I’ve Seen the Future…and it’s Transparent

Reflecting on my past week in Southern China, where I’ve been working with Walmart to help reach its ambitious environmental goals announced last October, my head keeps coming back to an extraordinary meeting I had with Liam Casey, the CEO of PCH International, a trading company responsible for sourcing many of the electronics (and other goods) common on US store shelves.

Casual China watchers may recognize Liam from the story James Fallows wrote about him in The Atlantic in 2007 (which subsequently became a chapter in Postcards from Tomorrow Square) and posts from Fallow’s blog, or from the radio profile the BBC ran on him this April.  Virtually all of the reports have referred to Liam with the honorary title of “Mr. China”, for his detailed grasp of the country and the emerging, and continuously changing, business culture.  Having read (and listened to) all of this background material prior to our meeting, I was ready to be impressed, but I was not quite prepared to be as dazzled as I was by PCH’s business model, or the software systems it has established to provide complete transparency into the products it sources.  

According to Liam, traditional trading companies in China thrive on chaos.  The more chaotic the manufacturing landscape the easier it is to demand higher premiums from international customers.  But, along with this chaos and supply chain opacity comes greater risk to end buyers – and I might add – greater opportunity for environmental degradation. His premise is simple: cut through the chaos and provide clear information about where the product is sourced (down to specific GPS coordinates), where all  components come from, who the factory owners are, what other products they manufacture, their histories, the type of equipment they use, and where final assembly and packaging take place.  Oh, and did I forget to mention he can track every order all the way to your doorstep?  With the software he and his company have created, he can.

Stating the obvious, this model of complete transparency holds tremendous business value for global manufacturers and retailers.  With the kind of information PCH provides, supply chain risk is reduced, inefficiencies are exposed and driven out, environmental impacts can be identified and improved and customers ultimately gain peace of mind and lower prices.

The future is here, transparency rules. The path is clear. It can be done. More companies need to follow Liam Casey’s lead.  The world will be a better place if they do.

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