Retailers and brands are feeling the pressure to know more about where their products come from, but are finding it challenging to gather information about their value chains.
In a recent report conducted by Historic Futures, a supply-chain traceability solutions developer, 63 percent of retailers and brand owners said a lack of information has a real impact on business performance.
The research also revealed the significance that all organizations now attach to knowing where products originate, with 9 out of 10 retailers and brands finding value in understanding the social and environmental impact of their products. More than 80 percent said this information is important for product quality and performance.
Tim Wilson, founder and CEO of Historic Futures, said companies are just unsure of the level of data needed to map a value chain. The survey revealed the varying degrees of importance retailers and brands place on specific areas of their supply chain.
An overwhelming 90 percent of respondents said location of suppliers and raw materials is essential information, while 80 percent said knowing about working conditions and rights is necessary. More than one third of retailers and brands want information regarding resources like water and energy, and 70 percent named compliance with third party standards as vital information for making effective judgments about value chains.
Nearly half of retailers and brand owners said they do not have enough useful data from multiple steps within their supply chain. One of the main barriers to collecting value chain data, the survey showed, is the lack of understanding of the business benefits. More than half of respondents believe data needs to be detailed and include information from all participants in the value chain in order to successfully map from raw material to final product. However, a third requires data only from immediate suppliers.
Other factors impeding data collection is the importance of data security and commercial sensitivity around data sharing.
Historic Futures said that the level of data required depends on the organization needs and what is at stake. For most organizations, the research found that being able to know where raw materials come from would be a good place to start.
Over the last decade Historic Futures has worked with large international brands and retailers including Walmart Stores and Marks & Spencer to assist them in gathering knowledge about their value chain structures and operations. “Our experience supports the findings of this research in that the biggest challenges are both the need for increased awareness about the business cases and effective technology and tools to enable data collection,” Wilson said.