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Who Really Pays The Price

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What is a Brand? –

A brand is your company image”. It also includes your customers’ experience and the expectation you set when doing business with your company. In short, it is promise

What is a Supply Chain? –

A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves.

It is an 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.

For as long as can be remembered, a company has come to be identified not only by its name but also its logo which we have come to understand as “A BRAND”. However from the definition, it is obvious that a brand is much more than a name and the company’s logo. As such when I buy a bottle of Coca Cola as a customer I am buying the experience and expectations “that I will have a smile when I feel the taste of it in my mouth”

This brings me to the question asked by this write up, “who really pays the price?” Many of our businesses today have attached a promise to their brand that makes the consumer believe that by purchasing an item and/or service of a specific business, they are actually living the promise made by the business. E.g. Toyota – Good Thinking Good Products, Coca Cola – Have a coke and a smile, Nike – Just Do It, Globacom – Unlimited, Airtel – We’ve Got You Covered, Etisalat – Now you are Talking, MTN – Welcome To Our New World etc.

The truth is the finished products or services we attach to a brand, has a long chain of items provided by others who we the ultimate end user never see neither do we know who they are. As such it is assumed that companies will take the time and effort to ensure that those who provide them with the input goods and services towards the completion of the product and/or services the consumers buy are responsible enough to ensure that such goods and/or services are not harmful to the ultimate end user.

Over the last three decades, we have seen the companies that have been shaken and some even collapsed from the negligence of their supply chain companies, just because they refuse to ensure that such supply chain companies are responsible to the needs and expectations of the ultimate users of the product and/or service.

A few examples of companies who have been negligent in monitoring the sources of the inputs of their supply chain and who have suffered huge financial and sometimes human losses has shown that end users will someday ask the question – How have you been keeping your promise to us?

  • Nike with the issue of Child Labor in their supply chain in the manufacturing of soccer balls in Asia
  • BP with the issue of safety level of their service contractors in the oil spill in the Gulf of Mexico
  • Wal-Mart, Primark, Benetton etc. with the issue of production factories in the collapsed building in Bangladesh
  • Developers and Regulators in Nigeria with the issue of collapsed buildings in Lagos
  • Nestle with the issue of deforestation for the production of palm oil in the production of Kit Kat chocolate in Asia
  • Auto and Mining industry with the issue of fairness in labor wages and working conditions in South Africa
  • RC2 Corporation and Mattel with the issue of lead in the paint used in the production of their toys which was harmful to children in the United States of America.
  • The issue of Blood Diamonds trades in Angola, Liberia, Sierra Leone, Cote D’Ivoire, Democratic Republic of Congo and The republic of Congo.

The list is endless and is continually increasing with companies incurring huge financial and human losses due to their inability to ensure that their supply chains are doing the right things in the provision of products and services that are attached to your brand and its promise.

Using Abraham Lincoln quotes, “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time”, it is time for businesses to start managing and mitigating the ever present risk of their supply chain in order to ensure that their brand and its promise are being kept.

In conclusion, and to answer the question, it has become more and more obvious in the reality of today’s global business world that the price for poor supply chain risk management is not and will most time not be a cost to the supplier, but a huge cost – financial, human and others – to your business brand and its promise.

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