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Supply Chains Must Become Supply Networks to Survive the Modern Market

It’s time to ditch the “chain” in supply chain that we blindly use in our industry. How long have we conceived and operated this model with the central theme of industrial production and value creation as a chain?

As we recognize the disruptive changes happening at warp speed around us, especially in technology, it’s long past time to dispense with the chain-based model and the ubiquitous supply chain language we use to describe it.

Let’s reconceive our model, processes and production and reimagine it as an ecosystem-based network—a supply network. The re-imagination is necessary and timely.

Simply put, a chain is linear in definition: “a series of things correlated or following in succession, such as a chain of events.” This translates to all that we rant and rail against today: take>make>use>waste.

Think about it: that’s the same as Tier 4>Tier 3>Tier 2>Tier 1> brand/retailer>consumer.  But we don’t connect those dots and realize that’s exactly the decades-old model and language reflected in supply chains. Look at any process flow diagram of the industry and that’s what you see, a linear process referred to as a supply chain.

Among the many aspects of this model that are outdated, a linear model actually promotes a lack of transparency, traceability and visibility into all aspects of production. The figurative distance in the typical chain-based flow diagram between brands and their suppliers—especially between raw material and intermediate processing—actually creates very real distance and a lack of visibility and relationships with companies’ suppliers.

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The solution? Change the model, change the language. The behavioral change will follow. Compress production into a tight network of interdependent, highly connected partner suppliers working collectively to drive a better business outcome for all stakeholders, especially consumers.

A litany of drivers are at play in this system:

  • Sustainability: Building a 21st-century model to address environmental and social impacts, with “north star” aspirations like net zero and regenerative. This is nature’s model, hardly linear and largely perfected over 4 billion years.
  • Efficiency: A compressed, ecosystem-based network reduces time and space, reduces waste and generates speed. You know who’s doing this well out there.
  • Technology: Now advanced to the point where we have the ability to transcend time and space in many ways, otherwise known as industry 4.0, utilizing digitization of production, AI, machine learning, IoT, blockchain, remote sensing and automated/robotic manufacturing, among so many other advancements breaking down linear constraints and bottlenecks.
  • Consumers: Consumers want a better product at a fair price that doesn’t hurt people and the environment, and expect brands and retailers to deliver. And why wouldn’t they expect it? Why would we ever think to ask them this, and more importantly, ask them how much they’d be willing to pay to not hurt people and the environment? We continue to give consumers a false choice. A network model is integral to meeting increasing consumer expectations of our industry and our products.
  • Circularity: A linear model is the diametric opposite of circularity. An ecosystem-based network model works hand-in-glove to operationalize the principles of circular production and a circular economy.
  • Innovation: With a highly compressed, interconnected and interdependent network of stakeholders, working collectively and collaboratively, it’s easy to see how experience and knowledge can be more easily leveraged to innovate, and at a more rapid pace. Bringing farmers/ranchers, lab scientists, spinners, weavers, knitters, dye houses, chemical suppliers, garment manufacturers and brands more closely together will naturally promote continuous innovation. Silos embedded in our chain-based model do not.
  • Transparency and traceability: The chain model simply creates distance and lack of visibility. Most brands and retailers know very little about their suppliers outside of their finished goods manufacturers. It won’t be easy, but when we continually talk about essential stakeholders and participants in value creation as tiers in a chain, that does not promote transparency and traceability.

The benefits to making this change are manifold. From creating closer and longer-standing partnerships among all stakeholders, improving quality of products, faster and better problem-solving, and possibly the most important: creating trust and credibility with consumers, who are the focal point of this network.

If the definition of insanity is saying and doing the same things over and over and expecting different results, it’s time for the supply chain to start saying and doing things differently.

Let’s move this industry beyond the archaic model, language and behavior of our current chain-based model. Let’s take this opportunity to disrupt and transform it into an ecosystem of collaborative networks utilizing lateral thinking, state-of-the-art technology and processes; omnidirectional flows of data, information, innovation and materials; and valued, respected long-term relationships.

The time is now to move past the status quo and reconceive our model.

Jeff Wilson is the senior business development manager of sustainability for NSF International, an American product testing, inspection and certification organization.