The UK high street clothing market is both a challenging and dynamic industry, characterised by short product lifecycles and low predictability. A continual pressure for retailers to lower prices for the consumer has been associated with the increase in globalised sourcing. This has led to large and often very complex supply chains of which retailers are only often only aware of contracted 1st tier suppliers. This lack of visibility now is of major concern for many retailers due to increasing pressure from consumers for transparency and high levels of reputational risk, an issue growing in importance. Consumers are growing more concerned about the origin of their garments due to their increased awareness of ethical issues exposed by Western news channels. (North 2013; Mahmood 2013). However, with limited resources and the huge global complexity of these supply networks, new systems and processes must be found to enable this.
It is undeniable that consumers are beginning to care more about where their clothes come from and how they have been made. While this doesn’t apply to everyone, most consumers do want to make more informed decisions when selecting products. Just look at the annual success of Fashion Revolution Day which trends globally on Twitter and makes millions of people more aware of fashion transparency.
Whilst demand for this information is increasing, bar a handful of exceptions, the number of fashion brands and retailers sharing this information is not. “Even though the focal retailer may have little control over its suppliers’ unsustainable behaviour, consumers are still likely to attribute responsibility to the focal or lead firm.” (Elcio et al 2014:643) The problem is, it is simply too difficult to navigate what are often hugely complex supply networks.
A recent ‘Behind the Barcode’ report revealed 48% of brands hadn’t traced the factories where their garments were made, 75% didn’t know the provenance of their fabrics and 91% didn’t know where the raw materials came from.
Academic researcher Steve New suggests, “In many cases, firms are dealing with many thousands of first tier suppliers, and thousands of items being procured. In turn, each of these items may themselves have hundreds of components, with concomitant numbers of suppliers”.
As part of a dissertation for BA Fashion Management at the London College Fashion, I explored the issue of fashion supply chain transparency, and how technology platforms are being developed to overcome this. This research was conducted through interviews with technology firms, and ethical trading departments from UK high street retailers.
Interviews with various UK high street retailers, identified a lack of resources, lack of trust between the supplier and retailer and lack of engagement from senior management as the biggest barriers to full supply chain transparency. Retail is well known to be a cut-throat business where cutting costs is essential to the success in selling low priced clothing.
“Within the fashion retail industry, the marketplace is characterised by chronic downward price pressure, international sourcing, high product variety, high volatility and low predictability.” (Perry and Towers, 2013:478).
Therefore investing in tracing the supply chain is often seen as an unnecessary cost, resulting in a lack of head count needed to manually track the supply chain.
There are a handful of technology platforms that are developing tools to tackle these problems and enable businesses to trace supply chains more effectively. Interviews with these businesses show that transparency is based on the premise of mitigating reputational risk, therefore only top level information from each stage of a supply chain is needed.
A British based business found that in prototype investigations tracing every individual component, it was too difficult and not feasible on a large scale. Instead they suggest focusing on key risk areas, for example confirming cotton isn’t sourced from Uzbekistan is more realistic. Some retailers agreed with this perspective, where they said blanket level information was all that is required to identify risk areas and be transparent with their customers.
Other businesses, base a model on a social network system, where businesses can connect and share information. Jessi Baker from Provenance is taking this a step further through the development of a blockchain system, providing complete anonymity to the partners, and allowing for every stage in the supply chain to be connected.
Whilst these systems exist and are being developed, only the most innovative and forward thinking fashion brands are using them.
Retailers interviewed for this research showed that they all manually request suppliers for information and record this on systems as basic as Microsoft Excel. Retailers were identified as late adopters to these riskier technological investments.
Participants suggested that it would be up to brands that focused on narrower product ranges to push for transparency in fashion supply chains, which would then put pressure on retailers to do so too. This can be seen from brands like Toms who use New York based Sourcemap to show a products supply chain.
Whilst technology platforms have the capability of enabling traceable and transparent supply chains, it is foreseen that the adoption of this within the fashion industry will be slow. The main challenge will be educating and engaging retailers to understand that tracing fashion supply chains can be done in alternative ways.
Written by Callie Moir, a graduate of the London College of Fashion who is now exploring textile making groups in Central America.
Elcio, M. et al. (2014) “Towards a theory of multi-tier sustainable supply chains: a systematic literature review”, Supply Chain Management: An International Journal, Vol. 19 Iss.6 pp. 643 – 663.
Mahmood, S. (2013) ”Bangladesh factory fire puts renewed pressure on clothing firms.” Guardian [online]. Available At: http://www.theguardian.com/world/2013/may/09/bangladesh-factory-fire-clothing-firms. Last Accessed: 19 April.
North, A. (2013) “The dark underworld of Bangladesh’s clothes industry.” BBC [online] Available At: http://www.bbc.co.uk/news/world-asia-22306135. Last Accessed: 19 April.
Perry, P. Towers, N. (2013),”Conceptual framework development”, International Journal of Physical Distribution & Logistics Management, Vol. 43 Iss 5/6 pp. 478 – 501.