Study finds most companies know very little about their supply chain

June 10 2013

For any company that needs to ship products as a part of successfully doing business, even if it is just across a city like Cleveland, it would seem important to know the ins and outs of your supply chain. After all, if you do not know who is shipping what or where certain products come from, major challenges can result.

A recent article from Quartz profiled several different retailers and found that many of them know nothing about their supply chain. This was prompted by a recent factory fire in Bangladesh that claimed the lives of 112 workers. It was a facility making Wal-Mart apparel that the company knew nothing about, because the work had been outsourced by one additional factor beyond what the company was aware of.

"If a supplier or an agent chooses to subcontract without informing us, then that is a problem," said Rajan Kamalanathan, Wal-Mart's vice president for ethical sourcing, according to Reuters. "We can put all kinds of controls in place, but if they don't tell us where they're putting our order, then that is a problem."

The article also highlighted a survey of American companies and ranked them on a grading scale of A through F on how well they knew their supply chains. Of the 50 companies surveyed, 19 received grades of D or F and 10 were graded with a C. Only eight earned a grade of A.

It doesn't matter how big a business is, knowing every aspect of the supply chain is critical. Even if all a company needs to do is ship packages around Ohio.