Intersecting Lean, CSR & Procurement: Nike’s New Supplier Sustainability Index and Program (Part 4)

Please click here, here and here for the earlier posts in this series.

Earlier in this series, we provided background on Nike's somewhat unique (at least by our view) approach to tying sourcing, lean and supplier management programs together. We also shared our perspective on programs we've implemented over the years for various organizations based a philosophy we describe as "lean sourcing," which could easily be extended to be called "lean sourcing and supplier management." Regardless of what you call it, the notion of introducing quantitative measurement and scorecarding into supplier engagement is one whose time has come. And in this area, Nike is out in front of the pack compared with peer organizations.

In the interview by GreenBiz, a Nike executive is asked whether or not the "writing is on the wall" for suppliers given the need to increasingly show transparency to remain as viable vendors. The Nike response is not surprising: "I think the signals are getting louder and louder ... suppliers are beginning to wake up; that there are new rules of engagement and that they will be, in this era of transparency, owning their reputations. And that it will be important; that it is a competitive advantage."

"Owning their reputations" is a truly insightful phrase. And in certain supplier management use cases and programs, this reputation might be one shared across a network. For example, with Achilles, a supplier management BPO service, industry-based supplier management consortia (e.g., an oil and gas group of organizations working with common suppliers) work together to collect standardized information from suppliers focused on compliance audits, risk, certifications, etc. Regardless, supplier behavior is something that will increasingly factor not only into supplier management and development decisions, but sourcing ones as well. When suppliers realize that they're losing business because of their actions, change will happen.

- Jason Busch

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