Transparent supply chains: How digitalisation and new laws are the key to success

The introduction of the supply chain transparency law clearly demonstrates how important it is not only to ensure mere visibility of supply chains but to establish comprehensive transparency regarding social and environmental standards. Since the supply chain law came into force on 1 January 2023 – applying to businesses with over 1,000 employees from 2024 – more and more companies are coming under pressure. A transparent supply chain refers to the complete traceability of all goods deliveries and information flows along the entire supply chain, from raw material extraction to the end consumer. Companies know not only their direct suppliers but also upstream suppliers, production conditions, transport routes and materials used. The aim is full documentation and open communication on processes, risks and responsibilities.

Technologies such as IoT solutions  and blockchain management offer the perfect combination of transparency and live monitoring of freight data. With global IoT connectivity, not only is the digital transformation accelerated, but a partner is at your side to help track, monitor, analyse and optimise the entire supply chain.

• Location tracking: Thanks to real-time location tracking, it is always possible to precisely trace where goods are currently located.
• ETA updates: The estimated time of arrival is always visible, and any changes trigger an immediate notification.
• Condition monitoring: Temperature trends and impact loads on transported goods are precisely documented and monitored.
• A clear dashboard: A central data overview consolidates all information – including current inventory data in real time.

Supply chains are as individual as the products they generate. Depending on the industry, business model and market dynamics, they differ greatly in structure, complexity and flexibility. In principle, there are six different types of supply chain management models. From these, four main types can be derived, each with its own goals, challenges and requirements for transparency and digitalisation.
 
1. The continuous flow supply chain
This type of supply chain is designed for stable, predictable production and demand structures. It is particularly suitable for standardised products with low innovation levels, such as transport in the food or automotive industries. Processes are clearly defined, stock levels are easy to plan, and material flows are steady. Transparency is particularly important when it comes to increasing efficiency, quality control and traceability. With IoT solutions, conditions in production, transport and logistics  can be monitored seamlessly, contributing to a smooth process.

2. The agile supply chain
Agile supply chains are used where high flexibility and rapid response to changing customer needs or market conditions are required. Typical sectors include the fashion industry or the technology sector, where trends, seasonality or innovation cycles result in short product lifecycles. Transparency is crucial to quickly detect and respond to short-term changes – for example, through real-time data on inventory, delivery times or specific demand signals. Technologies such as AI and IoT make it possible to combine agility with efficiency.

3. The responsive supply chain
This supply chain is designed for customer-specific orders and a close coupling between supply and demand. Unlike the agile supply chain, the focus here is not primarily on speed but rather on precision and customer orientation. Companies in the electronics or automotive supply industry use this structure to meet individual requirements without wasting resources. IoT-enabled transparency ensures close coordination with the customer, precise demand planning and the ability to respond dynamically to changes in demand.

4. The custom-configured supply chain
This supply chain combines standard processes with individual adaptations. It is typical for products that are based on a common platform but are customised during final assembly – for example, in mechanical engineering, furniture or high-tech products. The challenge lies in integrating standardisation and customisation while maintaining high efficiency. Transparency is key to precisely controlling production processes, coordinating variants and reliably meeting delivery deadline

What is the difference between transparency and visibility in the supply chain
Transparency and visibility in the supply chain are often used synonymously but refer to two different levels. While visibility describes access to information, transparency involves the understanding, interpretation and targeted use of this data for informed decision-making. 
 
Visibility in the supply chain initially means that relevant information, such as the location, condition or status of goods, is recorded and made accessible. With modern technologies such as IoT sensors, track-and-trace systems  or cloud-based platforms, companies can see in real time where their products are, what processes are underway and whether any deviations exist.
 
Transparency refers to a comprehensive understanding of the entire supply chain, including its social, ecological and economic impacts. It enables companies to identify risks early, comply with legal requirements and understand the significance of the supply chain law, and to report credibly on sustainability and compliance.

The requirements of the supply chain transparency law increase the pressure on companies to implement sustainable supply chains and transparent processes – Telekom IoT supports this with digital technologies that transform visibility into genuine transparency and thus ensure legal compliance. Today, supply chain transparency is essential for sustainable, compliant and future-oriented business operations.