As more consumers become concerned with knowing where their products have come from, companies are embracing data collection efforts that will make it easier for them to track, manage and share shipping and distribution information. Retailers in particular are being asked to make their operations and supply chain management process more transparent so that customers understand the implications of their purchases.
"In the clothing industry, everybody wears it every day, but we have no idea where it comes from," said Michael Preysman, Everlane's chief executive and founder, in an interview with The New York Times. "People are starting to slowly clue in to this notion of where products are made."
The New York Times recently reported that several retailers have responded accordingly by releasing information on their website about where their products have come from and what their supply chain process is like. This has spawned further developments in related industries. Most notably, the Sustainable Apparel Coalition was formed, which includes large retailers like Nike, Gap, J.C. Penney, Target and Walmart. The organization has begun using a measurement technique, called the Higg Index, to identify the environmental footprint related to their manufacturing and distribution practices. The group also plans to expand the index so that it includes labor and social data as well.
Incorporating analysis into the supply chain
As consumers demand more information, it will be important for retailers to develop more sustainable practices. In addition, incorporating a higher level of sustainability also saves many companies money, reported the National Retail Federation's Jennifer Overstreet. She interviewed the Environmental Protection Agency's Cheryl Bynum, who is the national director of the SmartWay program, which encourages smarter supply chain practices.
Bynum explained that companies need to use data collection and analysis methods to better understand their processes, like how far items have to be shipped and areas where demand is highest. This information could be used when companies are considering whether to open new distribution facilities. The SmartWay program encourages participants to use this kind of data to make smarter shipping decisions.
"[Some shippers] adopt strategies such as no-idling policies at their docks, and evaluate and modify freight operations at their distribution centers and warehouses with flexible pickup and delivery scheduling and cleaner and more efficient freight equipment like electric forklifts," explained Overstreet, adding that some also find ways to ship more good per mile by using smarter packaging and routing processes.
In addition, retailers have to be cautious about their manufacturing and supply chain partners, wrote Retail Week's Roland Hutchins. This is because an accident or unethical situation that comes to light can harm a brand's value and reputation, especially as consumers are faced with more retail options. This can be complicated to track, with many companies relying on various sources for materials, contracts with various factories and facilities and a more complex global supply chain. Plus, jurisdictional and legal frameworks as well as language barriers can contribute to confusion. For all of these reasons, operations and supply chain management is even more important today than it was in the past.