content Information’.
3 Lawrence, M. 2019. ‘How Samsung drives sustainability across its supply chain’. Supply Chain.
4 Gaur, V & Gaiha, A. 2020. ‘Building a Transparent Supply Chain’. Harvard Business Review.
5 6 River Systems – Warehouse Operations. (2023). ‘28 supply chain professionals share the biggest challenges of supply chain management’. 6 River Systems.
6 QIMAone. 2020. ‘4 Benefits of Supply Chain Transparency’. QIMAone.
7 West, D.M. 2022. ‘Six ways to improve global supply chains’. Brookings Institution.
8 Lockhart, J.W. 2022. ‘Sourcing for Sustainability: How to Build a Transparent Supply Chain’. Shopify.
9 Harbert, T. 2020. ‘Supply chain transparency, explained’. MIT Sloan
10 Kraft, T. & Zheng, Y. 2021. ‘How Supply Chain Transparency Boosts Business Value. MIT Sloan.