Supply Chain News Roundup

May 17, 2013

Lululemon, Horsemeat and Women in Supply Chain – Its a good read

Known for Recruitment Specialists in the narrow vertical of Supply Chain Management, Procurement, Logistics, Distribution Change Management and Retail, we always make a point of knowing what’s in the news in our space so we are always well educated and in the know in our understanding of how important Supply Chain Management is and its related functions are to the global economy.

Still, stories related to Supply Chain Management sometimes breakthrough to the wider media landscape and underscore the vital importance of Supply Chain in bringing products to market. As we blogged about recently on Bob Ferrari’s Supply Chain Matters Blog, there’s a global shortage of people going into Supply Chain Management as a field. But the more people who become aware of the risks involved in a failed Supply Chain, the more likely they are to realize the vast potential that the field offers and become involved.

To that end, here are some stories related Supply Chain Management that have surfaced recently in the news some might have missed:

  1. Lululemon Recalls Pants for Being Too Transparent:

Much sought after as the go to active wear and top fashion brand, Lululemon has experienced rapid growth in recent years as a maker of high-end women’s athletic wear. But companies that are rapidly increasing their scale can sometimes expose themselves to risk in terms of product quality and Supply Chain performance. That’s what looks to have happened in March, when Lululemon had to recall approx. 17% of its women’s pants because they were too sheer. From the company’s official statement: “The ingredients, weight and longevity qualities of the pants remain the same, but the coverage does not, resulting in a level of sheerness in some of our women’s black Luon bottoms that falls short of our very high standards.” The problem seems to come back to a Supplier from Taiwan, Eclat Textile Co.

This illustrates the importance of a crucial issue in Supply Chain, which is maintaining a diverse base of vendors and suppliers, especially when your product is known for its quality. When the quality from one supplier fell through, it looks as though Lululemon had too many eggs in one basket. The faulty pants cost the company as much as 60 million dollars by some estimates and sent their share price temporarily tumbling. Though it became a walking (no pun intended) punch line for a few weeks, the company is back on track for strong growth in 2013. But their Chief Product Officer, Sheree Waterson, was shown the door.

2. Horse Meat Scandal

This story was very widely reported in the broader news media, particularly in Europe. Food production companies, especially grocery stores, have among the most sophisticated Supply Chains out of any industry. Why? They’ve been importing internationally for a very long time, and their products are more time-sensitive than almost any other industry, and the sophistication of the food supply chain is closely linked to human health. This story originally broke in the first weeks of 2013, when Ireland’s food safety authority found traces of horse DNA in prepackaged supermarket beef products. In the following weeks, many British supermarkets (including Tesco, the third largest retailer in the world) were implicated in the scandal, which many in the media even deemed a “crisis.” Horsemeat was also found in products labeled as beef in France, Germany and Sweden. Fingers were pointed, and much of the meat was traced back to a Romanian slaughterhouse, with blame for the mislabeling going to a variety of food manufacturers in Europe.

While horse meat isn’t itself harmful to human health, there’s a big stigma against eating horsemeat in Western European countries. Furthermore, meat in Europe will now be tested for phenylbutazone, a veterinary painkiller used on horses that could be harmful if ingested by humans. European countries have stepped up their food inspection practices in the wake of the horse meat scandal, but this story shows a real failure of Supply Chain transparency, and how such a failure can impact consumer confidence in brands.

3. Canadian Supply Chain Sector Targeting Women to Fill Gaps in Industry

This last story hits closest to what we do at Argentus, which is staffing in Supply Chain Management in both permanent and contract – contingent positions. We’ve read and blogged about the talent shortage in Supply Chain, but here are some statistics:  According to a recent article in the Windsor Star, “Canada faces a shortage of 357,000 workers for the Supply Chain Sector” between now and 2020. That represents a huge part of our labour force. We’ve written about how both government and education systems need to step up and develop education programs that get young people excited about the career prospects that Supply Chain Management affords. It’s one of the only ways to fill the talent gap going forward.

As the Windsor Star reports, one crucial aspect of this talent gap is the fact that many Supply Chain roles, both tactical and strategic, are predominantly filled by men. According to the report, women hold only 39% of Supply Chain Jobs. But that’s changing. Linda Lucas of the Van Horne institute in Calgary has set up an organization and website called Women in Supply Chain. WISC aims to get more young women involved in Supply Chain through testimonials from prominent women in the industry, information about training and career options, educational events and programs. For our part, we’re eagerly awaiting new developments from organizations like WISC: the more great candidates who enter the field, the easier our job becomes.

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So to sum up, we have a story about a Supply Chain that wasn’t diverse enough in its suppliers (Lululemon). We have a story about a Supply Chain that wasn’t transparent enough in its sourcing (Horse Meat Scandal). And finally, we have a story about the overall need for talented individuals in the field, and one progressive, 21st-century initiative that is trying to fill that need. Clearly, there’s still lots of room for improvement in the rapidly evolving field that we breathe day in and day out.

We hope you’ve enjoyed this round up of Supply Chain stories that have caught our attention in the past few weeks.

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