Published On: Tue, Aug 16th, 2016

What Rio 2016 Can Teach Us About Supply Chains

The Rio Olympic Games, like any time the Olympics rolls around, has been a massive spectacle so far. Over 10,500 athletes, hailing from 200 countries, have come to Brazil to compete in front of countless cameras and screaming spectators. Even if you’re not that into sports, the sheer scale of organising such an event is pretty awe-inspiring. However, these incredible figures are nothing compared to everything that’s happening behind the scenes.

Rio Olympic Games

The 2016 Olympics relies on two warehouses covering 105,000 metres squared, which are needed to store more than 30million items. Among this inventory are 70,000 tables, 10,000 smartphones, and 250 golf carts among other things. The logistics surrounding all this stuff is in the hands of 7,000 employees and ten times as many dedicated volunteers. As you can tell, the Olympics are not only a spectacle of athleticism, they’re also a massive achievement in supply chain management. Such a significant case study doesn’t come around all that often, so we’ve taken a closer look to how the commission has made Rio 2016 happen. Here’s what the Olympics can teach you about the supply chain.

Cost Optimisation

The Rio games started off with a budget of around $1.28 billion, but pretty soon this figure needed to be revised. The committee added four events, planned on using new technologies, and increased the overall security. These changes brought the budget up to $2.2 billion. The organising committee knew that there would have to be cuts, the only question is where those cuts would be. Fortunately they made the best of a bad situation, and started making budget cuts in areas that wouldn’t have much of an impact on the spectators and athletes. This meant some things being taken out of the opening ceremony, as well as some changes to the ticketing system. This, in turn, let the committee optimise their budget without diminishing the experience for those involved. Your business isn’t anywhere near as big as the Olympics, so cost optimisation should be a breeze! When you have to make cuts, make sure it doesn’t hit the customer too hard. Switch to a cheaper web host or order fulfillment center before you cut corners on the assembly line.

Sustainability

The emphasis on going green is as strong as ever, and we’re not going to see it disappear any time soon. Playing along, the Rio games are set to be the most eco-friendly Olympics in history. The committee at the head of it all have even talked about a Sustainable Supply Chain program. This is intended to keep the environmental impact of the games to an absolute minimum. All the suppliers who are involved with the event have got on board with more sustainable practices, and the committee organised training sessions for them during the bidding phase. Sustainability is a great thing for your business, both as a marketing ploy and a way to keep down costs. Take a look at your supply chain today, and try to come up with ways it could be made more sustainable.

Supplier Transparency

Countless suppliers are contributing to the Olympic games, and the organising committee has had to accommodate for all this. Instead of your standard requests for proposals, the Rio Olympics have been relying on their own procurement portal. All the suppliers who were interested in having their products used in the games had to register on this platform. Then, staff from the committee used it to announce what they were looking for, and liaise with all the prospects who were flooding in. Some had doubts, but the procurement portal proved to be a fantastic way to keep everyone informed and updated in real time. You probably know how damaging it can be if things get confusing when you’re first starting to communicate with prospective suppliers. Keep a clear, simple bidding process out in the open may save you from losing new business to this kind of mess. Put your detailed expectations and requirements up front, and always maintain open channels of communication.

Risk Management

If you’ve been running your business for long enough, you’ll know that having to manage several parts of a supply chain has all kinds of challenges. If you’re facing a lot of risks in running your business, think about what it must be like for the guys on the Olympic committee! In order to mitigate the risks it was facing, the higher-ups for Rio 2016 have been running test games since 2014. From then until now, the planning body tested 44 events in more than 20 venues. These were run all the way up to the opening ceremony, and tweaked for issues like the Zika virus, infected waters and political unrest. The risks faced by your business are probably completely divorced from those in Rio. However, you should still be managing them just as meticulously. There’s no room for error in a good supply chain, so make sure you have a plan for supply chain disruption.

Better Operational Standards

The organising committee obviously wanted every little bit of the Olympics to go swimmingly, which is why they set out some pretty strict criteria which all the involved suppliers had to meet. For example, the committee said early on that they would only acquire materials that were traceable. This was to ensure that the whole supply chain complied with international worker’s rights, and kept up green practices wherever possible. They also managed to ensure ethical hiring standards, by forming a partnership with the non-profit Sedex Global. This organisation is dedicated to maintaining ethical standards in all international supply chains. If it’s practical, raising the bar throughout your supply chain could be a great way to strengthen your brand, and attract a better class of partners. Whether it’s ISO, QS 9000 or your very own standards, set some criteria and stick to it.

For those of us in the manufacturing sector, The Rio Olympics offers a wealth of knowledge and pointers to draw on. Take some of these lessons into your business, and you’re sure to see some great improvements!