2020 marks the start not just of a new year, but a new decade. The news and trends that marked the 2010s will surely inform the way businesses manage supply chains in 2020 and beyond.
In the 2010s, we saw an increased demand among consumers for transparency and ethically-made products. Newsworthy events such as the horsemeat scandal and the Rana Plaza disaster highlighted the issues with today’s global, complex supply chains. Consumers began to view fast fashion more critically and ask more questions about the origins of their food. Numerous reports revealed that consumers are considering sustainability, transparency, and social responsibility when making a purchase—and are willing to pay more.
As the new year begins, how should businesses leverage the developments of the 2010s to ensure their supply chains meet the expectations of 2020 and beyond? The focus should be on establishing concrete goals, overcoming barriers to execution, and considering the consumer.
Establish concrete goals
In 2020, businesses must start “putting their money where their mouth” is, if they haven’t already. In other words, companies must quantify their transparency and sustainability commitments by establishing measurable goals against which progress can be assessed.
It is good to set ambitious goals such as “sustainable sourcing of raw materials” or “100% organic cotton” by 2025 or 2030. However, businesses must break these goals up into smaller objectives that can be assessed on a more regular basis.
For example, a company who wants to eliminate deforestation from their supply chains might first focus on a specific product or their immediate suppliers. They can set intermediate KPIs to assess progress regularly and use the findings to modify their approach. In addition, businesses can share their ongoing progress with consumers as a marketing initiative to keep them involved in the process and engaged with the brand.
Overcome barriers to execution
The reality is business have limited funds and resources that must be carefully allocated across the organization. Many times, supply chain projects struggle to secure the necessary resources—financial, personnel, or other—to support their successful execution.
Tying projects to company-wide strategic initiatives can emphasize their importance. How does the project help improve company reputation and increase bottom line? How can the supply chain data collected be used by other departments, such as marketing, procurement, or compliance, to increase ROI? What long-term difficulties and inefficiencies does this project address to improve company operations and reduce spend? Demonstrating the project’s benefits across the organization often results in greater budget and more resources.
Consider the consumer
Transparency significantly benefits businesses internally by helping them ensure their supply chains are cost-effective, efficient, and sustainable. However, companies should not forget the end-consumer, who is the ultimate driver of transparency.
It is critical to engage consumers: they are the ones who make a choice between competing brands and products. Developing initiatives with consumer engagement in mind—or finding ways to leverage existing supply chain data for consumer-centric purposes—can go a long way in securing trust and business.
Even relatively basic information such as where a supplier is located in can be used to showcase a company’s transparency. For example, Marks & Spencer, Target, and Gap Inc. all publish supplier lists or maps to inform their consumers and demonstrate their commitment to transparency.
Consumer expectations are likely to evolve over the course of the year and decade. Keeping tabs on what consumers want and planning supply chain initiatives around these demands will help businesses remain relevant as we enter the next decade.
The 2010s was about the rise of transparency and sustainability. The 2020s will test businesses in their ability to meet these new expectations and evolve with the changing landscape. Keeping these guidelines in mind will help ensure businesses are prepared and set up for success.