Action 2: Make visibility into sustainability a priority
Transparency is foundational to trust and, by close extension, performance. Perhaps for this reason, we see the leaders putting an additional emphasis on supply chain visibility—particularly in regard to scope or greenhouse gas emissions.20 Scope 3 emissions are indirect emissions produced by customers who use the company’s product or suppliers who contribute to making the product the company sells.21 In comparison with the rest of the field, the leaders are 3.3 times more likely to strongly agree they have visibility into scope 3 emissions (30% versus 9%) (figure 5).
In general, organizations have a relatively difficult time gaining visibility into the emissions of their suppliers, particularly with respect to scope 3 emissions. More than 80% of climate disclosure preparers find scope 3 emissions to either be very difficult or somewhat difficult to disclose.22 However, there are some exciting examples of companies deploying analytics to gain a fuller picture of the carbon footprints created by their supply chains. Take Doconomy, a digital transformation company that focuses on more sustainable solutions. Doconomy’s 2030 Calculator implements AI to help manufacturers and brands calculate the carbon footprint of their products by incorporating “unique emissions factors for each of the product parts, material, packaging, and transportation.”23
Some companies are also experimenting with DNA and AI to analyze supplier materials, such as the cotton used for clothing, to help gain a clearer picture of where in the world the materials originated.24 Use cases like this exemplify how technological investments like those mentioned earlier can also be redeployed to create greater visibility and transparency into more opaque supply chains.
Action 3: Demonstrate humanity to create a competitive differentiator
While reliability and transparency are critical trust factors, humanity is an important factor that can create a competitive advantage in terms of both talent acquisition and customer value.
Deloitte Consulting’s stakeholder research indicates that supply chain employees and their customers, particularly younger generations, care deeply about the intentions and humanity of the organizations operating the supply chains they interact with. This is something that executives may overlook when building a trusted supply chain.25
Interestingly, the faster-growing supply leaders in our research focus more on the human side of the supply chain. When we compare these supply chain leaders (defined as those achieving 15% annual growth or more) with their low- to medium-growth peers, we see they are more likely to make talent development and growth a priority (48% versus 32%) and continually ensure their supply chains are updated and defined by customer values (44% versus 34%), as shown in figure 5.26
Carrefour, a French supermarket chain, rearranged its supply chain to represent the values of Carrefour’s workforce, customers, and communities through its “Act for Food” campaign. To gain a better line of sight into employee ideas, Carrefour created an “Act for Change” platform so workers could share ideas on how it could better serve its communities.27 This prompted Carrefour to rearrange its supply chains to support local farmers and grow food through more sustainable practices. And to both provide transparency and elevate humanity, Carrefour has deployed blockchain technology to clearly show consumers from where their produce originated (such as producer name and transportation means), the quality (such as harvest date), and the organic certification.28
Whether they are improving competence or reexamining and reprioritizing intentions, many of the leading suppliers are taking actions to help cultivate trust and increase performance.
Where to go from here: What leaders can do differently
Many supply chain executives understand the importance of trust but have yet to take proactive measures to manage trust. However, some leading supply chain organizations are taking actions that enhance trust: leveraging digital technology to enable reliability and transparency; focusing on increased visibility, especially with respect to ESG; and elevating humanity as a source of differentiation.
Each of these often require long-term vision and commitment, as well as sufficient funding and anticipation of financial consequences. For example, implementing a fully deployed digital thread can take years rather than months. Further, when evaluating changes to supply chains, there are likely tax implications and opportunities that require attention, including potential impact to existing transfer pricing policies and available incentives that could help fund the investments. Major changes and investments in the supply chain are often akin to moving a large ship: They don’t turn quickly. Given this, it can be critically important to start making supply chain investments today and accelerate the pace of those already made.
In the short term, to nurture the momentum and support needed to help cultivate meaningful trust in the supply chain function, executives can take the following two steps:
- Widen the stakeholder relationship lens. Trust in your supply chain is an asset that you should manage as you would likely manage other critical organizational assets. And while shareholder value and cost optimization should almost always be supply chain priorities, too myopic of a view on these dimensions may inadvertently erode trust—and eventually, the bottom line. Rather, it’s important to nurture trust across the wide array of stakeholders the supply chain ecosystem encompasses. Whether it be customers, employees, vendors, communities, investors, regulators, or others, each can play an important role in building a trusted supply chain.
- Measure trust, intentionally. With so many stakeholders in balance, it’s important to have a pulse on progress and the trade-offs made to help ensure trust is upheld. This means intentionally measuring trust levels over time and ensuring that metrics probe deeply into areas such as digital privacy and protection, supply chain employee experience, conduct and compliance, and visibility across supplier tiers. A clear view of progress can help supply chain leaders determine where additional resources are required and perhaps most importantly, whether trust is truly at the center of the ecosystem.
An intentional focus on trust can help supply chain leaders better understand stakeholders’ needs and prepare their organizations to develop and implement the initiatives that will generate the greatest impact and value over time.