How open-source Big Data can improve supply chains
"There are areas in which to compete, and areas in which to collaborate."
LONDON-- Hannah Jones, VP of Sustainable business and Innovation at Nike, uttered those words to a conference room full of listeners at the Financial Times Innovate 2012 conference in London this week.
The heavily competitive sportswear industry is not somewhere you'd necessarily associated with collaborative firms and collective business intelligence, but according to the Nike representative, this is exactly what the company is trying to achieve -- through making Big Data analysis open-source.
If firms all contribute to a collective supply chain record, it is hoped you would then understand your own products and what resources are being extended more thoroughly. Achieve this, and it may be possible to "invent better", in Jones' words.
"Inventing better" is the phrase she used to explain how sustainability is going to become necessary for future businesses to survive. (All the while, flashing 'sustainable' Nike trainers in front of the camera). Making processes more efficient, turning 'waste' products into commercial material -- this is all part and parcel of understanding a supply chain and working out where improvements can be made.
Nike has long been a target of labor groups, Jones herself calling the firm a "poster child" in the 1990s as part of the anti-capitalist movement. In an attempt to tear itself away from a reputation soured by accusations of cheap labor and unfair supply chains, the firm is using Big Data to try and improve not only their business practices, but others within the industry.
As part of what Jones calls "open-source thinking", Nike has created a database containing details of each link within its supply chain, from material gathering to vendors in both manufacturing and retail. It is hoped that with the contribution of rival firms, this database could eventually become a 'vendor index' -- containing details concerning every vendor complete with ratings based on performance and trust levels. There are also plans for this data to not only be available for other firms, but to eventually go public so online users can contribute.
The reasoning? Collaboration with other firms that also rely on finite resources could result in less time wasted and quicker, more informed and efficient changes in both supply chains and business practices.
"If someone has spent the last year working on ways to make a shoe-box more eco-friendly, I'd think that was stupid if I'd also spent the last year doing the same thing," Jones noted.
By making access to data open when it can lead companies towards similar goals, it may be easier to spot weak links and warning signs within supply chains that rely on finite natural resources. In addition, weak production, unfair labor practices and poor business decisions could be quickly picked up and better understood -- leading to smarter choices and the deployment of solutions rooted in a deeper understanding of critical issues.
When asked how far along Nike was to achieving a sustainable and well-informed business model which relies less on finite resources and improves supply chains, Jones said the firm is "around six out of ten." It will take firms time not only to appreciate the value of specific data mining when related to supply and demand, but also to cut costs, eradicate weak links in business practices, and work out how to survive in an industry where natural resources are becoming scarcer and more expensive.