How Nike showed resilience in the face of unprecedented Global supply chain disruption
Leading up to the Christmas period, our Packaging Evolution Champion Kevin McAulay examines supply chain resilience and looks at which brands and retailers are set to ‘make or break’ during this critical trading period.
The pandemic has driven home the necessity of managing operational and supply chain risk. Companies are having to accept that planning for disruption and subsequent losses is critical to help them make better decisions about how to invest in supply chain stability. Covid-19, has been described as a ‘black swan’ event due to its unpredictability but across the world, war, geo-politics, climate change, terrorism, cyber-crime and many more unpredictable factors are causing disruption to supply chains on a daily basis.
80% of trade now flows through countries with declining political stability scores.
The World Bank
In total, we estimate that 15% to 25% of global goods trade, worth between $2.9 trillion and $4.6 trillion in 2018, may shift to different countries over the next five years owing to a combination of companies restructuring their supply chains and governments taking action to boost domestic production.1
How can big businesses remain resilient in the face of such uncertainty?
In a Deloitte survey of 50 retail executives and 15 subject matter experts, 78% of respondents also said that supply chain resilience was a key priority. Investments will need to be geared towards breaking down silos between supply chains, inventory management, and digital user experience.2
At the outbreak of Covid-19, like most businesses, Nike was left holding a lot of surplus stock and having to close stores across the world but the Company’s digitized supply chain enabled it to quickly divert goods headed for brick-and-mortar stores to e-commerce fulfilment centres. As a result, it minimized the hit to revenue at a time when its competitors sustained much larger hits. Nike also used radio-frequency identification technology (RFID) embedded in over a billion items to track inventory around the Globe enabling it to rapidly match goods with a surge in online demand.
Supply chain resilience isn’t just a pandemic buzz word but needs to be embedded in business planning to protect big business from risk and reconnect businesses with their suppliers and their suppliers’ suppliers.
Climate change is already impacting some of our key suppliers. It’s not a theoretical, in-the-future disruption. It’s real and tangible now, requiring shared solutions. The upshot is that we’re able to look at these problems — floods, droughts, power shortages or outages — and work with our suppliers to create ways to increase resilience and business continuity.
Marine Graham, VP of Responsible Sourcing and Manufacturing, Nike
Sun Strategy recognises the need for businesses to make connections with customers and suppliers throughout the value chain to harness value for business, people and the planet and as we emerge from the pandemic there will be a renewed focus on rebuilding, collaboration and sustainability. Technologies that support transparency and supply chain resilience will also be the technologies that drive sustainable practice and underpin customer perception. Our disruptive, digital solutions are transforming the global approach to sustainable packaging and pioneering the right choices for our clients, consumers and the planet.
About the author
Kevin McAulay - Account Director
Kevin has over 20 years experience in managing print and graphics for multiple global FMCG and retail companies. Kevin has experience working onsite at a number of clients sites including Nestle and Unilever and managing remote teams, with a great understanding of stakeholder engagement across multi disciplines.
What’s your experience? Join the conversation on LinkedIn.
- Fortune 2021
- Deloitte 2021