In one of my all-time favorite videos, Nike’s co-Founder Phil Knight provides the voice over to questions that plague the footwear and apparel industries. Even back in 2014 he talked about “Embracing Transparency” as a way not only to protect their consumers and brand, but to amplify them. So why hasn’t this effort to drive transparency gone farther and faster for both Nike and the greater footwear and apparel industries? The truth is that it’s REALLY HARD, even for industry giants like Nike, adidas, and Patagonia who want to make it happen as soon as possible.
In most cases, our industry is not vertically integrated. Footwear and apparel are not usually made by the brands that sell them. Adidas doesn’t make its own apparel. Under Armour doesn’t make its footwear. These brands, large and small, design products and then sign contracts with factories around the world to make those products for them. Similarly, those manufacturers rarely make the materials that go into products – they purchase materials from another company, who doesn’t make their raw materials either. This disconnected supply chain stretches all the way back to the farmers who grow cotton, the ranchers who raise cattle (for leather), and the petroleum companies who extract oil and process related chemicals to become polyester, nylon, foams, and synthetic rubber. Gaining visibility to all of the transactions that make up this supply chain (when you don’t own all of the parts) is a Herculean task. Never mind the efforts of some supply chain participants to obfuscate or falsify legitimate transactions, audits, and other evidence of where parts and pieces originated.
It is this very situation that Mr. Knight contemplates. But the world is a significantly different place than it was seven years ago when he made that video. Governments are taking a stand against abusive practices. A new generation of consumers demands change and votes with their dollars. Brands see that investing in transparency is no longer a “nice to have” but is increasingly critical to both consumers and stakeholders.
Thankfully, new technologies not only give us insights into the scope and severity of the problem, but provide solutions that simplify the task. Mobile devices enable sellers and buyers to capture data and evidence in the moment. Expanded internet access brings connectivity further and further into the supply chain, all the way to farms and oil fields. Sensors and the internet of things (IoT) capture the movement and conversion of materials in real time. Analytics and artificial intelligence provide insights to the supply chain that were not possible just a few years ago. And distributed ledger technologies (e.g., Blockchain) make it nearly impossible to “fake” or falsify information and evidence related to supply chain activity.
So, rest assured – the vision that Mr. Knight voiced nearly a decade ago won’t echo for long. That vision is becoming a reality. Transparency is here and available to those who are willing to embrace it.