The Supply Chain Transparency Challenge: Report Highlights Gap between Procurement Organizations’ Transparency Ambitions and their Capabilities

The majority of organizations consider supply chain transparency to be a top priority, however less than a third are satisfied with the level of visibility into their suppliers.

A new report, “Data-Enabled Supply Chain Transparency” has revealed that 77% of respondents indicated their organization considers supply chain transparency to be critically or highly important. However, the report, produced by Procurement Leaders in partnership with Ivalua, shows that only 31% of procurement professionals said they are satisfied or very satisfied with their organization’s current visibility over its supply chain. This is despite 62% of respondents saying they have sufficient budget to achieve all or most of their objectives and deliver on their supply chain transparency aspirations.

“Recent supply disruptions from black swan events such as the Covid-19 pandemic and current geopolitical events have placed supply chain transparency firmly in the spotlight as organizations need a new level of agility to reconfigure their supply chains,” said Alex Saric, CMO at Ivalua. “Gaining access to valuable supply chain information can prove a vital source of competitive advantage and help procurement teams contribute to achieving a range of business objectives, in particular improving ESG and increasing supply resiliency”, he added.

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Most organizations continue to suffer from severely limited visibility in the lower levels of their supply chains. Whilst more than half (59%) of respondents said they have visibility into 80% or more of their top-tier suppliers, only 7% of respondents said the same of their suppliers’ immediate vendors. Additionally, approximately one-fifth of respondents reported having no visibility over supplier fair labour practices, environmental profiles, or inclusivity, equity and inclusion, respectively.

Data quality issues and data accessibility were identified as moderate or severe challenges to obtaining greater transparency by over 80% of respondents (81% and 82% respectively); technology gaps followed (57%). To overcome these obstacles, procurement teams are planning a number of investments over the coming 12 months, especially into new tools (62%) and data quality initiatives (57%), as well as adopting new data sources and revising role scopes for procurement staff (44%).

“Many organizations still rely on conventional data sources such as contracts, invoices, and audits to support their supply chain transparency initiatives. Such data is broadly available but insufficient to empower procurement teams to make informed decisions regarding their suppliers, nor does it provide them with the agility they need to respond to future supply chain shocks” added Saric. “Only through a combination of the right tools and dedicated talent can organizations build the right foundations and map out their strategic vision to achieve the visibility they need to navigate today’s complex supply chains”.

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