PLM is Key to Transparency

By Robert Kaufman
The sustainability movement is everywhere you turn these days in retailing. It’s a philosophy that has permeated our social consciousness. We are captivated by the movement as a vehicle to improve our overall quality of life and protect the scarce resources of the planet for future generations.

Whether it is a social movement or simply a desire to know more about products we eat, wear and use every day, it is becoming increasingly clear that sustainability will influence consumer decisions for the foreseeable future.
Before purchasing an item, consumers want accurate information about a product’s materials, how it was made, and transparency into the supplier’s carbon footprint.  

To maintain the consumer’s trust, retailers need to respond and devise programs to provide the necessary sustainability information shoppers demand to know. Walmart is an early leader in this area by establishing a comprehensive sustainability program that includes the assignment of a sustainability index for its products.

Retailers like Walmart that have created genuine and robust sustainability programs have seen financial benefits, improved employee morale, and higher loyalty among customers.
 
The task of understanding and capturing information about supply chains, validating the authenticity and accuracy of the information, and continually monitoring the supplier’s compliance is further complicated by the fact that goods are manufactured in factories across the globe. A key mechanism to assist in capturing this information is the product lifecycle management (PLM) system.
 
Retail PLM systems have done a great job of providing a common platform for collaboration between a retailer’s design/development and sourcing teams and their agents and factories. This has resulted in reduced lead times, immediate visibility to the status of pre-production and production events, and a more efficient development process.

Now, with the need for true supply chain transparency, PLM systems can serve a valuable role. They already provide a place for a product’s bill-of-materials, which enables the retailer to know all the components in each product.
Additional classification can be enabled to further determine if the cotton in a pair of designer jeans, for example, was farmed organically and harvested sustainably.

Furthermore, retailers can use supplier scorecard capabilities in these systems or in complementary BI solutions to measure a supplier’s use of energy to create, package and transport items, track water consumption, and monitor the creation and disposal of waste.

Consumers are not yet demanding complete supply chain visibility, but the tidal wave of expectations is about to be unleashed as trendsetters like Walmart roll out new capabilities.

Proactive leaders will have a competitive advantage over laggards. Their product and supplier sustainability information will enable a comprehensive understanding of their supply chain, provide opportunities for product innovation, deliver a deeper connection with their customers, and demonstrate a commitment to being good corporate citizens and stewards of the environment.


Robert Kaufman is a partner with The Parker Avery Group, a boutique strategy and management consulting firm. For more information contact  www.parkeravery.com