Transparency in the supply chain helps everyone see more clearly

Transparency in the supply chain helps everyone see more clearly

An open dialogue between a brand owner and its contract manufacturer allows for better market forecasting, consumer trust and better-quality products.

People are concerned with fostering healthier lifestyles. According to the Council for Responsible Nutrition (CRN) 2017 Survey on Dietary Supplements, 76 percent of U.S. adults now take dietary supplements. This data point is not lost on those who are responsible for manufacturing the supplements, which are often contract manufacturers. Every time people take a supplement, they demonstrate their trust in the brand and the manufacturer behind that item to provide a safe product. In the same vein, the relationship between the brand and the contract manufacturer is one of trust as well. One of the best ways to engender trust is to be open and honest with each other, which starts by being transparent.

Visibility and transparency regarding materials, herbs and ingredients are high priorities because the benefits of building trust by sharing information with partners and consumers outweigh the benefits of secrecy. By increasing transparency in the supply chain, companies can connect with consumers to build trust in everyone involved while also gaining the power to react more efficiently and effectively, should any issues or problems arise.

One of the common challenges regarding transparency in the supply chain pertains to global communication. The importance of understanding how different audiences ask or respond to questions and concerns cannot be understated. Such differences may cause inefficiencies. As such, when working in a global supply chain, the best operators know what is perceived to be the best approach for the audience with which they are trying to engage.

By communicating effectively, individuals can coordinate and overcome issues that have global implications, particularly as it relates to issues around availability of the ingredients in a vitamin or supplement. Lack of availability can disrupt planning and cause delays. For instance, the Ministry of Ecology and Environment (China’s version of the EPA), has been pushing for cleaner manufacturing processes. As a consequence, it has shut down some facilities, either temporarily for refitting or permanently. This can cause a restriction in supply and make it more difficult on a global level to procure supply of a particular ingredient. In a case like this, if the contract manufacturer is not stocked well in advance, the brands they serve and, subsequently, the end-users, will be left hanging. Therefore, open communication as far in advance as possible from the Chinese supplier to the contract manufacturer helps everyone stay ahead with forecasting so production doesn’t slow.

Transparency in Forecasting

Better visibility and more timely data sharing allow companies to collaborate effectively. Visibility also helps contract manufacturers manage orders, shipments and inventory and to plan and direct transportation.

In order to plan and collaborate, it is important for suppliers, manufacturers and brands to be transparent about their forecasting.

Suppliers should be transparent about issues that will impact the producers or farmers. This includes sharing information regarding timelines impacted by holidays, plant shutdowns for maintenance, weather patterns and other similar incidents. This way, the relevant people are informed and can forecast solutions and possible compromises accordingly. For example, if a storm delays a material shipment on a boat for six weeks to get the material delivered, that will greatly delay lead times for the customer. On the other hand, if the contract manufacturer knows and communicates to the brand that an ingredient is delayed, it helps everyone to forecast more effectively.

Brands should also be transparent about how much demand there is for their product. If they can provide correct data and reports to the contract manufacturers, accurate orders can be made to the suppliers and farmers can plan accordingly. It is critical to be well-informed about the marketplace and how social, economic and environmental factors can impact production.

Transparency in Testing

With the implementation of the 21 CFR part 111 GMPs (good manufacturing practices), contract manufacturers are required to confirm the identity, purity, strength and composition of dietary supplements. As a contract manufacturer, trust is nurtured through transparency of these results with their customer and, ultimately, the end-user.

A relevant example is when Amazon began selling its Amazon Elements brand of dietary supplements with complete disclosure and transparency. They provide easy-to-understand visual results of identity, purity, strength and composition. They also provide information about every ingredient in the product. This would not be possible without the transparency provided by a contract manufacturer’s supply chain. This transparency builds the necessary trust from the consumer all the way back to the manufacturer and the supplier/producer of the ingredient. This transparency harbors trust throughout the industry.

Transparency = Quality

As an industry, the natural products space is raising its standards. Regulatory and consumer pressures are driving some fundamental and welcomed change, but most of it is happening because responsible companies feel the need to focus on quality. This space is competing with “big pharma” and the quality has to match. Consumers need to know what comprises the products (ingredients) as well as the data that supports the claims.

Transparency is a quality issue. It is urgently important to share all information that impacts the formulation and manufacturing of a product from the farmer to the shelf. The best way to do this is through documentation and the open sharing of documents between the manufacturer and the brand. Brands have the right to know that what they agreed to have in their product is actually contained in their product. This includes certificates of analysis (CoA), certificates of origin, GMO (genetically modified organism) statements, allergen statements and so on. This documentation allows both the contract manufacturer and the brand to be open and honest. Furthermore, contract manufacturers should have an open-door policy when it comes to their customers touring and auditing their facilities. This is how trust is built between manufacturers and brands, and that trust can be passed on to consumers.

Consumers are demanding to know exactly what is in their supplements. If the brand is able to accurately convey this information, trust will grow. A fundamental way for this industry to grow and improve is by being more transparent and honest with suppliers and consumers about information pertaining to ingredients.

Thaddeus Roy is the director of supply chain at Biovation Labs, a contract manufacturing, formulation, private label and supplier company within the natural products industry. The company works within the life science space, manufacturing products for supplement and nutraceutical companies worldwide. In January 2018, the company moved into a 104,000-sq.-ft. corporate headquarters in Salt Lake City, which houses a high-capacity manufacturing facility, serving the needs of both large and early-stage companies. Biovation Labs headquarters is a NSF Registered GMP facility.

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