Ethical Supply Chains

At GoodOps, we believe transforming global supply chains to meaningfully address environmental and social issues is the fastest way to change the world. But systemic change is complex and a range of multidimensional approaches are critical to ensure success. We bring diverse groups of supply chain leaders together for intimate salons in order to achieve this goal. Every salon explores the strategies, models and technologies they are applying to create a more sustainable future. Last week, we gathered 20 leaders from Fortune 500s, high-growth startups, international organizations and academic institutions across a range of industries and regions. Our focus was the rise of ethical supply chains.

It is critical that companies improve the lives of their workers and communities through the development of more ethical supply chains. It is estimated that 80% of world trade and 60% of production runs through multinational company supply chains. In terms of global workforce, more than 20% have jobs in a global supply chain. Drilling down into 50 of the world’s largest companies, it is estimated that they directly employ just 6% of the workers in their supply chain. The remaining 94% of their “hidden” workforce is at least 116 million people. Within those jobs, over 50% are estimated to be exploitative with poor conditions, including long hours, dangerous working conditions, forced labor, low or poverty wages and informal work.

Broadly, this group of supply chain leaders who are setting the future of business, culture and government expressed that we may have reached a potential tipping point. A tipping point is defined as a series of small changes or incidents that become significant enough to cause a larger, more important change. The leaders gathered shared perspectives that pointed to a convergence of key trends that were accelerating the rate of change. These trends included increasingly conscious and demanding consumers, shifting executive mindsets, stringent regulations with criminal prosecution of bad actors and accelerated supply chain digitization efforts.

Below is a summary of what the leaders highlighted across these key trends:

  • Companies will no longer be able to avoid responsibility for their end-to-end supply chain networks. Deflecting criticism or risk by saying abuses occurred outside their direct employee base will fall flat and fail to satisfy conscious consumers, employees and investors. Proactive companies are already going beyond 1st tier suppliers to predict and address social issues from materials sourcing through final mile delivery. Most critically, they are directly engaging workers and performing onsite audits to avoid the risks inherent in company or supplier self-reporting where there is no 3rd party verification.
  • Consumers are arguably the most powerful lever in driving adoption of ethical supply chains. They are putting their money where their mouth is by purchasing responsibly made products as well as demanding more accountability from the brands they support. Companies will thrive by reducing information friction and helping consumers make ethical purchasing choices. The leaders also predicted a rise in employee movements, with consumers no longer checking their personal beliefs at the door when they come to work.
  • Governments will establish criminal consequences for brands who allow illegal activity in their supply chain, especially when it comes to modern day slave labor. It was predicted that governments may increasingly hold not just companies but executives themselves responsible for worker wages, equality and safety. In addition, incentives must be created for ethical companies to accelerate compliance.
  • Investors must more consistently check and confirm that the brands they invest in are ethically sourcing and producing their products and services. They must make a commitment to investing in companies that are rigorously audited and disciplined in their approach. It was predicted that the next 2 years will see a rise in mass investment screening tools that will identify shareholder activism opportunities and reallocate portfolios to avoid negative impact or support specific causes they care about. There will be a rise in funds that address supply chain sustainability in particular.
  • Technology solutions are the key to giving companies end-to-end visibility and scaling ethical supply chains. Technology platforms and tools focused on worker empowerment, product traceability, ethical sourcing and risk mitigation will become a core component of any technology stack. The resulting data and insights will be especially beneficial in supporting CEO and brand activism as well as consumer movements.

Companies that wish to lead in the future must take immediate action. First, analyze your industry and extended value chain to identify the greatest risks and opportunities for impact. Next, collaborate with value chain stakeholders to create an integrated roadmap for sustainable change across your strategies, systems, processes and culture. With a clear vision for the future, you can build the necessary capabilities, teams and partnerships to ensure success.

Do you think we have reached a tipping point for ethical supply chains? Want to get involved in the work GoodOps is doing? We’d love to hear from you.

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The Shadow Economy of Italy

Supply chains are moving in a more sustainable and transparent direction for industries around the world. While this global movement is evident to many, there are still companies, even countries, who remain in the dark ages. The shadow economy of Italy is a stark example. According to a recent New York Times article, sophisticated craftsmanship and hard labor in Italy is often underpaid and overworked. For example, seamstresses for high-end luxury fashion brands can be paid as low as €1 per meter of fabric they complete. The seamstresses and garment makers for these companies often go without contracts and are uninsured. In southern Italy, the most one seamstress has ever made is €24 on a garment. This is a fraction of the articles she produces that often sell for €800 – €2,000 euros for luxury brands. With a rise in transparency, how much will consumers tolerate from a company before they de-risk and humanize their supply chains?

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Continuous Innovation

GoodOps is excited to speak at the Home Delivery World conference, April 5th, on “Continuous Innovation: The Future of Supply Chain & Logistics”.  We’ll share 1) industry insights around why companies must put supply chain & logistics innovation at the core of their growth strategy, 2) the key components to successfully deploying a model of continuous innovation that integrates advanced technologies and sustainability frameworks, and 3) a case study on how helped one of the top 5 global supply chains rapidly launch and scale their innovation program.

Home Delivery World highlights include:

  • 2,500 attendees
  • 330 speakers
  • 300 exhibitors and partners
  • 260 sessions across two packed days
  • 90,000 Sq Ft of expo space showcasing the newest technologies including electric trucks, drones, autonomous vehicles, custom chassis and more

Please join us at Home Delivery World (link) using our 30% discount: GOOD30.

View our case study on launching a global innovation program and view our services to see how GoodOps can help you transform your global supply chain & logistics. Or send us an email at info@goodops.co to get started today.

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New York Supply Chain Meetup

Recently the GoodOps co-founders were invited to present at The New York Supply Chain Meetup and share their innovative take on supply chain transformation consulting services. We had an incredible time being able to hear the different perspectives on supply chain innovation from experts across the industry. Each of the companies that presented are taking unique approaches to integrating advanced technologies, sustainability frameworks and agile operations in order to help brands build a competitive advantage through their supply chain:

  • Ripe.io – Altering the trajectory of the food system through blockchain technology and the Internet of Things b.y designing a radically transparent digital food supply chain.
  • Homer Logistics – A team of software developers, optimization experts, and operations leaders focusing on optimizing the last-mile, expedited shipping space.
  • Chain.io – An experienced team of supply chain professionals who integrate logistics service providers, shippers, and software providers via a modern, secure, managed cloud.
  • LuxLock – A SaaS Experience platform designed around the shopper to provide the ultimate high-touch shopping experiences with premium and luxury brands.

For anyone interested in innovative supply chain solutions, The New York Supply Chain Meetup is a diverse, knowledgeable and open community of leaders looking to connect and exchange insights. The event is open to all, whether you’re an expert or just an individual looking to learn more about the industry, which promotes a lively discussion and new perspectives on the topics at hand.

We want to thank Brian Laung Aoaeh and Lisa Morales-Hellebo, our friends and the co-founders of the event, for inviting us and giving us the opportunity to present our ideas and services to all those that attended. If you are interested in signing up for a future New York Supply Chain Meetup, please fill out the form below on their website, and welcome to the community!

The New York Supply Chain Meetup Signup Link

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Press: GoodOps

Congratulations to ABLE for launching a bold and disruptive campaign in fashion – publishing factory worker’s wages. Based on a rigorous supply chain audit performed by GoodOps, brands can evaluate their supply chains for potential risks. ABLE is a social enterprise focused on uplifting women out of intergenerational poverty. They are taking bold steps towards transparency to ensure their social impact marketing aligns with actual business practices. Their big dream is brands sharing their worker’s wages on the label of each garment the same way nutritional facts are labeled on food.

ABLE believes consumers will demand change once informed on the human cost of their purchases. ABLE wants brands to take the #PublishYourWages challenge to lift more women out of poverty globally. GoodOps is proud to have designed and led the sustainable supply chain audit for this powerful and ground-breaking initiative.

Learn more about their revolutionary campaign to change the fashion industry in Fast Company. #PublishYourWages #ShesWorthMore #livefashionable

De-risk your supply chain and strengthen your social / environmental impact through a custom supply chain audit – learn more about our services here: GoodOps.

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Airbus’ New Supply Chain

Airbus has hired Bellevue-based Icertis to digitally transform their supply chain. Airbus’ new supply chain will be focused on source-to-contract solutions across its various divisions. With supply chain transformation taking over, Airbus becomes the latest example of how important embracing this change is for success. Airbus currently works with over 12,000 suppliers, so correctly managing their supply chain could prove widely cost effective and efficient. The aerospace manufacturer specifically chose Icertis for it’s rapid integration of digital supply chains transformation to companies globally. Certainly Airbus is looking for safer, more cost efficient and traceable solutions to their business, so this transformation was simply a matter of “when” rather than “how.” The company will have stronger agility through digitization, allowing for stronger relationships with commercialization. Will Icertis emerge as a leading digital supply chain transformer for companies globally? What type of success will Airbus see with a new, highly digitalized system?

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Amazon Raises Wages

Are better wages the new competitive advantage? Today, Amazon, a pioneer and innovator in commerce, media and technology, is unleashing their latest innovation: an industry leading minimum wage for all full-time, part-time and seasonal workers in the United States. Effective November 1st, the company will offer its 350,000 employees a minimum of $15 an hour. Although the pay increase is still a dollar short from federal livable wage, currently $16.07 per hour, Amazon is taking their criticism and transforming it into a competitive advantage. As Amazon raises wages, they are also pushing for federal law to follow their lead. If successful, Amazon will once again be ahead of the curve, as this cost will already be incorporated into their operations while other companies struggle to balance their finances. Also, as more companies seek to position themselves around social issues, Amazon has taken the lead on a topic that meaningfully and powerfully engages both their workers and consumers.

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Pizza Robotics

Zume, a restaurant chain founded in 2015, is propelling the food industry into the future by changing the way your pizza is made. The company uses robotics and artificial intelligence to receive orders, prepare, and deliver pizzas. Robots press the dough, squirt sauce, and then a human places cheese and toppings to your liking from an online order. Perhaps most noteworthy, the AI has collected so much user data, it can predict one’s order before they’ve even completed it. Zume’s system cuts order time by up to 20 minutes through these efficiencies. The restaurant’s high efficiency can even churn out 370 pizzas an hour. SoftBank is planning to invest $750 million in Zume’s pizza robotics, setting up this company to be a contender in the pizza delivery industry. Are automated cooking services the future of the food industry? Will human touch be lost in QSR efficiency, or will it remain an integral part of modern day culture?

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Transforming Food Quality

The age of wasted produce has a sustainable light at the end of the tunnel. Apeel, a company founded on the idea of reducing produce waste in grocery stores and supermarkets around the world, is transforming food quality by  increasing the lifespan of shelf items. By using a harmless plant-based coating, it can extend the lifetime on a shelf from days to even weeks. U.S retailers lose up to $18 billion annually on lost produce that’s thrown away.  However, Apeel is looking to cut this number drastically for the years to come. For example, Apeel reduced produce waste by 60% during an initial four month pilot with a leading U.S. regional grocery chain. Apeel executives have stated they plan to grow gradually, despite so much interest from distributors nationwide. The company has also hinted at aiming to stay just within the U.S. However, talks with Peruvian distributors may have the company heading in a more globalized effort in in the future. Food companies must innovate to meet future needs of both consumers and the environment. Where will technology lead us into the future with food sustainability? Will this be a key element aiding global hunger by reducing waste?

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Merck Implementing AI

German pharmaceuticals firm Merck KGaA’s health-care division is aiming to implement a new AI augmentation process. Merck plans to implement the new process after deciding to switch to an automated supply chain system. The new system will incorporate AI and predictive analytics throughout Merck’s entire supply chain in 2019. Incorporating this type of technology is known to provide a competitive advantage in the industry. Merck already is using forms of AI to show trends, dips, and spikes across 100 products in a pilot program. In 2021, so-called AI augmentation will generate $2.9 trillion in business value and recover 6.2 billion hours of worker productivity, according to forecasts from Gartner Inc. Since the beginning of their implementation, Merck’s CIO, Alessandro de Luca, has seen nothing but positive effects. Their success had led to them to push the pendulum to a fully automated supply chain system across their 5,000 products. Is AI going to be a key element for growth in any industry in the future? Where are there areas where this technology can’t be beneficial to industries of the future?

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