As new supply chains evolve in response to today’s digital marketplaces, like Amazon or AirBnB, the institutionalised trust systems that underpinned traditional supply chains, such as trust in a brand, must evolve to support new requirements. Connected consumers may base trust on a variety of factors, including user reviews, transparency around materials and labour practices, or product authenticity. When we talk about trust, we mean the level of confidence that an entity is who, or what, it claims to be, and that it will behave as we expect. The level of confidence we require varies according to the consequences associated with a wrong decision. How high are the stakes?

This was one of the key themes explored in a recent workshop hosted by Cambridge Consultants, to develop a collective view of how supply chains are likely to change over the next decade, through the adoption of emerging technologies. The workshop participants concluded that digital trust systems underpinned by track and trace technologies and independently verifiable transparency will have a profound impact on supply chains.

Technology is creating new mechanisms that enable us to trust unknown individuals, companies and ideas. Over the past five years we have seen institutional trust, in brands, leaders and entire systems give way to trust built on transparent community marketplaces. This wave of digital marketplaces, popularised by organisations such as Lyft and Uber, has taken the trust-by-proxy model to new levels. By developing and mastering a system of rewards and penalties, these digital marketplaces have enabled new types of transactions, often bypassing established supply chains, that would have been unthinkable less than a decade ago. Billions of everyday online connections among people, businesses, devices and processes power the economic activity behind today’s digital economy.

Old systems of trust must evolve to continue delivering value and remain relevant. For example, today’s consumers have a very limited view of the supply chains behind the products they purchase. This lack of transparency became established as the norm, not because there is no demand for improved transparency but because, historically, brands could maintain information control with relative ease. Consequently, we have lacked the tools to retrieve independently verifiable information.

Powered by low-cost, pervasive connectivity and sensing technologies, track and trace technologies are fuelling a supply chain evolution towards independently verifiable transparency and authenticity, from manufacture to point-of-purchase. This not only has the potential to overcome the threat of counterfeiting, but also helps to retain brand equity derived from characteristics such as authenticity, ethics and environmental and social values. For example, Global Traceability’s RADIX Tree software allows consumers to track their product to the point of origin, giving visibility on raw materials and suppliers to demonstrate compliance with the EU Timber Regulation (EUTR). By opening product supply chain information like this, suppliers can cut trade from counterfeit goods and differentiate their business by building impactful stories related to the product’s origin, authenticity, environmental and social impact

By offering better access to verifiable provenance data, suppliers can empower end-users to make better, more informed decisions about the products they buy, including environmental and social impact. This also introduces the opportunity for brands to re-connect with consumers by sharing distinctive product information. For example, this could be the airmiles taken by food producers or proof of compliance with Fairtrade standards through the supply chain.

With the rapid advancement in enabling technologies, such as digital identities and low-cost pervasive connectivity and sensing technologies, there has never been a better opportunity for new players and established organisations to build digital trust into supply chains. In doing so they can address the problem of counterfeiting, building more powerful trust relationships with end-users, while empowering consumers to make better decisions.

The report from the workshop – ‘Identifying breakthrough innovations that will transform the supply chain’ – is now available for download on the Cambridge Consultants website.