Date: Tuesday, July 27th, 2021
Source: Sourcing Journal
A few months back, I bought the first Nike product I’ve purchased in over a decade. It was a custom pair of sneakers that I was able to design on their website. After I hit the order button, I couldn’t wait for them to be delivered. Nike said it would take four weeks. Given the chaos in the global supply chain, I naturally assumed this meant 6-8 weeks.
Around week three, I started checking my email for the inevitable message saying that the shipment had been delayed. But to my pleasant surprise, they showed up — not only on time but a few days early. Props to Nike, as they successfully earned a new brand loyalist.
We’re in the midst of a sea of change in the way consumers absorb and evaluate brands they choose to support. The Covid-19 pandemic, likely more than any event in modern history, has put a spotlight on supply chains, globalism, and how businesses source and deliver their products.
My recent experience with Nike is just the tip of the iceberg. Consumers are evaluating brands from so many more perspectives than just quality and cost. They’re looking at whether companies meet their delivery deadlines, they’re looking deeply at how companies source raw materials, at their manufacturing practices, at the sustainability and environmental impact of their transportation, at reverse logistics (not only returnable items after use, but also sustainable and recyclable packaging), and, of course, at whether delivery windows meet the timeframes brands promise at the time of purchase.
From the point of where a raw material comes out of the ground to the way a product is ultimately disposed of after it’s used, and at every point in between, consumers are defining brands by their supply chain. In today’s world, and especially in tomorrow’s world, your supply chain inherently is your brand.
Consumers increasingly are scrutinizing the myriad of products that magically arrive at their doorstep after their online orders. How’d it get here? What were the human and environmental impacts of that delivery? What materials did it take to make the product?
As supply chain leaders, we are holding a double-edged sword. We suddenly have new levels of brand-facing responsibility, and, simultaneously, we have the power to positively impact the top-line growth of our companies. A single compliance issue or supply chain disruption can destroy years of customer goodwill, while a positive experience like the one I had with Nike can create influencer momentum overnight.
In the middle of this, we’re facing the largest logistics and transportation disruption in history. It’s tempting to throw up your arms and say, “I’ll take the product wherever I can find it” and “I’m just going to move the boxes.”
Fortunately, the solution for both the positives and the negatives is the same. The steady march towards more digitization in your supply chain will bring you both risk-reduction and brand benefits. Nike wasn’t able to impress me this year because of some magical work done the day the pandemic hit. They were able to do it because they’ve been committed to digitization for the better part of a decade. They’ve made it a board-level priority, and have invested throughout their company. They’re currently listed as a top 1% company by Sustainalytics.
So what can you do today? For most companies, the answer is the same as it always is. Keep getting better at the basics. Improve your visibility by more tightly integrating with your suppliers and transportation providers. Use this visibility to reduce your operational overhead and redeploy that brainpower towards finding new opportunities. Increase your agility by removing blockers to onboarding new providers through more flexible integrations including APIs and better partnerships with IT. Evaluate your entire digital nervous system to find the lowest-hanging fruit and be relentless in improving them.