If you haven’t heard of the circular supply chain, then now would be a great time to learn about it.
To start, check out Sarah Barnes-Humphrey’s recent article on the Procurement Foundry blog; Is ‘circular’ the end of the road for the linear supply chain?
The Netflix example that Sarah provides is a great analogy to describe the circular supply chain. Specifically, the “through an endless series of loops,” reference in which views of the “product” is “consumed” again and again and again,” and for which “there is no end.”
The problem is that most organizations – especially the manufacturers of consumer products do not seem to have a handle on what impact the circular supply chain can have on their brand image or reputation.
Pop-up Distributors
You are probably familiar with the term or concept of a “pop up business.”
Basically, a pop-up business is a temporary or short term enterprise that is set-up to take advantage of a “fleeting” or short-term opportunity. The booths in malls that are set-up during the holidays immediately come to mind.
As a result of the COVID-19 crisis, in which the general populace is homebound, ordering on-line has become the new norm. In response to the corresponding increase in demand, food and cleaning supply distributors are “popping-up,” and with them potentially “serious” problems for the original product manufacturers. It should be noted that some of these pop-up distributors are not new, but before the crisis was not doing business with the public directly.
Product Quality Questions
When my local grocery store did not have the products, I needed a friend suggested I try one of these local distributors. Apparently, they could provide both food and cleaning products at an affordable price with next-day delivery. Since I needed the products, and it is good to support a local business, I contacted one to place an order for several items. Included in my order were kitchen sanitizing products as well as food such as pasta, pop, and a couple of bags of my favorite Brookside dark chocolate-covered pomegranate treats.
True to their word, the products were delivered by the next day. Great, right?
Unfortunately, and on further examination, everything was either just expired, expiring or worse – see the example below, long expired.
When I called, Hershey’s regarding the Brookside treats they indicated that although expired, the product was still edible. They did, however, suggest that I consume them within the next 30 days to ensure maximum freshness and quality. They were also surprised that the product was being sold through an unknown distributor.
While eating old chocolates may result in a poor taste experience, what about the industrial-strength disinfectant with a November 2012 expiration date? At best, the product would likely be ineffective, at worst it could be toxic. The point here is that for those who are not as diligent at checking best before dates, there could be severe consequences such as someone getting sick.
Remember we are not talking about opened or previously-used products here. They were all factory sealed. In this situation, who is responsible in the “endless series of loops” of the circular supply chain when products are reintroduced into the market multiple times?
Beyond any potential legal ramifications should someone fall ill, what is the impact on the brand under whose name the product is sold? At what point in the supply chain does product and brand responsibility shift from the maker to the distributor or reseller?
The COVID-19 crisis is impacting all areas of our lives, and I would suggest it is exposing cracks in our chains of supplies that would otherwise have gone unnoticed. As the social distancing measures continue – some governments are hinting that we could be under quarantine for months maybe even longer, what will we do when regular channels of distribution are unable to fulfil the public’s needs? How many of these pop-up distributors will emerge?
In the end, there may be more questions than there are answers, but one thing is sure; the face of the product or brand is going to be the most recognizable and therefore likely target for consumer angst and anger. Concerning this latter point, the public’s memory is quite long.
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Broken chains and brand corrosion: How the gig economy is undermining major brand images
Posted on April 8, 2020
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If you haven’t heard of the circular supply chain, then now would be a great time to learn about it.
To start, check out Sarah Barnes-Humphrey’s recent article on the Procurement Foundry blog; Is ‘circular’ the end of the road for the linear supply chain?
The Netflix example that Sarah provides is a great analogy to describe the circular supply chain. Specifically, the “through an endless series of loops,” reference in which views of the “product” is “consumed” again and again and again,” and for which “there is no end.”
The problem is that most organizations – especially the manufacturers of consumer products do not seem to have a handle on what impact the circular supply chain can have on their brand image or reputation.
Pop-up Distributors
You are probably familiar with the term or concept of a “pop up business.”
Basically, a pop-up business is a temporary or short term enterprise that is set-up to take advantage of a “fleeting” or short-term opportunity. The booths in malls that are set-up during the holidays immediately come to mind.
As a result of the COVID-19 crisis, in which the general populace is homebound, ordering on-line has become the new norm. In response to the corresponding increase in demand, food and cleaning supply distributors are “popping-up,” and with them potentially “serious” problems for the original product manufacturers. It should be noted that some of these pop-up distributors are not new, but before the crisis was not doing business with the public directly.
Product Quality Questions
When my local grocery store did not have the products, I needed a friend suggested I try one of these local distributors. Apparently, they could provide both food and cleaning products at an affordable price with next-day delivery. Since I needed the products, and it is good to support a local business, I contacted one to place an order for several items. Included in my order were kitchen sanitizing products as well as food such as pasta, pop, and a couple of bags of my favorite Brookside dark chocolate-covered pomegranate treats.
True to their word, the products were delivered by the next day. Great, right?
Unfortunately, and on further examination, everything was either just expired, expiring or worse – see the example below, long expired.
When I called, Hershey’s regarding the Brookside treats they indicated that although expired, the product was still edible. They did, however, suggest that I consume them within the next 30 days to ensure maximum freshness and quality. They were also surprised that the product was being sold through an unknown distributor.
While eating old chocolates may result in a poor taste experience, what about the industrial-strength disinfectant with a November 2012 expiration date? At best, the product would likely be ineffective, at worst it could be toxic. The point here is that for those who are not as diligent at checking best before dates, there could be severe consequences such as someone getting sick.
Remember we are not talking about opened or previously-used products here. They were all factory sealed. In this situation, who is responsible in the “endless series of loops” of the circular supply chain when products are reintroduced into the market multiple times?
Beyond any potential legal ramifications should someone fall ill, what is the impact on the brand under whose name the product is sold? At what point in the supply chain does product and brand responsibility shift from the maker to the distributor or reseller?
The COVID-19 crisis is impacting all areas of our lives, and I would suggest it is exposing cracks in our chains of supplies that would otherwise have gone unnoticed. As the social distancing measures continue – some governments are hinting that we could be under quarantine for months maybe even longer, what will we do when regular channels of distribution are unable to fulfil the public’s needs? How many of these pop-up distributors will emerge?
In the end, there may be more questions than there are answers, but one thing is sure; the face of the product or brand is going to be the most recognizable and therefore likely target for consumer angst and anger. Concerning this latter point, the public’s memory is quite long.
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