I want to start with a question

As a customer will you buy products tainted with the blood and sweat of poor,
unpaid and abused migrant workers?

Nestlé admits slavery in Thailand

while fighting child labour lawsuit
in Ivory Coast
Many of the problems reported by workers are systemic in nature and tied to the general
vulnerabilities of migrant workers in Thailand; to recruitment, hiring and employment
practices widely observed in the seafood sector.

Fancy Feast catfood brand

(NESTRADE Ltd., 2015)
(Verité, 2016)

Introduction
As the supply chain grew to a complex global network of organizations, the level of
uncertainty increased and often the span of control decreased. As a consequence companies,
as well as consumers, have become less aware where the primary resources of their products
and supplies came from, and under which conditions it was produced. In this sense,
globalization has created governance gaps where companies are able to ‘abuse’ human rights
without being sanctioned by independent third parties and consumers. These gaps result in a
non-allocation of responsibilities that makes the problem of social conflicts within dispersed
supply chains very likely to endure. Particularly without collaborative approaches to remedy
these deficiencies. At the same time this article highlights a very important question “Where
does this stuff come from?” 1
the desire for transparency has never been larger than today. Consumers have an increasing
awareness of sustainability impacts such as child labour and environmental impacts. There is
no doubt that these incidents created huge reputation damage for the companies involved.

supply chain transparency is presented as a promising way for firms to improve their
legitimacy (e.g., Bhaduri and Ha-Brookshire, 2011; Carter and Rogers, 2008).

(The Jungle, 1906)

Reveling Technologies:
(The Jungle, 1906)
Sinclair in this book uncovers the horrific “packingtown” reality in Chicago, where he
explained in detail about unethical packing of Meat. It made a huge impact and developed a
need to regulate process. And I am talking about trending vibe more than hundred years ago,
many people and organizations around the world today have the power to expose illegal,
unsafe, or irresponsible practices—or simply inefficient processes—through a host of
publicity mechanisms. The “sound” of their commentary could easily become more than a
vague disturbance to a multinational brand—it could create lasting, serious trouble. So
beyond any required regulatory compliance, businesses today have a vested interest in
evaluating how transparent their supply chains are and having a clear understanding of the
risks associated with their supply chains.

MacLean and Rebernak (2007, p. 4) put it, “there is no better way to build trust among
stakeholders than through transparency.”

Revealing origins will become an essential part of establishing

trust and securing reputation.

“Where does this stuff come from?”

Toxic drywall scandal
(SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, 2012)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

(2012). CONTAMINATED DRYWALL: EXAMINING THE CURRENT HEALTH, HOUSING AND
PRODUCT SAFETY ISSUES FACING HOMEOWNERS. Washington, DC.: U.S. GOVERNMENT
PRINTING OFFICE, pp.19-28.

By itself, transparency is an increasingly important capability for companies.

Generating superior customer value is one of the primary goals of marketing, and is

increasingly seen as the means of attaining competitive edge (AMA, 2007; Drucker 1956;

Khalifa, 2004, Pitelis, 2009). Firms aim to satisfy customer needs better than their competitors

(Day, 1994), and this is supposedly reflected in higher value for the customers. Customer value

in turn is proposed to lead to attitudinal loyalty and repurchase behaviour, and to result in

paybacks for firms (Sirdeshmukh, Singh and Sabol, 2002).

Sing et al. (2008) find that consumers are interested in obtaining information about
production origin and sustainability conditions, and that companies can benefit from
increased transparency

Studies have found that supply chain transparency positively influences consumers’
purchasing intentions (Bhaduri and Ha-Brookshire, 2011) and willingness to buy products in
experimental settings (Bradu et al., 2014)
Transparent supply chain has created a space for more powerful branding opportunities

With increased transparency having been a key demand of anti-sweatshop activists for more
than a decade (Doorey, 2011) and its being
increasingly difficult and risky for companies to hide unsustainable practices in opaque
supply chains (Carter and Rogers, 2008), supply chain transparency is frequently presented as
a way a firm can improve its legitimacy and credibility (e.g., Bhaduri and Ha-Brookshire,
2011; Carter and Rogers, 2008; Cramer, 2008; Dubbink et al., 2008).
Such improved legitimacy/credibility/trust becomes highly attractive to firms if it can affect
consumer willingness to buy products.
TrackMyT multimedia information flow from raw material to finished product
Forces companies to rethink the function of labels
Visual readers are used to read and compare the information with alternates and subsitutes

Strengthening the Chain

Several frameworks address value creation at firm level, and explain how firms achieve a

sustainable competitive advantage by creating value to customers. Among these are Porter’s

competitive analysis framework (Porter, 1985), resource-based view (e.g. Barney, 1991;

Wernerfelt, 1984), resource-advantage theory (Hunt and Morgan, 1995; 1996), business

process view (e.g. Srivastava, Shervani and Fahey, 1999) and the less frequently discussed

value shop and value network (Stabell and Fjeldstad, 1998).

The possibility of embedding, through outsourcing, questionable practices in opaque supply

chains has been challenged by anti-sweatshop campaigns (Bartley, 2007). These campaigns
have attempted both to hold lead firms (such as Nike, Adidas, and H&M) responsible for
working conditions at their suppliers (Bartley, 2007) and to force lead firms to increase the
transparency of their supply chains (Doorey, 2011). Stakeholders emphasize increased
transparency in global supply chains because such transparency allows independent
organizations to monitor working conditions at production sites (Laudal, 2010). This is
perceived as important, since stakeholders distrust corporate-disclosed information about
working conditions at suppliers (Toppinen and Korhonen-Kurki, 2013). Companies have
responded to these anti-sweatshop campaigns both by proclaiming themselves responsible for
working conditions at their suppliers and by adopting various private regulatory systems
(such as codes of conduct, sustainability certifications, and factory audits). While these
private systems have spawned a multibillion dollar industry (EgelsZandén and Merk, 2014),
their merits have been strongly debated. While some have found marginal improvements in
some sustainability issues at production sites (e.g., Barrientos and Smith, 2007), others have
questioned the ability of such systems, especially codes of conduct, to achieve even such
marginal improvements (Locke et al., 2009).

Risk management

Compared with increased responsibility, companies have been more reluctant to respond to
demands for increased “supply chain transparency.” 2 Although some scholars note a trend
toward increased transparency in relation to sustainability more generally, until recently,
companies have resisted calls for increased supply chain transparency, claiming that it could
erode competitive advantages and that information about factories is of great proprietary,
economic, and competitive value (Doorey, 2011). This might be changing, however, with
companies (such as H&M in 2013) starting to publish the names of all their first-tier
suppliers.

MacLean and Rebernak (2007, p. 4) put it, “there is no better way to build trust among
stakeholders than through transparency.”

1. “A Guide to traceability - A Practical Approach to Advance Sustainability in Global

Supply Chains” UN Global Compact, 2014

The Jungle. (1906). North Minneapolis: Lerner Publishing Group, Inc., pp.35-55.

Bhaduri. G., & Ha-Brookshire, J. E. (2011). Do transparent business practices pay?

Exploration of transparency and consumer purchase intention. Clothing & Textiles Research
Journal, 29(2), 135-149.

Carter, C. R., & Rogers, D. S. (2008). A framework of sustainable supply chain management:
Moving toward new theory. International Journal of Physical Distribution & Logistics
Management, 38(5), 360-387.

Bartley, T. (2007). Institutional emergence in an era of globalization: The rise of

transnational private regulation of labor and environmental conditions. American Journal of
Sociology, 113(2), 297-351

Doorey, D. J. (2011). The transparent supply chain: From resistance to implementation at

Nike and Levi-Strauss. Journal of Business Ethics, 103(4), 587-603.

Laudal, T. (2010). An attempt to determine the CSR potential of the international clothing
business. Journal of Business Ethics, 96, 63-77.

Toppinen, A., & Korhonen-Kurki, K. (2013). Global reporting initiative and social impact in
managing corporate responsibility: A case study of three multinationals in the forest industry.
Business Ethics: A European Review, 22(2), 202-217.

Egels-Zandén, N., & Merk, J. (2014). Private regulation and trade union rights: Why codes of
conduct have limited impact on trade union rights. Journal of Business Ethics 123, 461– 473.

Barrientos, S., & Smith, S. (2007). Do workers benefit from ethical trade? Assessing codes of
labour practice in global production systems. Third World Quarterly, 28(4), 713-729
AMA (2007) American Marketing Association’s definition on marketing, available at

http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.a

spx

Day, G. S. (1994) ‘The Capabilities of Market-Driven Organizations’ Journal of Marketing 58

(4): 37-52.

Sirdeshmukh, D., Singh, J., and Sabol, B. (2002) ‘Consumer Trust, Value, and Loyalty in
Relational Exchanges’ Journal of Marketing 66 (1): 15-37.

Singh, J., García de los Salmones Sánchez, M. M., & del Bosque, I. R. (2008). Understanding
corporate social responsibility and product perceptions in consumer markets: A crosscultural
evaluation. Journal of Business Ethics, 80, 597–611.

NESTRADE Ltd. (2015). Responsible Sourcing of Seafood at Nestlé. [online] Nestle.com. Available
at: https://www.nestle.com/asset-library/documents/creating-shared-value/responsible-
sourcing/seafood-responsible-sourcing-update-2017.pdf [Accessed 17 Dec. 2018].

Verité (2016). Nestlé’s Thai Shrimp Supply Chain. [online] Verite.org. Available at:
https://www.verite.org/wp-content/uploads/2016/11/NestleReport-ThaiShrimp_prepared-by-Verite.pdf
[Accessed 17 Dec. 2018].