Our study examined twenty multinational companies and their supply chain disclosure decisions. We found a number of principles that underpin their disclosure strategies: holistic understanding, supportive infrastructure, data requirement knowledge, essential information interpretation, strategic alignment, mitigating the information burden and communicating good news.
Recurring corporate scandals from incorrectly labelled horse meat, unsafe toys, illegal dumping, to exploitative work practices continue to keep the issue of supply chain disclosure to the fore as a key strategic concern. Here we take supply chain disclosure to mean the release of accurate, comprehensive and cogent information about the supply chain into the public domain.
While improved supply chain disclosure is generally regarded as a positive development by most stakeholders, it can highlight a range of challenges for managers. As companies grapple with frequently conflicting demands from internal and external stakeholders they are faced with a range of impediments in their attempts to gather ever-greater quantities of high-quality, detailed and reliable data across a multi-tiered, fragmented and geographically-dispersed supply chain.
Our research finds that some companies appear to be managing the process of supply chain disclosure more effectively and strategically than others. Here we summarise our findings in terms of what sets these companies apart.
Principle 1: Holistic Understanding of Current and Future Demand for Supply Chain Information Disclosure
Certain companies tend to have a deep grasp of the demand for improved supply chain information disclosure. They appreciate that prior to developing an appropriate disclosure strategy, the variety of demands for supply chain information need to be fully understood and potentially conflicting tensions managed. One key risk is that a company may disclose too much information exposing core competences and key sources of intellectual property to competitors.
Pressures such as regulation, behaviour of exemplar companies and increasing demands from customers, NGOs, the media and academics need to be identified and managed. Proactive companies can stay ahead of the curve through industry collaborations, such as the Electronic Industry Citizenship Coalition (EICC), which drives disclosure and sustainability best practice in the electronics industry. Other cross-industry collaborations include the Ethical Trade Initiative (ETI), which started in fashion but now encompasses a multitude of other industries.
About the Authors
Dr. Lucy McCarthy (left) is a lecturer in Queens University Management School. Associate Professor Paul McGrath (centre) and Professor Donna Marshall (right) are faculty members of the University College Dublin (UCD) College of Business and Donna is the Director of the UCD Centre for Business and Society (CeBaS). They are co-authors of the article “What’s Your Strategy for Supply Chain Disclosure?” recently published in Sloan Management Review.
1. An interview with Paul Polman found here: http://fortune.com/2017/02/17/unilever-paul-polman-responsibility-growth/ and a list of the sustainable development goals can be found here: www.un.org/sustainabledevelopment/sustainable-development-goals/
2. Marshall, D., McCarthy, L., McGrath, P. & Harrigan, F. (2016) What’s your strategy for supply chain disclosure? MIT Sloan Management Review, 57(2): 37-45.
3. Nike interactive map: http://manufacturingmap.nikeinc.com/ and sustainable business report: file:///C:/Users/3050225/Downloads/NIKE_FY14-15_Sustainable_Business_Report.pdf