Ripped from the Headlines: More Supply Chain Trends in the News

We’re less than a month into the new year and already some of my supply chain and logistics predictions for 2017 are starting to surface — namely, that we’ll see companies get more serious about eradicating slavery and conflict minerals from their supply chains, and that we’ll see a rise in cyber attacks, with supply chain and logistics operations becoming new targets.

In today’s “Ripped from the Headlines” segment, I revisit these predictions through the lens of recent news articles.

Lingerie maker Victoria’s Secret looks to uncover supply chain issues (Reuters) and Target invests in Minneapolis start-up that helps retailers monitor supply chains (StarTribune)

As reported by Reuters, “Lingerie giant Victoria’s Secret…has pledged to trace the sources of its wood-based fabrics, joining the ranks of fashion companies addressing human rights and deforestation, its parent company said.” Here’s more information from the article:

In a new policy statement, parent company L Brands said it aimed to eliminate sources of wood pulp, used to make rayon, viscose and modal, that contribute to rainforest destruction or violate the rights of local people.

L Brands is the latest in a growing number of U.S. fashion companies [including Ralph Lauren earlier this month] to commit to investigate its supply chain for products from destructive regions and stop using those sources by the end of 2017, according to Rainforest Action Network (RAN).

Although wood pulp isn’t a mineral, it does have its fair share of conflicts, which is why companies like L Brands, Ralph Lauren, H&M, Zara, Levi Strauss & Co, and others are updating their sourcing policies and practices. As Brihannala Morgan, senior forest campaigner with RAN, says in the article, “It’s encouraging to see brands beginning to take responsibility for their supply chains” — a point underscored by the news last month, as reported in the Wall Street Journal, that “EcoVadis, a French technology firm that ranks companies for environmental responsibility, ethical treatment of workers and other practices, has received more than $30 million in venture funding, as the business of vetting corporate supply chains continues to grow rapidly.”

In related news, the StarTribune reports that Target Corp. has invested in Inspectorio, a firm that focuses on helping retailers keep closer tabs on factories through inspections and data analysis. According to the article:

Inspectorio, founded a year ago by three brothers, helps retailers by digitizing what has often been pen-and-pencil inspection reports as well as by using a platform to help retailers bring more data science to monitoring supply chains.

“They have a lofty purpose and ambition about bringing transparency to the supply chain and sourcing world,” said Casey Carl, Target’s chief strategy and innovation officer. “That aligns very well to our approach and philosophy around where we want to take our sourcing practices and making sure we are doing everything within our power to build up trust and credibility and to pass that on to consumers.”

For many companies, it takes a negative incident to serve as a catalyst for action, and that is arguably the case for Target, which last summer cut ties with Welspun India Ltd., one of the world’s biggest textile manufacturers, after it discovered that 750,000 sheets and pillowcases labeled as Egyptian cotton were actually made with another type of cotton.

I’ll end with the same advice I always give related to this topic: If you want to create socially responsible supply chains, you have to develop a more granular and detailed understanding of your supply chains. You have to improve the way you communicate and collaborate with your suppliers, especially lower-tiered ones. And most importantly, you can’t outsource the responsibility; the buck ultimately stops with you, the brand owner. You have to see and walk your supply chain, from start to finish, with your own eyes and feet.

Delta Air Lines systems outage: 240 flights cancelled but systems now back to normal (ZDNet) and Computer outage grounds United Airlines domestic flights (USA Today) and Air Canada system outage resolved after halting boarding, check-in for customers at airports (Global News)

Yesterday, Delta Airlines experienced its second system outage in six months, causing the cancellation of 240 flights. As reported by ZDNet:

Delta said that its “essential IT systems” went down about 6:30pm on Sunday [January 29, 2017], and had been restored a few hours later. It said all systems were back to normal shortly after midnight on Monday [January 30, 2017].

This follows last Sunday’s system outage at United Airlines that grounded domestic flights for two hours. The airline simply tweeted that it was dealing with an “IT issue.” And a few days earlier, Air Canada experienced a “computer issue” that affected airport, online and mobile check-in resulting in some delays.

Although these airline IT outages and the many others that occurred last year weren’t caused by cyber attacks — “Or were they?” as one of my conspiracy theory friends questioned, wondering if the government would really tell us if hackers were attacking our airlines — they illustrate, nonetheless, the havoc a cyber attack could create on logistics operations.

It’s only a question of time, I believe, before these words from Matthew Mather’s book CyberStorm becomes an actual headline: “FedEx and UPS have ground to a complete standstill today due to what they say is a virus in their logistics shipping software.”