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It’s a Marathon Not a Sprint – The Challenge for Potential Suppliers to the London 2012 Olympic Games

As was the case with their predecessors, London will hope to be invigorated by hosting the 2012 Olympics, with the Games offering substantial opportunities to its community of stakeholders, not least supply chain organisations. The Olympic Games has the lure of substantial income and the potential to generate considerable publicity for suppliers of goods and services at all stages in the supply chain. These opportunities are available to all, from producers of raw materials to manufacturers and logistics operations, as well as to the retail outlets on and around Olympic sites.

However, the opportunity to supply to the Games, and in particular to Olympic sites, will depend on an organisation’s ability to meet the exacting demands of the organising committee.

This article therefore considers the characteristics and behaviours that may provide advantages to those endeavouring to gain an edge over their competitors in securing Olympic glory.

The Business of the Olympic Games

The 2012 Olympic Games provide openings for suppliers of almost every type of product imaginable – construction companies and their suppliers are already playing a major role, and food and beverage suppliers can expect a bonanza, as can suppliers of athletic and pseudo-athletic clothing. Sun creams and pharmaceuticals may be required in large quantities, depending upon the weather and other variables of the Olympics, while health products and equipment will also be of great importance for the Paralympic Games that follow the main Olympic event.

Purveyors of decorative products – plants, paintings, even carpets and the like – will also have a role in enhancing the buildings and commercial outlets on the Olympic sites. Banks will be expected to ensure that spectators and other visitors have easy access to cash to buy ‘must-have’ London 2012 merchandise. Indeed, with the probable exception of armaments manufacturers, virtually the entire UK manufacturing sector will have a major opportunity to advertise itself and its products.

Some of the key issues that prospective suppliers need to consider relate to the winning bid itself, particularly the objectives of the International Olympic Committee (IOC) and of London 2012. The 2012 Olympics were awarded, in no small part, on the basis that London would be the “Legacy” Olympics – an event that would leave behind a legacy of sporting and other infrastructure. What, on previous occasions, has been a fleeting spectacle with a residue of litter, debts and decaying buildings in out-of-the-way locations is, in the case of London 2012, intended to be a lasting resource for generations to come. In addition, the bid emphasised careful husbandry of resources. The themes associated with legacy can be expected to figure in the selection processes which are about to commence as the procurement cycle gets under way in anger.

For any supplier to the 2012 Olympics, the chance will come once and once only. If grabbed with aplomb and imagination, the opportunities that the Games offer may come to provide income and stability for many years. It is therefore highly important that supply chain organisations – whatever their role or products – ensure that they meet all the criteria.

The Exam Questions

There will obviously be different considerations for each industry, as well as for organisations performing different roles within the supply chain. However, four specific considerations will make supply chain services to the 2012 Olympics different from the everyday business of most organisations. These four considerations, which will be addressed in turn, are:

1. Security
2. Sustainability during the Games
3. Sustainability beyond the Games
4. Legacy

Each of these will have a greater or lesser impact both on the way in which organisations will operate, and on the way in which they should endeavour to gain London 2012-related business.

1. The Sixth Ring – Security

Security is a key issue. The onus of security is too great to be left to governmental and policing authorities alone; in the same way that the general public maintains awareness of unattended baggage, it is vital that organisations do everything they can to minimise risk. The key to lasting success for most supply chain organisations is their reputation, and carelessness in respect of security could adversely impact on that reputation.

Foodstuff suppliers will have to ensure that they can demonstrate that there is minimum risk of their products being contaminated (whether through negligence, accident or malicious actions). All suppliers will need to demonstrate that they have considered the manner in which their products are manufactured, packed and delivered, so that risk to the public is minimised. Suppliers wishing to be involved with the Olympics should already be considering what they need (and are willing) to do in order to satisfy these criteria.

This, among other things, means that there will be a need for careful selection of staff – a single employee at any point in the production process is capable of introducing contaminants or impacting the product’s quality. Hence, employers and managers must reinforce their standard practices to ensure they employ trusted staff. Where they are supplying the Olympics, they must be prepared to divert their most reliable personnel to that end.

Toyota’s recent experience has demonstrated the limitations of putting trust in suppliers performing quality checks on their own products. Although mandating suppliers to check the quality of their produce is a proven approach which has generally been successful, the compressed timescales and potentially hectic environment in which the Olympic Supply Chains will operate mean that in many cases it may become appropriate to initiate temporary procedures to support those which exist. Through this, Supply Chain security (and the avoidance of deliberate or accidental contamination or defects) will be enhanced and simultaneously quality may be maintained and potentially improved.

2. Going for Green – Sustainability during the Games

The sustainability of products also has a high profile at present. Best practice in manufacturing generally means minimising waste and actually doing those things which enable sustainability. Suppliers to the Olympics will have to consider those aspects of their products which do not support sustainability – packaging, for example, but also transportation costs, emissions and returns/waste management attributes of their products. Clear advantages may be gained by those organisations which are most able to demonstrate control of waste products and minimisation of unnecessary packaging and processing. Being able to prove that a product is highly sustainable, and that the organisation has processes for continuous improvement, will be advantageous. With clothing, as well as with food, the level of sustainability of materials – including environmental costs of manufacture and delivery – will be an important issue, and it is to be expected that the London 2012 management team will ensure that they meet the promises made to the IOC.

Reducing emissions and waste is also essential – it would be worth organisations ensuring that their partners in their supply chain become collaborators, contributing to efforts to minimise transportation costs and help reduce overall energy and material use. There will be advantages where such collaboration can be shown to support businesses local to the Games – thereby also providing a level of post-event sustainability and enhancing the stability of those organisations.

Also to be encouraged would be sharing of facilities – particularly relevant to logistics (reverse flows, for example, or shared loads). Information sharing and genuine collaborative supply chain management will be important characteristics that will help demonstrate the credentials of would-be suppliers and other supply chain actors.

3. In it for the long haul – Sustainability beyond the Games

One aspect of the Olympics which has not been widely considered is the impact of the event on its suppliers once the Games have finished. The short, sharp, and potentially highly profitable few weeks of the Olympics and Paralympics will inevitably give way to the English autumn and winter, and a corresponding fall in demand. Indeed, the short period separating the two major sporting events will also mean that the profile of products required for each will be different – it is likely that less ice cream and more tea and coffee will be sold at the Paralympics than at the Olympics, for example. Any organisation which goes into supplying the Olympics with the idea of making a large killing over a short period also needs to consider what the impact will be on that organisation in the longer term.

A potential supplier which spends money on increasing its manufacturing capacity for the Olympic period may find itself with expensive equipment that quickly becomes redundant. A haulage firm may dramatically expand its fleet without consideration for the drop in demand after the event. In such ways – and in many less obvious ways – opportunities may be missed or problems created unless forethought is applied concerning how to address each possible consequence of bidding (and especially winning) contracts to supply to London 2012. It is not just at the end of the “boom” part of economic cycles that companies find themselves with unwanted inventory and unused capacity.

4. A Better Future – Legacy

As discussed previously, a key consideration of the London 2012 organisation is the Games’ legacy. In applying to supply to the Games, suppliers will benefit if they can demonstrate that they are providing part of that legacy. Clearly, it is far easier to envisage the construction industry providing a legacy than it is to see what the fresh food industry can achieve.

However, the legacy does not need to be in the form of a magnificent edifice. It may, for example, mean a commitment to retaining a retail outlet in the site area for a period after the end of the events, or perhaps ensuring that materials used may be re-used for clearly defined purposes (ideally purposes which will provide social benefits, especially in the area in and around the Olympic sites).

It is also possible to conceive of legacies which take the form of commitments to seek out new markets for the additional capacity (and workforce) which is necessary to meet the needs of the Games – for some companies, using the Olympics as a springboard to develop new markets may prove to be an excellent strategy.

The Games organisers are also aware of the specific legacy commitment to the geographical locality of the Olympic site, so it may be expected that those organisations able and willing to commit to providing legacy – in the way of jobs, infrastructure or another form – will give themselves an advantage which, however small or large, may be crucial to their hopes of winning business.

A Need to Collaborate

Alongside these considerations, a single, consistent theme runs throughout the supply Chain – the Olympics will require substantial co-operation and information sharing between the organising body and its offshoots on the one hand, and industry on the other. It is also necessary that such co-operation continues throughout the process, from initial contacts to delivering the legacy. Hence, collaboration – both with the Olympic authorities and with other parts of each organisation’s supply chain – will also be an important supporting factor to the considerations listed, and will enable their consolidation.

Let’s Get to Work

Those companies seeking to win opportunities to supply the 2012 Olympics and Paralympics will be faced by what they may, wrongly, perceive to be the usual types of Invitations to Tender and Requests for Proposals. In practice, however, the London 2012 organisers have made commitments to the IOC which mean they are obliged to incorporate security, sustainability and legacy as key selection criteria.

Some supply chain organisations aiming to engage with the Olympics may assume they can rapidly invent credible responses without actually performing the work or demonstrating the commitment to support their claims, and will thereby be destined to fail. Others will prepare strategies which will not only enable them to succeed in their bids, but will also provide them with a base for future development – to use their profits, exposure to new markets, new contacts and new potential markets to drive their businesses forward.

Organisations which review their entire supply chain, fully investigate their relationships with their partners and collaborators (including London 2012), and develop credible propositions in respect of security, sustainability and legacy, will not have any guarantees that they will be successful, but there is certainty that those which do not take such matters into consideration can be expected to fail.

The 2012 Olympics are an opportunity, but one which supply chain organisations will have to engage with on terms which include not only usual commercial considerations, but also considerations specific to the agreements that the London 2012 Olympics made with the IOC and the promises in support of those agreements.

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