WORLD: Poor quality value chain data impacts business
Historic Futures is developing its technology to make value chain mapping simpler
A lack of information about where their products come from has been flagged up by brands, retailers and suppliers as having a real impact on business performance - but there is also confusion about what data is needed and how much.
The findings from a recent survey not surprisingly suggest that information about where products come from is essential. Indeed, more than 80% of retailers and brand owners believe value chain data is important for quality and performance, as well as understanding the social and environmental impacts of their products.
But most also say they are not getting enough data from their immediate suppliers to find out about the rest of the value chain.
The study by Historic Futures, developer of the String traceability tool, found the main barrier to collecting value chain data was a lack of understanding of the benefits it could bring.
These include better and more informed sourcing decisions, simplification of value chain structures, opportunities for lead-time improvement, verifiable best practice stories for consumers, and product compliance and tariff management.
There is also confusion about what data is needed and how detailed it needs to be in order to make effective judgements about value chains.
While more than three-quarters of respondents suggested location of suppliers and raw materials, working conditions, resources (water and energy), and compliance with third party standards would be necessary information, Historic Futures believes the level of data required really depends on the business case it needs to support.
For example those wanting to manage their risk perhaps just need to know the location of raw materials. Whereas those wanting to know not only the origin of raw materials, but how the product was made, by whom, using how much energy and water, will require greater and more accurate data.
The research found that for most organisations just being able to know where raw materials come from would be a good place to start.
It also seems there is an element of evading responsibility for collating information on the many steps in the supply chain.
While almost half of respondents said this should be shouldered by brand owners, retailers and brands said they only need to know the direct suppliers of their products - and that they expect their suppliers to know their suppliers, and so forth.
When it comes to building increased awareness of their value chains, most respondents think the necessary information will be available within 2-5 years, while one-fifth suggest a timeframe of between one and two years.
"This research shows that many companies are starting to recognise the importance of knowing more about their value chains, yet have uncertainty over the level of data that is needed," explains Tim Wilson, founder and CEO of Historic Futures.
"The biggest challenges are both the need for increased awareness about the business cases and effective technology and tools to enable data collection. We are now exploring the many different business cases for value chain mapping, and the level of required data to achieve these with the aim of increasing awareness amongst decision makers."
Historic Futures is developing its technology to make value chain mapping simpler, and is looking for organisations to pilot the new software when the prototype is ready later this year.
In an interview with just-style earlier this year, Wilson argued that without knowing the precise history of the products it sells and then being able to verify the claims it makes, the apparel industry will never be able to make a real difference to issues ranging from sustainability to illegal subcontracting.
Click on the following link to read: INTERVIEW: String traceability tool goes back to basics.
An interactive databank with intelligence on the major apparel sourcing countries
- Yuan devaluation impact mixed for garment firms
- Will Vietnam struggle with impending trade deals?
- Nicaragua apparel and shoe firms to double in size
- The new age of disruption on apparel production
- China devaluation: what’s the big deal?
- H&M scaling up living wage effort to key suppliers
- US Q2 in brief: G-III, Shoe Carnival, J Crew
- Myanmar approves first minimum wage
- EU clothing buyers should brace for higher prices
- Adidas seeking to resolve shoe supplier dispute
- Global Database of the Top 1000 Apparel Producers - Company Names, Financial Performance, and Contact Details
- Ethiopia – the emerging textile and clothing industry
- Myanmar's Garment Sector in 2015 - now with updated members' directory
- Global market review of lingerie - forecasts to 2020
- Global market review of denim and jeanswear – forecasts to 2020