Perspectives

Swiss companies: Too little insight into their supply chain

Deloitte CPO Survey

Two-thirds of procurement officers in large international companies have limited or no visibility beyond their own direct suppliers. The results for Swiss companies are even lower: according to a current Deloitte survey, more than four-fifths of companies do not have a deeper insight into their supply chain.

These results are surprisingly low and also quite alarming, given that it is increasingly important for companies to know where raw materials and intermediate products come from. While six percent of companies throughout the world maintain that they have achieved full transparency across their entire supply chain, this is not the case for any of the Swiss companies who responded to the survey. These are the findings of the latest Chief Procurement Survey conducted by consulting firm Deloitte.

Transparency across the supply-chain

This low transparency has implications for companies in all industries. After all, identifying and containing risks within the supply chain is becoming increasingly important as companies' value-added chains become ever more complex and extend over multiple markets and jurisdictions.

Consumers want information

Companies need to provide regulatory authorities with greater insight into their procurement function than it was previously the case. Consumers also want more details about where products are coming from and how they are manufactured. Corresponding new regulations in the EU, the UK or in France also affect many Swiss companies that are active in these countries.

The current debate about the Responsible Business Initiative in Switzerland also illustrates the trend for more transparency. Swiss companies therefore need to intensify their efforts and collect more and more systematic information on their second- or third-level suppliers. This will enable them to assess risk more effectively and to create opportunities to minimise such risk. At the same time, they can respond to the growing regulatory requirements and use the information that they acquire for marketing purposes. Digital technologies, such as blockchain, and the use of algorithms and automated systems can greatly support procurement managers in their work.

Successful companies are in the know

The EU now requires certain listed companies to make their services transparent in terms of economic, social and environmental impact. They must also show where problems exist and how they are striving to make improvements. This non-financial reporting information also concerns information about the supply chain and should help to identify, prevent or contain existing and potential negative effects.

The Deloitte survey of procurement managers also reveals that successful companies are two-and-a-half times more likely to have complete supply chain transparency compared to their competitors. The results show that, in addition to the reporting and risk aspects, greater supply chain transparency increases innovation capacity and reduces overall costs for procured goods and services. The switch to digital procurement is therefore even more worthwhile.

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