To be able to critique REI’s supply chain management, one must first understand what a chain supply management is. The idea of a supply chain management is comprised of two concepts. The first indicates that the product that is produced and distributed out to the customer population is due to the cumulative effort of multiple organizations (Handfield, 2011). These organizations, then, make up the supply chain. The second indicates that few businesses who utilize supply chains rarely look beyond their own company thus resulting in disconnection among the various organizations within the chain (Handfield, 2011). This is where supply chain management system comes into play. Supply chain management, then, is the active management of the activities between the various organizations within the chain to maximize product production and delivery to improve competitiveness, thus maximizing customer satisfaction (Handfield, 2011).
On their website, REI explains how, within their supply chain, they have partnerships with such associations as the Outdoor Industry Association (OIA) and the Fair Factories Clearinghouse (FFC). To improve relations with suppliers and brands, they became an active member in the OIA Social Responsibility Working Group and the FFC. To add to their supply chain, REI joined the Sustainable Apparel Coalition (SAC). And their supply chain has continued to grow. In Peter’s (2002) article, it reports that REI has purchased a new supply system from Manhattan Associates Inc. This new supply chain system will allow REI to improve distribution by being able to distribute to an extra 40 stores as well as online orders without adding the cost of expansion to their distribution center. The supply chain execution solution to be used by REI is the PkMS. PkMS is a component of the Manhattan Associates Fulfill product that currently handles distribution to 61 of REI’s retail stores and two online stores. REI execs feel positive about the change. The positives that is focused on include REI will be able to utilize the technology that Manhattan Associates brings with them to not only improve order fulfillment but also have access to the transportation logistics component that will help REI to determine what methods of delivering products will be the most efficient and cost effective (Peters, 2002).
By expanding their supply chain to include an organization that has experience in supply chain management and distribution, it appears that REI is striving to not only improve working conditions but also production and distribution of their product to maintain high customer satisfaction. By having things organized to ensure that the communication between the various organizations is intact and fluid, REI will be able to decrease the risk of disconnection that will sometimes occur. This is especially imperative when it comes to human rights relations since they are an international company. From the information that has been provided, the system REI has put into place is working. They have formed relationships with third party auditors to ensure that they are in compliance with The California Transparency in Supply Chains Act of 2010. The only suggestion that could be given is to ensure that communication is open and fluid among the various organizations that make up their supply chain. Should this line of communication breakdown, then a lot would be at stake, especially being an international company.
- Handfield, R. (2011). What is Supply Chain Management? The SCRC Articles Library.
Retrieved from: http://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management - Peters, K. (2002). REI says new supply chain system will support store, online customer growth. Retrieved from: http://www.internetretailer.com/2002/08/21/rei-says-new-supply-chain-system-will-support-store-online-cust
- Recreational Equipment, Inc. (2014). Fair Labor and Factory Compliance. Retrieved from:
http://www.rei.com/stewardship/workplace.html.
