Today’s marketplace is highly competitive. In order to differentiate themselves and stay ahead of the competition, companies must think of innovative ways to streamline their operations, increase efficiencies, and optimize productivity. One such aspect of achieving greater efficiency is through good supply chain management practices. Not super sexy, but super important, supply chains and supply chain management are topics that your business should be constantly evaluating!
Supply chains are all of the people, organizations and processes involved in the creation, distribution, and consumption of a product/service. It is the set of activities that ultimately determines the quality and cost of the end product or service for the customer. Supply chain management is the effective operation, and improvement of this network of people, organizations and processes.
Supply chain management is a relatively new subject and has only just begun to garner interest and attention by organizations in recent years. Previously, organizations were only concerned about their own operations and only payed attention to what was going on within their own facilities. This lead to disjointed, and ineffective supply chain management. In recent years however, there has been a fundamental shift in supply chain management practices. Companies are now recognizing that the end product or service that a customer receives will be influenced by actions across the whole supply chain.
The fundamental shift in supply chain management practices has come about with the introduction of social media. The use of social media in supply chains and supply chain management has enabled companies to improve their communications between partners, create more visibility and transparency with their products and customers, increase control in production practices, and reduce operational and labour costs. In essence, the supply chain becomes more efficient and stable, and increases customer satisfaction. Translation: happy customers = spending customers.
The ripple effect of using social media to improve supply chain management can expand outwardly across the entire organization. Social media can be used in many areas of the supply chain such as customer service, product development, process improvement, visibility, internal management, stakeholders, inventory management, innovation, purchasing, and organizational structure.
One company that exemplifies excellent use of social media in their supply chain management is Free Label. Free Label is a small Canadian based clothing company dedicated to creating environmentally and socially conscious garments. Whenever possible, the company uses local, ethical, and eco-friendly materials. The garments, including the labels and tags, are made in Toronto, and Vancouver to lower gas emissions from shipping, and to ensure the people making the clothes are being paid fair wages in safe work environments. The clothes are made from natural materials such as cotton and bamboo sourced from eco certified producers in India and the USA and are made in small batches so there is no waste. The fabric is also processed and dyed locally according to Oeko-tex eco-standards.
Free Label has an ethical production process and a transparent supply chain, which is something their customers hold in high regard. Stakeholders, including customers, are critical to effective supply chain management. They can influence the nature of individual supply chains by applying pressure around particular concerns they might have. Many aspects of supply chains are of interest and even concern to customers, such as the supply chains socio-environmental impact(s). This has certainly been the case with Free Label.
According to Free Label owner, Jess Sternberg, company stakeholders and customers play an important role in shaping the nature of the supply chain. “When our customers tell us what is important to them, we try and accommodate it. For example, some of our customers have expressed concerns around the bamboo textile and it’s ecological effects – so we are trying to offer some alternatives, like Tencel”.
Social media can impact the supply chain through the increased visibility that it provides of supply chains and through the opportunities that it provides for addressing customers’ desire for better understanding of how products are sourced. Free Label has capitalized on this use of social media in their supply chain management practices to publicize their environmental and social efforts on their social media accounts (Facebook and Instagram), with the intention of being as transparent as possible.
“Fabric is the most difficult area to get a transparent supply chain. We try to mill as much
fabric as possible in Canadian mills – but there is a huge shortage of mills that specialize in woven fabrics. And the minimums are very high, so if a style or colour isn’t as popular, we may have to use a fabric with less transparency. Even when we can mill our fabric locally, its difficult to obtain information about where the yarn comes from. I can obtain the certifications (like GOTS, or OkeoTex) but suppliers don’t readily share information about the farmers, what factory the yarn is processed in, etc. The textile industry is very secretive! We are actually starting to lean toward USA grown cotton – where we can obtain more information about the earliest stages of the supply chain, but we’re careful not to out-price our customers as the cost is significantly higher. It’s a fine balance. We do try and communicate information about our supply chains with our customers on social media and through our website” – Jess Sternberg, Owner.
The company also uses social media for data mining in their supply chain management efforts. Data mining is the gathering of data that can be used for better supply chain planning and control. Social media has influenced data mining by making high volumes of data on customers and matters related to the supply chain readily available. Jess Sternberg admits to using social media collected data for inventory management purposes, enabling the company to ensure there is no waste during the production phase. “We have used social media before to collect data on what styles and colours our customers want, such as by taking pre-orders, or by taking polls on Instagram. This helps us know which items to create additional inventory in, and which styles to keep lean.”
Free Label’s use of social media in their supply chain management practices seem to be paying off. Since it’s first season in 2015, the company has grown from just one tank top (the Betty Tank), to having a full collection and is now being stocked at over 30 boutiques and stores across North America. As consumers, we have become increasingly conscious about our purchases, vocalizing our objections to in hopes of making a positive difference for the people involved in the creation of our clothes and goods. Free Label has captured the importance of this and employs it in their supply chain management strategies, with the intention of contributing to an ethical shift in the fashion industry.
Lessons for Others
Though often overlooked as a mechanism for business improvement, better managed supply chains facilitate a competitive advantage and maximize customer value. The success of individual organizations in a supply chain is strongly influenced by the actions of the other supply chain members. Supply chain management is based on this understanding and is focused on maximizing the performance of the whole supply chain. Although Free Label is a small independent company, businesses of all sizes can learn from Free Label and how they use social media to assist in their supply chain management strategies, making their supply chain more efficient, stable, and increasing customer satisfaction.
Industry: Online Retail
Name of Organization Contact: Jess Sternberg, Owner
Authored by: Allie
If you have concerns as to the accuracy of anything posted on this site, please send your concerns to Peter Carr, Program Director, Social Media for Business Performance.
Ashleeyj. (2017). Free Label Ethical Apparel. Youtube. Retrieved on June 18, 2018. https://www.youtube.com/watch?v=5jAKRo_z4ac
Carr, Peter. (2018). Supply Chain Management. Course Material. University of Waterloo. Retrieved on June 18, 2018. https://learn.uwaterloo.ca/content/enforced/373949-CE-SMBP100_002_cel_1185/lecture-content/weeks/week5/week5.html?ou=373949
Fournier, Julia. (2015). You Should be Using Social Media to Improve Supply Chain Management. HCM Works. Retrieved on June 18, 2018. https://www.hcmworks.com/blog/you-should-be-using-social-media-to-improve-supply-chain-management