Saving Nike's Hide — Prioritizing Supply Chain Traceability For Sustainability

When it comes to global PR and supply chain blow-ups, Nike can't afford another nightmare incident like their little i2 debacle a few years back. Perhaps that's why, as sustainability becomes the rage, Nike is proactively taking measures in the area. They're making sure to invest in supply chain traceability to make sure that they don't lose their hide from using, well, the wrong hides. According to Roberto Michel's write-up in Manufacturing Business Technology, Nike recently made a significant announcement regarding its leather sourcing policy with the "goal to make sure its supply chain doesn't source leather from cattle raised in the Amazon rain forest region, much of which has been clear cut for large cattle ranching operations".

Roberto opines that making traceability a component of a supply chain for non-quality or non-safety reasons marks a new way of thinking. To wit, "Traditionally, traceability has been needed for product health and safety concerns: tracing that bad shipment of spinach, for instance, or that recalled toy. It's a sign of the times when global warming becomes a driver for supply chain traceability." And it's especially a sign of the times when such programs have teeth.

According to Nike's policy listed on the corporate website as well as the Commit or Cancel program Nike is committing to, there are 5 key elements of this program. The first three elements outline the commitment but the fourth and fifth ones are most interesting for our broader purposes here. First is a commitment to "no recent deforestation in the supply chain". Second "no infringement of Indian lands or protected areas in the supply chain". Third "no slave labor in the supply chain". Fourth, "A full farm traceability system needs to be in place" (emphasis added). And fifth, "Ensure compliance and high standards in the supply chain [by] informing suppliers of these requirements, making it clear violators will not be accepted as suppliers. Verify compliance with all of these requirements through an independent audit."

Given Nike's commitment to a quarterly review process of their leather supply chain in the region, there's no doubt technology will play some role in the collection and management of the documentation and commitments on behalf of suppliers and sub-tier suppliers -- not to mention the auditing process itself. But whether Nike opts for a spreadsheet approach or one based on supplier information management (SIM) technologies remains to be seen. I'm sure SIM providers like Aravo, CVM Solutions, D&B, Rollstream, Hiperos and Ariba would love to get a call about how they could help Nike save their own hide, so to speak.

Jason Busch

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