Supply Chain

When president donald trump invoked the Defense Production Act yesterday, it was telling in two respects. First, it showed that the full force of the federal government will be brought to bear in the manufacturing of vital medical supplies. Second, it underlined what has already become clear: The way our modern supply chain is built is incredibly fragile.

If you were to ask 10 people their thoughts on the term “supply chain,” you’d likely get 10 different answers as to what it truly means. Businessdictionary.com defines supply chain as:

Entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer. It comprises of vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who bring the product to the ultimate user. Supply chains underlie value-chains because, without them, no producer has the ability to give customers what they want, when and where they want, at the price they want….

Companies from Patagonia to Nike to Levi’s are leading the charge on social responsibility and supply chain transparency and they’ve encouraged their competitors to follow suit. But getting better visibility into a supply chain is an expensive and time-consuming endeavor for apparel makers. But do customers really care, and if so, are they willing to reward a company for its efforts? A new study in the INFORMS journal Manufacturing & Service Operations Management finds that customers do indeed value information related to a company’s supply chain — and many are prepared to pay a premium for greater supply chain visibility.