The subject of countless conversations and (presumably) more than a few nightmares, transparency and visibility are everything for today's Procurement professionals. Geodis' most recent Supply Chain Worldwide survey found that "Improv[ing] end-to-end supply chain visibility" ranked third among Procurement's priorities.

This places it above spend optimization, cost reduction, and technological innovation. Though visibility is a high priority for nearly every Procurement team, few have managed to make it anything more than that. The same survey found that only 6% of companies have achieved full visibility across their supply chain. On the other end of the spectrum, a disheartening 77% report highly-restricted visibility or a lack of insight altogether.

While Geodis' survey provides valuable insights into what Procurement considers strategically important, it also adds further confusion to the function's situation. Throughout the report, the terms "visibility" and "transparency" are used interchangeably. 

It's a common move. It's a forgivable one too. After all, the terms are certainly related. To conflate them, however, sets a potentially troubling precedent. Even an organization that boasts visibility across its supply chain can alienate stakeholders and consumers with opaque operations. Treating visible and transparent as synonyms could lead Procurement teams to mistakenly believe they've developed an optimal supply chain.  

So, what's the difference?

At the end of last year, Inbound Logistics posed that very question. Shay Scott, Managing Director of the Global Supply Chain Institute, provided a particularly illuminating answer. "Visibility," he writes, "provides a company with knowledge of activities across its supply chain; transparency is what and how it communicates that knowledge to customers, partners, and stakeholders."

If promoting visibility is about maintaining internal efficiency and efficacy, transparency is about how a company presents itself to the outside world. One depends on a company's ability to access and draw conclusions from its data, the other depends on a company's attitude toward disclosing this data and inviting consumers to draw conclusions of their own. More than ever, it's dangerous for Procurement to confuse the terms or pride one over the other.  

In addition to more strict government mandates, organizations are faced with a highly discerning public.To these socially engaged and politically active consumers, transparency is often a differentiator, and its absence is just as often a deal-breaker. They want to know their dollars are going toward dependable products that have traveled across a responsibly managed and maintained supply chain. When organizations fail to meet their expectations, they won't hesitate to make their voices heard. Businesses in countless industries have already learned this the hard way. The consequences can prove especially dire if consumers learn that poor transparency was not the result of a poor visibility. It's one thing for an organization to unwittingly work with unethical suppliers or engage in unethical practices. For that same organization to knowingly do these things while attempting to keep consumers in the dark is another, more problematic issue altogether.

Procurement can feel tempted to view transparency as a burden or a necessary evil. Looking to avoid boycotts and bad word of mouth, they fail to recognize the considerable benefit of a more transparent organization. In The Path to Supply Chain Transparency, Delotitte's David Linich encourages Procurement to recognize new regulations and consumer standards as an "opportunity to identify potential operational improvements, promote good corporate citizenship, reinforce the strength of their brands, and potentially minimize the impact of future events." Linich advocates for an approach to Supply Chain Management that not only recognizes visibility and transparency as intertwined, but also considers the latter something to strive for rather than something to be hectored into.

In certain cases, organizations have no choice but to maintain a highly-transparent supply chain. California's Transparency in Supply Chains Act, for example, requires large manufacturers and retailers to conduct audits into their operations, verify their suppliers' compliance with anti-slavery laws, and publish the results of these supplier audits. Even without the pressure of a government mandate, however, taking a proactive approach to transparency can do much more than preserve a company's reputation.

Procurement Technology already plays an important role in promoting both visibility and transparency in the supply chain. Assessment tools are reducing costs and expediting supplier audits, blockchain solutions are improving traceability, and social media is encouraging organizations to better educate and inform their customers. As these technologies continue to emerge and evolve,  it's important that organizations work to integrate new tools with their existing IT infrastructures. By conducting a thorough assessment of its current solutions and the visibility and transparency they provide, Procurement can avoid making inefficient investments and target key areas for improvement.

If your organization is involved in planning or carrying out a Procurement Transformation, transparency and visibility should be top of mind. Pursued together, they'll provide for more efficient, risk averse, and cost effective processes while helping build a more positive brand identity. Reach out to the Procurement optimization specialists today to start building a visible, transparent, and world-class supply chain. 

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