Executive Summary:The apparel industry has fierce competition especially within the retail environment. To face the industry challenges, companies have been prompted to focus on their core competences, and therefore they have externalized an increasing amount of their activities (Exhibit 1). This activity has resulted in longer, more complex, supply chains. In a world where the scarcity of resources is becoming an increasingly serious problem for all sectors of the economy, understanding the flow of goods within supply chain systems will allow businesses to reduce resourcing risks. This makes companies more resilient than rivals who do not have such visibility in their supply chains. Fostering transparency is essential, not just for greater insight it provides into an organizations own supply chain but also prepares companies for a business environment in which customers are increasingly privy to more information about the associated impacts of products, processes and corporations. Customers, in addition, focus on the quality of product, are also concerned with the origin and the processes involved in manufacturing and procuring. Addressing customers growing concerns of quality as well as ensuring acceptable ethical standards, companies are emphasizing on more transparent supply chains.Cooperation coupled with information transparency, synergistically influences the enterprise performance of a given firm. Technology plays a critical role in fostering collaboration between suppliers and manufacturers. Increasingly, many companies are working together with suppliers to ensure suppliers adhere to all regulations and standards. Transparency also has a wide range of additional benefits that companies welcome such as increased collaboration, reduced supplier risk, and heightened control.However, companies find it challenging to achieve the transparency they strive for. These can be attributed to various reasons such as: lack of technological capabilities, increased pressure to reduce costs, meeting corporate goals, conservative corporate strategy, and substantial investments in the forms of money and time. General Information:With increasing ability to communicate around the world in a matter of seconds, corporate transparency is becoming an important issue. This is extremely prominent in the apparel industry, where a companys transparency can have real effect on their bottom line. Manufacturing companies (especially related to apparel) have come under fire for questionable corporate responsibility in regards to safety, health and the environment. These negative implications have resulted in diminished profits not only for the manufacturer, but also for the retailer that they supply. In the 21st century corporations are responsible for their own actions in regards to safety health and the environment, but also the actions of the members of their supply chains. Increased transparency through the supply chain helps consumers make informed decisions about what type of company they choose from. Companies are now focusing on people and planet in addition to profits (3Ps). Those companies that do not have a multilateral focus, have been feeling a greater backlash from bad PR, resulting from most notably, improper treatment of employees in their supply chain. One of the more notable examples of this has been with Nike who changed their strategy from managing risk to the 3Ps of corporate responsibility, and has seen a positive effect to their bottom line. Similarly, companies who have integrated a transparent and sustainable supply chain from their inception have seen major success as industry leaders from a PR standpoint, but also to their bottom lines. One clothing company that has successfully fostered transparency in their supply chain is Patagonia. Patagonia has emphasized sustainability from its inception and taken their CSR to an industry leading level (Exhibit 2).Challenges:There are plenty of issues that can occur if a company encounters problems with its supply chain visibility; one of them is bad publicity that can negatively affect the company and consumers perception. One stark example is Apple who received lots of bad press when eighteen workers committed suicide and three workers died from ignition of dust from polishing the ipad at Foxconn, one of Apples major Chinese suppliers. Such events exposed Apple to the publics eye as a foreign company that exploited and abused Chinese workers with low pay and harmful work environments. Another example is of, Wal-Mart which had encountered lots of bad press for its unethical procedures with labor exploitation. Continued reputational problems can lead to erosion of market share as consumers are becoming more aware of unethical practices in which firms engage in with increased publicity related to the subject. Due to this, companies can also have trouble hiring talented people to work for them or employees leaving, as employees do not want to work for firms with a bad reputation for workers exploitation, child labor or environmental detrimental actions. These activities will decrease the firms performances and hurt shareholders confidence in the companys ability to perform. Moreover, lacking visibility also means more risks. A company who is not aware of what their suppliers are doing, or what happens in certain geographic location of a suppliers, will have little control and can be exposed to risks such as unexpected longer lead times, quality control issues, which can adversely affect revenues.Due to issues that lack of transparency can cause a company, there have been increasing attempts by companies to investigate further into the upstream supply chain to ensure ethical and sustainable business procedures. However, there are certain challenges that companys encounter, which can limit the company from reaching a more transparent supply chain. According to KPMGs Global Manufacturing Outlook, about 40% of manufacturers surveyed said they lack information and material visibility across their supply chain, and there are many factors that contribute to why there is such difficulty in achieving more transparency in supply chain.First, globalization leads to much broader points of contacts and makes for a much more complex supply chain network. The firm can be exposed to risks from global suppliers since typically there are significant differences in cultures, standards, laws and regulations. Communication is another issue that causes difficulty to foster transparency due to geographiclocation. Second, lots of the times transparency is difficult to achieve because suppliers or firms are reluctant to invest the time to work with each other or share necessary information. This poses a real challenge for firms to obtain critical details on their suppliers performance and business practices. Moreover, lots of firms usually do not take the process of selecting the suppliers seriously, in which suppliers might have a lot of hidden risks as well as strategies and goals that do not align with the firms, making it difficult for to directly identify and prepare for risks. This in turn makes it increasingly difficult to anticipate, manage and control risks. Third, even when suppliers and companies are willing to work together to get data, there is a lack of adequate supply chain IT system and mature technology to facilitate such actions. Lots of the times, suppliers do not have the IT system or ERP systems compatible to that of the firms, which makes it very difficult for firms to access up-to-date information allowing more speedy decision making or real time tracking information to improve customer service and delivery times. There are an increasing usage of services such as cloud computing that help mitigate the problems, but such services are expensive and have yet to be adopted by many, posing many challenges for firms who are incapable of altering their systems to be in line with their business model. Lastly, another challenge stems from firms ability to decide how much transparency or information they are willing to share with outsiders. In some cases, sharing information of the origins of goods can be a critical marketing tool to establish credentials and build trust with customers. However too much exposure can pose threat to the firms sharing such information. Since the information is becoming easily accessible, ones business strategy could be easily copied by competitors. Suppliers can also use transparency to identify firms customers base which could result in diminished bargaining power, or could even cause a termination of contract. The trade-off between how much transparency is shared to outsiders is a real challenge to the firm as it there are many risks as well as benefits related to exposing ones supply chain to the public.Opportunities:Supply chain transparency is vital in this day in age as corporate supply chain practices are attracting increasing legal, regulatory and consumer scrutiny. With the advent of modern technology, the access to information has never before been so easily accessible. This unfettered information allows people to expose corporations of unlawful, controversial, and harmful business practices. While companies see the need for transparency as a burden, firms can also utilize their technology to seek out opportunities for operational improvement, promote positive corporate practices, reinforce strength of their brands, foster flexibility and minimize impact of negative press.Perhaps the most important element of transparency in supply chains is technology. While technology does give end users more power in delving into corporate practices, firms can also utilize technology as a tool for change. Most recently RFID tags have given firms the opportunity to track, and monitor the status of goods or service. This creates more efficiency in operations, as firms can know the exact status of inbound or outbound products. Similarly, RFID tags and tracking can be used as a tool to improve customer service. By sending updates to customers firms can bolster their relationships as well as improve upon operational efficiencies through monitoring product flows in a more detailed matter. Utilizing such tracking systems can also improve efficiencies as having the ability to track and monitor product flows allows for supply chain managers to identify areas of vulnerability within the supply chain. By having more visibility into the supply chain through before mentioned means of tracking and monitoring, firms will have more control over their product flows. Utilizing means of collaboration with upstream suppliers, firms have a better grasp on the quality of goods being produced, as well as the working environment in which they are being manufactured. Through collaborating with suppliers, companies, especially in the apparel industry where malpractice is prevalent, firms are able to ensure that proper ethical working conditions are in place. Not only will firms be covered from any bad press, but they will be more aware of their suppliers environment, and be better prepared for any potential or unforeseen risks and issues that could arise. While fostering transparency can be cumbersome for firms, four steps can be taken to initiate change within the supply chain. First, firms need to identify and prioritize risk associated with products. This can be achieved by associating risk metrics based on procurement of product volumes, geographic location of the products, and environmental compliance of the supplier (Exhibit 3). Through scoring and ranking these risks, companies can identify points of weakness, as well as proactively address any foreseen risks with high priority items. A next step firms can take is by visualizing the risk. Some companies use 3D mapping technology to identify product flows based on volume (Exhibit 4). By mapping out these product flows firms can identify potential risks that may have not been apparent otherwise, such as finding easier more efficient shipping routes. As transparency becomes more established in the supply chain, firms can zero on communication or information gaps. This can be crucial in finding areas in which companies may lack control or are not receiving adequate data in order to plan, forecast and meet specific customer needs. While establishing these steps is crucial, firms must also find a means to manage each of these processes. As more transparency provides additional streams of information, firms must learn from and manage the data in order to achieve long-term sustainability. Ways in which companies can do this is by integrating an enterprise-wide system that evaluates macroeconomic risk indicators of suppliers, utilizes visualization tools, and demonstrates predictive analytic capabilities. Insights from transparency most effectively contribute to the supply chain is properly managed, monitored and used to its full potential (Exhibit 5). Finally, as all companies are striving for continuous improvement and cost efficiency, transparency provides the proper circumstances for any management team to fully examine their supply chain from start to finish to see if there are any leaks in value, identify any bottlenecks or if there are any potential disaster areas that could have a long recovery time should there be any unforeseen event. The tracking process shows exactly how and where value is added to the product enabling the firm to analyze the makings of a given product. Transparency opens the process to the public. If the firm does not find the inefficiency, the public will and then there will be twice the issue.Future:Known to many as one of the most premier outdoor clothing manufacturers, Patagonia leverages their transparent supply chain to promote their brand, and spread awareness surrounding the issues related to the apparel industry. Their main core competency is committed to achieve the triple bottom line. This pursuit is built into their strategy as not only are they achieving the triple bottom line but they are also leveraging their transparent supply chain as a means to market their eco friendly products in which they provide. Through this channel Patagonia has become an industry leader and has encouraged other large firms, such as Wal-Mart to provide customers with am ore visible supply chain. Through media outlets such as YouTube, Patagonia fosters transparency and encourages customers to explore their supply chain with the intention of erasing any doubt in their manufacturing processes.On the companies website is a section called the Footprint Chronicles which is a interactive map depicting where every piece of their supplies come from and the exact details in which each supplier operates (Exhibit 6). This transparency not only provides information and education to their end user but also bolsters their mission statement of: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. While many companies have followed suit and dedicated a page of their site to allow customers to research their supply chains, Patagonia gives users all the tools necessary, even contact information for suppliers to provide all the information needed to ensure their supply chain is as transparent as it possibly can.Considering Patagonias rich history as being environmentally sound, their future shows no sign of straying from the course. Having put considerable effort into fortifying transparency in their supply chains, Patagonia seeks to push advocacy for more transparent, sustainable supply chains. In 2009 Patagonia partnered with Wal-Mart to help monitor their supply chain, and make it more transparent. Recently they partnered with Wal-Mart and Adidas to form the Sustainable Apparel Coalition (SAC). The SAC will seek to create an index to measure sustainability and transparency criteria in business supply chains such as energy and working conditions. This coalition recently created the Higg Index, which is a means to monitor and track such sustainability, and transparency that businesses can use to assess their performance. Long has Patagonia been an example of transparency and sustainability within their chain, however they are aware that making a lasting, significant change to the environment hinges on their ability to assist other business to follow suit. Using techniques such as Patagonia, apparel firms can utilize transparency to not only protect themselves from any PR issues, but also to make their supply chain more efficient. Through systems such as Patagonia, firms will be more informed, aware and conscious of materials and goods being shipped downstream to the end user. By having a firmer grasp on the product flows, firms can also identify areas of weakness and build upon improving them, which has long-term effects on the firms operational efficiencies as well as customer service. Through these avenues of transparency apparel firms will be able mitigate risk upstream as well as retain the triple bottom line.

Exhibit 1 Apparel Industries outsourcing map

Exhibit 2 Patagonia Footprint Chronicles

Exhibit 3 Risk evaluation

Exhibit 4 3D mapping technology

Exhibit 5 Supply chain traceability

Exhibit 6 Patagonia Footprint Chronicles