If you have any experience dealing with supply chains, you know that it is a complicated web full of unknowns. We’ve compiled a list of recommendations to help you prepare for those unknowns, and mitigate your exposure to risk.
Internal Transparency & Communication
There are a surprising number of companies where different teams utilize separate product management systems. The different teams will be managing the same products, but will use different systems to do it. Not only is this an inefficient use of funds, but it also leaves the company vulnerable to miscommunication or unnecessary data gaps. For example, the procurement team has strong relationships and sway with suppliers. The compliance team needs product data to determine compliance and the sustainability team needs it to create circularity labels. The suppliers might not answer requests from the compliance team because they’re relationships are with the procurement people. If each of those three teams have different systems, their internal isolation is preventing their inherently aligned goals from being realized. Internal transparency and data sharing permits data to flow freely across teams; ultimately, propelling a company towards its universal goals. I do understand that there might be other technical difficulties that would make fully combined accounts ineffective. In this scenario, some companies use Toxnot Product Passports to share information internally between their engineers and marketing / sales team.
Stay Up-to-Date with Compliance Requirements
Compliance touches every industry and has become the foundation of operational viability. The sheer number of regulations, laws, standards and guidelines has increased dramatically in the recent past and doesn’t show any signs of slowing down. Banned chemicals lists change on a regular yet unpredictable basis. Knowing what regulations apply to you; or to your consumers, is paramount. Not only are the stakes for failing to comply financially and reputationally high, but the products you buy and sell may contain unknown risks. Do you have the insight and visibility to proactively know how to meet those regulations? Gathering full material disclosure (FMD) will help you get there. Being in the know with what regulations are applicable to your business as well as what future regulations might be coming your way is a non-negotiable piece to managing your supply chain risks.
Don't Be Afraid to Ask Hard Questions
Being an overachiever can help you mitigate risk! (shout out to overachievers) There are always more questions to ask or standards to comply with. Sometimes, a “don’t ask, don’t tell'' approach might be tempting. But by leaving stones unturned, there might be landmines hiding below that would be better to find before you or someone else steps on it. Have you asked your suppliers about ethical standards at their factories? Or whether their waste management system is up to date? Have you seen a report to back up their sustainability claims? These are questions to be asking now rather than later. What would happen if one of those factories got shut down? Better to know now and pivot then run into a total roadblock later. By preparing for the worst case scenario and asking the right questions, you can cover your bases.
Gather and Share End-to-End Material Transparency
A foundational piece to reducing your supply chain risks is having end to end material transparency. This means knowing exactly what chemical hazards exist in the materials of your products across your supply chain. Transparency is a concept that is easy to strive for but challenging to implement.
Reaching out to your suppliers for FMD is a great place to start, however, it’s not always a straightforward process. We’ve observed that success is built by intentionally cultivating core relationships with your suppliers. If you improve trust, and communication, you will increase the likelihood that they will share data and answer your key questions.
These supplier relationships are likely to reduce costs over time and improve your brands competitive advantage by proactively having accurate, accessible, and reliable materials data. Why exactly? Accurate materials data allows you to do these key things:
- Easily adjust to evolving market and regulatory trends
- Save time preparing sustainability, circularity, & compliance documentation
- Improve consumer confidence with accurate marketing backed by data
Start Preparing the Rapidly Expanding Circular Economy
Circular Economy news is super (duper) trending and isn't going to stop. The European Union just recently proposed a ban on Greenwashing and updated consumer rights. You can read this blog for more information on that topic. Tackling product transparency right now will help you build trust, loyalty, and legal security for the future.
Start proactively working on reducing your own supply chain risks. Sign up for a free Toxnot account and you'll be one step closer to obtain full material transparency.
