The SupplyChainBrain Podcast

In the world of fast fashion, social media can be both bane and salvation for manufacturers and retailers. Clearly, they are hoping it's the latter. Much press has been devoted to the negative impact of social media on products and brands. But there's a significant upside as well #150; provided that companies know how to exploit it. Handled properly, social media can be a rich source of intelligence on ever-changing consumer tastes, helping to determine products, styles and quantities that are right for the marketplace. On this episode, we speak with Peter Akbar, vice president and chief customer officer for fashion with SAP. He says companies need to be paying close attention to social media, which have the power to influence every step of the merchandising supply chain, from forecasting through manufacturing, distribution and final sale. Fashion companies, he says, ''are likely highly tuned race cars.'' Even the slightest edge can prove instrumental to a product's success. He also discusses how companies can integrate social media with their traditional forecasting and planning methods. Bottom line: ''Companies need to start believing in social media.''

Bad things are bound to happen in your supply chain. Are you ready for them? Recent history demonstrates how vulnerable companies are to disruptions in their supply chains. Whether it's a flood, tsunami, earthquake, volcano, disease, port strike, data breach, or any number of other potential disasters, the impact on global organizations is immense. Yet many seem not to have got the message. What's gone wrong? Where are companies most vulnerable today? What must they do now? We get answers to these and other questions in our conversation with Chloe Demrovsky, executive director of the Disaster Recovery Institute International. She details the cost of unpreparedness, as well as some of the misconceptions that companies harbor about the types of disruptions that entail the highest costs. Time to do away with what Demrovsky calls ''risk psychology'' – the notion that ''It's never going to happen to me.''

It's been about a year since the Securities and Exchange Commission began imposing its rule on the disclosure of conflict materials from the Democratic Republic of Congo in manufactured products. Are companies up to speed? Mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the rule applies to tin, tantalum, tungsten and gold sourced from mines in the DRC that are controlled by armed gangs. Companies are now required to reveal the presence of those commodities in their products, despite the difficulties of making that assessment in complex, multi-tier supply chains. On this episode, we speak with Paul Noel, senior vice president of procurement solutions with Ivalua, a vendor of software for procurement and spend management, about how far global businesses have come in complying with the rule. Noel also provides advice on what they must do to fall into line. While the rule lacks teeth – there are no monetary penalties for non-compliance – it nevertheless poses a substantial challenge to global supply chains. And it could get tougher in years to come. Consider it ''fair warning,'' says Noel.

Procurement fraud is costing global companies billions of dollars a year. So why can't they put a stop to it? The problem takes many forms: bribes, kickbacks, collusive bidding, conflicts of interest, exclusion of qualified bidders and the falsification of invoices, to name a few. The cost to companies hasn't been fully quantified, but there's no doubt that it's huge. In one recent case in Australia, the chief executive officer of fleet-management company Orix was accused of making corrupt payments of nearly US$388,000 to Coca-Cola Amatil, to secure vehicle-leasing contracts valued in the tens of millions. With so much at stake, why does the practice continue to plague companies today? On this episode, we speak with Tania Seary, founder of Procurious. She offers her opinion as to why businesses have failed to stamp out procurement fraud, how it can be detected, and what must be done to stop it. In addition, she raises the question of licensing procurement professionals, and talks about the skills and training that are needed to create a corporate culture that doesn't tolerate procurement fraud.

Will we ever cut off the flow of contaminated product from China and other offshore manufacturing sites? The recent revelations surrounding Lumber Liquidators, which faces criminal charges for the alleged presence of the carcinogen formaldehyde in flooring made in China, are only the latest example of serious slip-ups in manufacturing quality control. It's tough enough to police one's overseas suppliers for violations of human rights in the workplace – and even more challenging to detect the use of unauthorized and potentially hazardous ingredients in toys, apparel, home furnishings and consumer electronics. On this episode, we speak with Ron Keith and Mark Medlen, executive chairman and chief operating officer, respectively, of Riverwood Solutions. They discuss the challenge that companies face in monitoring their suppliers' production lines, given the presence of 22 million factories in China alone, and the $40bn worth of goods imported by the U.S. from China each month. And they propose an answer to the question: Why does this keep happening?

The battle against cybercrime rages on. And global supply chains remain highly vulnerable. It should come as no surprise that the globalization of supply chains, resulting in the addition of many new trade and service partners, has made companies more susceptible to breaches of their information-security systems. Often they come in unexpected places, such as the HVAC contractor that was reportedly the point of entry for attackers who stole customer credit-card information from Target stores. On this episode, we speak with Steve Durbin, managing director of the Information Security Forum, who describes the scope of the problem, explains why so many companies are vulnerable to cybercrime, and lays out the steps they should be taking to shore up their systems against attack. The ultimate solution, he says, lies in the adoption of a carefully crafted risk-management program, in tandem with detailed contracts with suppliers who might otherwise be conduits to information breaches.

Creating an ethical supply chain is clearly the right thing to do. But it can also help companies to cut costs and boost profits. ''Beyond Supply Chains'' is the name of a new report from the World Economic Forum, produced in collaboration with Accenture. It was intended to address the growing pressure on companies to ensure that their supply chains are having a positive social impact on the environment and local communities. The timing couldn't be better, given the litany of incidents we've read about in recent years: child labor, terrible working conditions in factories, the reliance on conflict minerals, environmental degradation and disasters such as the collapse of the Rana Plaza factory complex in Bangladesh. So it's essential that companies take steps to correct these deficiencies. As the report points out, however, they can also realize substantial commercial benefits from the effort. We're joined on this episode by Mark Pearson, senior managing director of strategy and operations with Accenture, who talks about 31 proven practices that yield a ''triple advantage'': socioeconomic improvements in local communities, improved sustainability, and benefits to the bottom line. He argues that doing the right thing doesn't always entail a tradeoff between moral behavior and commercial concerns.

We're still waiting for many of the emerging markets of Latin America to emerge. What’s holding them back? Four big obstacles, according to a new report from Transport Intelligence on ''Latin American Transport Logistics 2015.'' For all its promise as a thriving center of manufacturing and logistics, supporting both domestic and international markets, the region continues to be held back by corruption, violence, poor infrastructure and government bureaucracy. (That last category includes restrictions on imports maintained by difficult countries such as Brazil.) Cathy Roberson, lead author of the Ti report, guests on this episode to discuss the progress – or lack of it – that Latin America has seen in the development of a logistics infrastructure that can support economic growth and ensure the efficient movement of product region-wide. At the same time, the report finds significant opportunities for business and trade willing to take a chance on Latin America. Find out why, in Roberson's words, ''the region’s biggest enemy remains itself'' – and what can be done about it.

The way in which buyers pay their suppliers hasn't kept up with the times. The result: an unacceptable level of global supply-chain risk. Big companies today are demanding that their customers pay quickly and on time. Yet when it comes to paying their suppliers, it's a different story. Buying organizations are stretching out terms, to the point where a supplier might not get compensated for services for nearly two months. For smaller entities, that delay can threaten their very survival. So why, in a time of economic recovery, are buyers treating their suppliers in this manner? And what can be done to satisfy both sides? In other words, what constitutes fair financing? We get some answers in a conversation with Joe Hyland, chief marketing officer of Taulia, a provider of invoice, payment and discount-management services to buying organizations. Learn how companies can cure themselves of this ''epidemic'' of supply-chain risk, caused by the practice of slow-paying suppliers. As Hyland puts it: ''The Holy Grail of invoicing is getting paid.'' Which demands the question: How?

All global companies will tell you that they're committed to guaranteeing human rights throughout their supply chains. But how do we tell they're sincere? When it comes to corporate social responsibility, human rights is on a par with environmental protection. Both have something in common: Companies agree that they're important, but it can be tough to assess whether their position stems from a real commitment to the issue, or a mere desire to polish their brand. A new report, published by The Economist Intelligence Unit and sponsored in part by the accounting, tax and advisory services firm of WeiserMazars LLP, tackles that very question. Entitled ''The Road From Principles to Practice: Today's Challenges for Business in Respecting Human Rights,'' it combines a global online survey of businesses with in-depth interviews of human-rights specialists. Joining us on this episode to discuss the contents of the report is Howard Dorman, WeiserMazars partner and U.S. leader of human rights for the firm. He talks about what it takes to make a real contribution to the cause of human rights, and how far global business has come in that effort.