Sustainability and the fashion supply chain: a symbiotic relationship?
An explorative multiple case study research
Name
Emma Pennings
Student number
10756213
Programme
BSc Future Planet Studies
Specialization
Business Administration
Supervisor
dr. W. Dorresteijn
Date
June 2017
Statement of originality
This document is written by Student Emma Pennings who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original
and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of
completion of the work, not for the contents.
Table of Contents
1. Introduction
5
2. Literature study
2.1 Sustainability
7
2.2 Sustainable supply chain management
7
2.3 Sustainability in the fashion supply chain
7
2.4 Sustainable supply chain management in the fashion industry
8
3. Conceptual model
10
4. Methodology
4.1 Case selection
11
4.2 Data collection
12
4.3 Construct of codes and data analysis
12
5. Results
5.1 Sustainable drivers
13
5.2 Sustainable practices
16
5.3 Environmental performance
20
6. Discussion
6.1 Research question
24
6.2 Implications
25
6.3 Limitations
27
6.4 Future research
27
7. Conclusion
29
8. References
31
9. Appendices
34
Abstract
Supply chains in the fashion industry are well-‐known for its high environmental impact, complexity and non-‐transparency due to subcontracting of production processes. However, several studies indicated that sustainable supply chains provide business opportunities in product innovation and have the potential to become a competitive advantage. This research will investigate what sustainable practices are performed in Dutch SMEs in the fashion industry when considering the entire supply chain. A multiple case study through empirical research is conducted through in-‐depth interviews. The study is divided into three sub questions to answer the research question and their main variables are: drivers, sustainable practices and environmental performance. Company values and market requirements appeared as major drivers and product design (organic fabrics) and supply chain design (selection of suppliers) as major sustainable practices. It appeared that the SMEs didn’t introduced a performance management system yet, but the research indicated their green processes as performance indicators.
Key words: supply chain management, sustainability, fashion industry, multiple case study.
1. Introduction
Since Brundtland’s report in 1987, sustainable development and sustainability have gradually been integrated in governmental policy and corporate strategy. This was defined as ‘’a development that meets the needs of the present without comprising the opportunities of future generations to meet their needs’’. In recent years, sustainability has become a key player in planning and management across supply chains and organizations have recognized the importance of their supply chain in managing the environment (Golicic & Smith, 2013; Urban & Naidoo, 2012; Vachon & Mao, 2008). Sustainability is conceptualized in academic literature and consists of three main pillars: environment, social and economic elements that together form the ‘’triple bottom line’’. The triple bottom line shows the challenge in achieving a balance between environmental and business needs in realizing sustainability (Schrettle et al. 2011).
Industries with significant environmental impact experience high pressure regarding sustainability issues (Seuring et al. 2008). As shown in some recent scandals in the fashion industry, such as C&A, H&M and Nike, companies are held responsible for the environmental impact of their suppliers and partners’ practices within the whole supply chain (Pedersen, 2009; Caniato et al. 2012). Supply chains in the fashion industry have very high environmental impact and are complex and non-‐transparent due to subcontracting of production processes to different companies scattered around the world (De Brito et al. 2008). The production activities make intensive use of chemical products and cause a high environmental impact (De Brito et al. 2008). Today’s apparel consumers expect constant change for new products on a frequent basis. This leads to pressure on the apparel retailers to achieve lower costs and shorter manufacturing time, resulting in negative environmental and social impact on the fashion supply chain (Koksal et al. 2017).
This paper examines the sustainable supply chain management (SSCM) of small-‐ medium enterprises (SMEs) in the Netherlands instead of the multinational enterprise. Little has been said about small-‐ and medium-‐ enterprise management of sustainability in the supply chain (Ahi & Searcy, 2015; Mitra & Datta, 2014). Although, of all Dutch companies, 99% is in the SME category and contribute immensely to employment creation and economic growth (CBS, 2015; Cant & Wiid, 2013). In this research, different perspectives within the supply chain are investigated to give a better overview of Dutch SMEs and findings can be applied over a broader range of companies.
This thesis aims to further research the SSCM concept in the fashion industry and how it affects the environmental performance of Dutch SMEs by acknowledging key sustainable drivers and practices. Supply chain management (SCM) attends two critical purposes, serving the business needs in being competitive and acknowledge the environmental commitments (Caniato et al. 2012). In the context of supply chains in the fashion industry, few studies have analysed the relevance of SCM in pursuing environmental sustainability (Mafini & Muposhi, 2017). Apart from the operational advantages concerned with SCR, sustainable supply chains provide business opportunities in product innovation and eco-‐preneurship (Kirkwoord & Walton, 2010; Mohanty & Prakash, 2014). This paper tries to fill this gap through a multiple case study by analysing how different SMEs perform in their sustainable supply chain. The research question is: What are the sustainable practices in supply chain management in Dutch SMEs in the fashion industry and how does this excel in their environmental performance? Multiple Dutch SMEs are interviewed to discover their main practices and environmental performance in selling sustainable products to end consumers.
The contribution of this research is to give a better insight in how Dutch SMEs tackle environmental sustainability issues in the fashion supply chain and how this excels in their performance. To answer the research question three sub questions are established. First, what are the main drivers towards the adoption of sustainable practices? Second, what practices in the supply chain are used to improve environmental sustainability? Third, how do the sustainable activities in the supply chain contribute to environmental performance?
The paper is organized as follows: in section two a literature review on sustainable supply chain management in the fashion industry allows the identification of existing theories. On this basis, a conceptual model was developed. The model was tested in an empirical study, whereas the results of the analyses are discussed in section five. Finally, the discussion and conclusions are presented in the last section.
2. Literature review
The literature study presents the main findings in academic literature to give an overview of former research about this subject. It presents some definitions and exhibits the subject from a broad perspective to more specific perspective.
2.1 Sustainability
The concept of sustainability was outlined in 1987 in Brundtland’s report and mainly determined by the context of natural resources and their effect on life (Robinson, 2004). Current conceptualizations of sustainability identify the connection between three principles: social equity, economic growth and environmental importance (Bansal & Roth, 2000). These principles correspond with the idea of the ‘’triple bottom line’’, which claims that business performance should be examined by the social, economic and environmental perspectives (Schrettle et al. 2011). To practice sustainability issues, companies must integrate a long-‐term perspective and combine economic growth with social progress and the conservation of the environment (Lamming & Hampson, 1996). This paper focuses on sustainability in supply chains, therefore the next section will explain the contribution of supply chain management in the improvement of environmental sustainability.
2.2 Sustainable supply chain management
In recent decades, there has been a lot of research on the concept of supply chain management (SCM). Mentzer et al (2001) defines SCM as ‘’the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-‐term performance of the individual companies and the supply chain as a whole’’. In sustainable supply chain management (SSCM) environmental and social issues need to be accomplished by the partners of the supply chain, while the competiveness is maintained through meeting customer needs (Seuring & Muller, 2008). Trust and cooperation between supply chain partners can create strong cooperative systems which fully exploit the capabilities of the entire supply chain and lead to competitive advantage by sharing information to quickly adapt to marketplace changes and meet the consumers’ needs (Perry & Towers, 2013; Kumar, 1996).
2.3 Sustainability in the fashion supply chain
Developments in the consumer lifestyle next to the demand for trendy products have put pressure on the today’s supply chains, since apparel consumers expect constant response to changing trends (Koksal et al., 2017). Therefore, it is contradictory that the apparel trends change frequently, while
sustainability is related to a long-‐term perspective (Gardetti, 2013). Characteristically, the fashion supply chain involves many partners and is relatively long and non-‐transparent (Koksal et al., 2017). The use of energy, water, and chemicals in the production process and the waste and pollution in the transport processes of textile and garments, have major negative impact on the environment (Koksal et al. 2017; Caniato, 2012). Moreover, the unacceptable working conditions, safety issues in factories and low minimum wages are social issues as present as environmental concerns (Freise & Seuring, 2015). But, beside the contradiction, fashion shouldn’t go in conflict with sustainability principles. It can become a role in marketing and realization of sustainability and even a key element in working towards sustainable behaviour (Gardetti, 2013).
In recent years, consumer’s preferences have become increasingly complex, including expectations that go beyond quality, style and price (Borland, 2004). Recent trends show that sustainability is a facilitator to reach the conscious consumer and to improve the overall brand image (Faisal, 2010). These entrepreneurs can reach a new market segment in the fashion industry, several studies have investigated the potential of sustainable fashion as a competitive advantage and show that the majority is very interested in ethical consumption (Forman & Jorgesen, 2004). However, there is a joint thought that sustainable supply chains require high economic input (Ondernemerschapboeken, 2016).
According to Beard (2008), the complex and extended nature of the fashion supply chain increases the lack of transparency. Therefore, the implementation of sustainable practices in the supply chain become inevitable exercises for apparel companies, particularly when taking the unfavourable publicity in mind (De Brito, 2008). Better cooperation, collaboration and coordination may overcome the high presence of uncertainty in fashion supply chains. Closer trading relationships are necessary to maximize the effectiveness of the supply chain (Perry & Towers, 2013).
2.4 Sustainable supply chain management in the fashion industry
Seuring & Muller (2008) stated that, when addressing sustainability issues, it is important to not only consider companies but also the supply chain wherein they belong. Therefore, this thesis considers the fashion supply chain from end to end to gain an overview and then focuses on the sustainable supply chain with the main drivers, practices and firm performance.
The adoption of a supply chain perspective on the fashion industry, from raw materials to the end consumer is not a new idea, Sen (2008) identified the supply chain phases in the fashion industry (figure 1). At the top of the chain is the fiber production of raw materials (e.g. cotton, leather and wool) with agricultural or chemical practices. The second stage is the transformation from the raw materials into fabrics. These production processes are regularly sources from distant locations, since companies
in the fashion industry rely on their partners to make their production more efficient (Caniato et al. 2012). This is done by subcontracting parts of the production process. The third phase is the production of garments in plants. In the last stage, retailers (sometimes through wholesalers) offer the garments to the consumer (Sen, 2008).
Literature shows that it is important for organizations to manage their supply chain for sustainability, since companies are held responsible for the environmental performance of their partners and suppliers (Pedersen, 2009). Vachon & Klassen (2008) further underline the importance of cooperation with all partners towards environmental sustainability and the necessity for managers to reflect sustainability through the supply chain. The three variables; drivers, practices and performance, are identified to investigate the sustainable supply chain management (SSCM) of Dutch SMEs in the fashion industry. Gimenez & Tachizawa (2012) recommend to distinguish the sustainable supply chain into drivers and practices. Drivers are motivating factors in implementing SSCM practices and practices can realize implementing SSCM.
Sustainability drivers can be classified in two main groups, revised from the straightforward Porter’s view and the categorization offered by Golini et al. (2016) and Schrettle et al. (2014). The exogenous (external) drivers consist of environmental regulation (current as well as future law) (Sharma & Henriques, 2005; Etzion, 2007), market requirements (consumer demand and retailer pressure) (Carter & Dresner, 2001) and societal values and norms (e.g. NGOs, media, local community groups, consumer organisations) (Bansal & Roth, 2000). The endogenous (internal) drivers involve efficiency objectives (i.e. cost reduction) (Handfield et al. 1997) and values of the company/owner (Caniato et al. 2012).
These sustainable drivers can be translated into practice. According to Ellram et al. (2007) and Caniato et al. (2012) the 3DCE framework from Fine (1998) is suitable for studying sustainability issues, therefore three environmental practices are used as indicators of environmental sustainability. First product design embraces the features of products, such as the use of ecological friendly materials and sustainable packaging. Second, process design incorporates the production processes, such as the reduction of waste or emissions. Third, supply chain design includes the reduction of environmental impact outside their boundaries, such as supplier evaluation.
The final variable that is researched is environmental performance and how this affected by supply chain management practices. Mitra & Datta (2014) mentioned that sustainable practices enhance the corporate image of the firm. De Brito (2008) stated that ‘’well-‐performing companies are those who effectively manage internal and external relationships through improved coordination’’. Environmental performance can be measured by identifying the environmental performance indicators (EPI) to monitor the firm’s environmental impact (Tsoulfas & Pappis, 2008). Until recently,
KPIs are used to measure financial performance, efficiency, innovation, customer satisfaction and quality. Nevertheless, with the growing awareness of environmental and sustainability issues, companies are recognizing the importance of enhanced environmental (and social) performance (Lamberton, 2000). Almost all previous studies have found positive relationships between sustainable practices and environmental performance (Mitra & Datta, 2014). The indicators cover all internal, inbound and outbound supply chain practices; materials, packaging, energy, water, emissions, products and services, transport, collaboration with suppliers and business integration (Tsoulfas & Pappis, 2008; Caniato, 2012).
3. Conceptual model
To guide managers in the fashion industry, I derive a conceptual model (appendix 3) from the supply chain literature and the literature on small-‐ medium-‐ enterprises. Following an in-‐depth analysis of the scientific literature, the different elements of the model have been specified, as shown in figure 1. The model presents the three variables: drivers, practices and performance and the relationships between drivers practices and between practices and performance to support companies to classify the most suitable practices given their drivers and estimated performance.
I inspired this conceptual model on the framework outlined by Caniato (2012). I included the phases of the supply chain in the fashion industry to gain an overview of the chain wherein the case studies belong. Caniato (2012) adapted its drivers from the classification presented by De Brito et al. (2008). The classification presented by Golini et al. (2016) and Schrettle et al. (2014) seemed more appropriate since law can’t be considered as a relevant driver but should be considered, therefore by attributing it to the exogenous drivers seemed more suitable. Caniato (2012) additionally included the relationship between performance and drivers but since the research question indicates, the ‘’end-‐ station’’ of this study is the environmental performance. Consequently, making it a closed loop is not appropriate for this research.
4. Methodology
The nature of the study is exploratory as the study aims to contribute to academic sustainability literature in the fashion supply chain in Dutch SMEs. In this study, qualitative research is based on a form of argument called abduction, a combination of induction and deduction. Partly induction since multiple Dutch SMEs were observed to discover patterns that can point to theory, and partly deduction as a theoretical framework was composed. A well-‐substantiated and well-‐defined method for performing this research increases the validity, the extent to which an investigation measures what it should measure and the reliability, the degree to which a test is free of measurement errors (Boeije, 2010; Walliman, 2011).
The empirical research is based on a multiple case study approach to contain more in depth information and reduce biases of using one company. Specifically, qualitative research is conducted in order to investigate how Dutch SMEs manage environmental sustainability in the supply chain and how this influences their performance. This section connects the research question with the collected empirical data and the conclusion (Yin, 1994). The fashion industry is an appropriate research setting, since the fashion industry has been criticized for decades about their unsustainable conduct that negatively impacts the environment. To address these concerns some fashion companies are developing sustainable products and business practices, but a large part is still behind in this area (Han, Seo & Ko, 2017).
4.1 Case selection
Cases have been selected that are suitable to understand relationships among theories and are a representative sample of different types of companies within the fashion industry (Eisenhardt, 1989). Therefore, there is chosen to select companies on the base of purposive sampling. A heterogeneous sample of Dutch small-‐medium enterprises (SMEs) was chosen and presented in table 1, to explore different approaches to sustainability drivers and the adopted sustainable practices. The sample includes five anonymous Dutch SMEs that have identified environmental sustainability as their key element for competition and survival in the market. They were selected through the website of MVO (Maatschappelijk Verantwoord Ondernemen Nederland) and events linked to green fashion issues. The sample incorporates five companies that have various roles inside the supply chain and represent different ways of implementing sustainability in the supply chain.
4.2 Data collection
The information is obtained through in-‐depth interviews and supplemented with literature study, because few primary data were available. A semi-‐structured interview was developed to collect data
presented in appendix 1. Identical questions were asked to all companies, but in a flexible way to give interview subjects the possibility to freely describe their company. All the questions are formulated to start a discussion and get a complete overview of the reasoning behind actions the firm takes.
4.3 Construct of codes and data analysis
The data collection followed in a rich data set, whereby each case is summarized in appendix 2. To answer the research question, the data is redeployed from shapeless data towards theoretical understanding that is not at the expense of richness, dynamism and complexity of the data but improves the understandability and usefulness for others (Langley, 1999).
Given the exploratory nature of the research, the data is translated with cross-‐case analysis into conceptual labels to group concepts to the same phenomenon to form categories. Therefore, the data needs to be sorted by different codes. First, the data is coded by open coding of fragments that may be important for the research. The second step is axial coding for subcategories and the third step is selective coding to extract the most important codes for the ultimate selection. The combination of induction and deduction is used to obtain useful sentizing concepts from literature and further extend them to answer the research question. During the coding process, I assume the coding paradigm based on emerging: a theory that assumes that interaction between the data and the researcher results in applicable theories.
The data is aggregated into four main groups according to the conceptual model; the company profiles, sustainable drivers, sustainable practices and environmental performance. It is important to outline the company profiles to define the supply chain wherein they belong and to check the relation between the background of the company and their level of sustainability in the discussion section. The categories were further subtracted into subcategories. The first category, company profiles, was divided into product, number of employees and company type. The second category, sustainable drivers, was divided into exogenous and endogenous drivers. The third category, sustainable practices, was divided into product, process and supply chain design. The last category, environmental performance, was divided into product/process design and production, packaging, transport, business integration and collaboration with suppliers.
Table 1: The company profiles
Product Employees Type
Company 1 (C1) Dresses, jewelry and accessories 1-‐25 Manufacturer, label and retailer
Company 2 (C2) Bags 1-‐25 Manufacturer, label and retailer
Company 3 (C3) Casual clothing > 25 Manufacturer, label and retailer
Company 4 (C4) Company 5 (C5) Casual clothing Shoes 1-‐25 > 25 Fashion platform
5. Results
This chapter represents the findings that are acquired from the empirical data analysis. Based on the codes, certain patterns can be described to answer the research question. First, the within case analysis describes the results of each case as independent research studies and secondly the combination with cross-‐case analysis enables to identify the main drivers and practices that account for the adoption of sustainable supply chain management.
The analysis first describes the sustainable drivers of the selected cases. The analysis is based on the codes derived from the conceptual framework from Golini et al. (2016) and Schrettle et al. (2014). Secondly, the sustainable practices of each individual case are described according to the analysis of the 3DCE framework from Ellram et al. (2007) and Caniato et al. (2012). Thirdly, the environmental sustainability performance is analysed based on the environmental performance indicators from Tsoulfas and Pappis (2008).
5.1 Sustainable drivers
The multiple case studies indicate the importance of the sustainable drivers recognized in the literature review. Table 2 summarizes the main findings acquired from the empirical research. The first code analysed are the endogenous drivers, which refers to the internal forces that motivate to implement sustainable supply chain practices. The second analysed code are the exogenous drivers, which refer the external motivators in implementing sustainable supply chain practices.
Considering the endogenous drivers, company one doesn’t want to be a part of the bad working conditions, extreme water use and waste in the factories that have a big impact on the environment. The company stated that the corporate sustainable values of the owner, but also welfare of the employees, are the major drivers towards the sustainable company.
When considering the exogenous drivers, the media made the founder of the company aware of the fast-‐consuming clothing industry. ‘’Ik ben me bewust geworden door de ramp van Plaza, die ik in het nieuws voorbij zag komen, waarbij een groot naaiatelier was ingestort waar mensen aan het werk waren die onderbetaalt werden. Hier werd kleding van fabrikanten zoals Primark en andere grote ketens geproduceerd, waarbij die mensen geen leven hebben. Toen kwam het besef dat ik hier eigenlijk ook gewoon verantwoordelijk voor ben’’ (C1). The company discovered that there is a big demand for sustainable clothing and there is the possibility to reach a niche market. ‘’Door mijn bewustwording over de fast consuming in de kledingindustrie ben ik begonnen met het kopen van duurzame kleding,
maar kwam erachter dat het aanbod daar gewoon niet zo groot was. Hier zag ik de kans om mijn eigen kledinglijn te starten’’ (C1).
The founder of company two lived in India for a while and experienced the enormous waste on the streets of India, and felt triggered to do something about this. Therefore, the corporate values of the owner are the major driver towards sustainable practices. Besides this, the company wants to contribute to the creation of employment opportunities in Indore, India, and create a safe workplace for the employees and offer them an appropriate salary. ‘’Ik ben dit bedrijf begonnen vanuit de drive om iets te doen aan de afvalberg, ik werd toen ik in India woonde enorm getriggerd door de enorme berg zooi die er op straat lag om hier mooie producten van te maken’’ (C2). The company made also clear that their product could reach a niche market because their product was unique with a unique story. ‘’Ik was zelf zo enthousiast toen ik dit product tegen kwam dat ik gelijk dacht dit vinden heel veel mensen leuk omdat er zo’n uniek verhaal achter de tassen zit’’ (C2).
The main driver of company three is an exogenous driver, which implies the responding to the demand of the market. She experienced the difficult search for basic, high quality clothes, and decided to fill in this gap by establishing her own clothing brand. Furthermore, the founder of the company stated on her website: ‘’Groen ondernemen is vanzelfsprekend voor mij, ik ben van huis uit politicologe en leef bewust. Dus begon de zoektocht naar ateliers waar oog is voor arbeidsomstandigheden en waar de mensen een eerlijk salaris verdienen. De materialen moesten duurzaam zijn. De textielindustrie is enorm vervuilend en daar wil ik met mijn bedrijf niet aan mee doen’’ (C3). This implies that the corporate sustainable values of the owner and employee welfare are important sustainable drivers. The founders of company four experienced, when looking for sustainable clothing, there was enough supply, but spread over the internet over many small web shops. Therefore, the founders of the company came up with the idea to collect all clothing available in the Netherlands on one web shop. This indicates the drive from values of the owners, but also the respond to the demand of the market. ‘’Het voelde voor ons heel oneerlijk dat wij het hier zo goed hebben, maar je kan verschil maken met je aankopen en wij kunnen dat voor andere mensen makkelijker kunnen maken’’ (C4).
Company five perceives sustainability and social involvement as a matter of course. Besides that, they recognize sustainability on their website as their competitive advantage in today’s market. ‘’Duurzaamheid is de reden dat wij, ondanks de crisis en oorlogen, nog bestaan’’ (C5). In the long run, you won’t succeed when you scratch the quality, so high quality is for them of explicit importance. They changed their business model to reorganize their entire supply chain from begin to end to implement sustainability. Values of the company and market requirements appear to be the main drivers for sustainability.
Table 2: Drivers for sustainable practices
Exogenous Endogenous
Company 1 Market requirements & media Company values
Company 2 Market requirements Company values
Company 3 Market requirements Company values
Company 4 Company 5
Market requirements & media Market requirements
Company values Company values
The data reveals that, considering internal drivers, all cases highlighted the company values as the major contributor to sustainable objectives. Company values include the corporate values of the owner and employee welfare. Corporate values of the owner are identified as the commitment of the owner towards sustainability issues and employee welfare include good working situations like fair salary and a safe workplace. Companies two and four and five have production processes outside the Netherlands but regularly visit the factories and monitor the working conditions of the employees, especially for company two was the major driver to increase the employment opportunity in the manufacturing area. Company one has their production processes inside the Netherlands which has a dual objective to maintain control about the production circumstances and to reduce distribution costs and environmental impact. The companies assign the owner’s norms and values as the propelling factor of the establishment of the company with its sustainable approach. Company three has an exogenous driver as their major motivation, namely the requirements of the market. Company five also seems to have market requirements as the major factor to reorganize their supply chain. Efficiency objectives like the reduction of costs didn’t seem to be an endogenous driver for all companies.
In relation to the exogenous drivers, the requirements of a new market niche appeared to be a significant factor at all companies in the sample, but is consequence of their own drive to make sustainable choices regarding clothing and enable this for other customers. The market pressure can be seen as the companies’ competitive advantage to survive in the market (C5; Forman & Jorgesen, 2004). The target group are people with a strong green focus, that are interested in sustainable clothing, instead of the regular clothes in the retail sector. Company one and four indicated the impact societal values and norms, especially from the media. Media platforms can have major influence on the creation of awareness about (the absence of) green performance in the clothing industry. Additionally, environmental regulation from the authorities is not a relevant driver for all companies, the low boundaries set by the government have no effect on practicing green performance. Dutch stimulus policy in the fashion industry for sustainable entrepreneurship is not being conducted by the government. According to the data, this is mainly due to the non-‐transparency of the garment industry.
5.2 Sustainable practices
According to the data, not all companies exercise the same practices, but as the sustainable drivers explain, are all aware of the non-‐sustainable environment that prevails around the fashion industry. Table 3 demonstrates the main practices of the five case studies that are derived from the sustainable drivers. The sustainable practices are divided into three subcategories/codes according to the Three Dimensioning Concurrent Engineering (3DCE) framework (Ellram, 2007; Caniato, 2012). The first code analyzed the sustainable product design of the companies, which involves all sustainable features towards the product and packaging. The second code analysed the sustainable process design of all companies, which refers to the production process from raw materials to the finished product. The third code encompasses the way companies try to reduce the environmental impact outside their boundaries.
Company one makes for its product design use of organic textile that is GOTS certified, which states requirements for factories concerning the use of harmful chemicals. The products are packed in recycled cardboard and ecobags, made from recycled plastic. The company has a partnership with a Dutch clothing factory, where they produce the clothing in limited amounts. Making from each product a limited edition, there is more certainty that all clothing items can be sold to reduce the waste. Since the clothes are made in an extern factory, no renewable energy is used during the production, but the energy consumption is a main point on their agenda and will be improved in the future. During the production process, the clothing factory uses a minimum amount of fabric to reduce the waste. The suppliers of the fabrics are selected on the environmental GOTS certifications and are situated in Turkey and Germany. The GOTS certification sets sustainable requirements for the manufacturing of the clothing concerning the environment and work conditions of the employees. The transport of the fabrics is relatively short when comparing to the regular production in the far East. The products are manufactured in the Netherlands, and therefore, due to the local production network, the supply chain is relatively short so there is maximum control and there are minimum shipping costs involved from other countries. The packages are shipped to the Dutch customers through the regular shipping method from PostNL, but the owner of the company wants to make the shipping to the customer more sustainable in the future.
The second company uses recycled materials for their product design. The raw material is tire, supplied by the locals to reduce the waste, and is a good alternative for leather since products that are made from leather are often accompanied with terrible circumstances for animals. All products are packed in recycled cardboard without any usage of plastic. During the production process, there is no use of any chemicals. The process is designed and being done by manual work through local
inhabitants, which limits the energy consumption and additionally make use of natural air conditioning. The selection of the supplier from India was based on the mutual sustainable drive to reduce the waste in India and create employment opportunities. The supplier has an Indian certificate that his production is handicraft approved. The company regularly visits to India to check the manufacturing process and has contact with them on a daily basis. The work conditions of the employees are essential for the company; no exploitation of the workers, no overtime working and a good reward. For the future, they want to obligate a certificate that verifies their excellent working conditions, but is not financial reliable in the present day.
Company three makes for its product design use of organic cotton, organic wool, Tencel and durable wool that are GOTS certified. The GOTS certification indicates that minimum chemicals are used in the product design. Additionally, to sustainable product design activities, the packages of the products are made from sustainable materials. The clothes are produced in European and Indian factories with fair working conditions, a GOTS certificate and a SA800 standard. The SA800 is a social standard for a decent working environment in the industrial sector and is also based on the standards of the International Labor Organization. The selection of the factories is a secure process. They must be GOTS certified and work with organic products. The rinse water resulting from the dying process is purified in the factories and reintroduced into the production process. The wastewater of all process is also incorporated into a functional wastewater treatment plant. To minimize the CO2 emissions, the production process is as close as possible. Currently, they produce in India and Turkey. Their code of conduct is based on the GOTS and SA800 certificates, which provide basic rights for their suppliers such as: no children’s work, no discrimination, secure and hygiene workplace and no slavery. The clothing from Turkey are transported to the Netherlands per lorry to reduce CO2 emissions. They delivery of the packages, packaged in sustainable materials, are transported CO2 neutral with PostNL. In addition, they consider the carriers route to make it as efficient as possible and train the drivers to do this.
Company four is an exceptional case, since they don’t produce their own fashion but sell sustainable brands on their web shop. The company selects brands on the use of materials (product design) and how they are produced (process design), but also on their supervision on the external design (supply chain design). If a brand claims to be very sustainable, they will investigate this on the basis of their transparency and certified quality marks (Ethical trading initiative, Global organic textile standard, Oeko-‐tex, fair wear foundation, fair trade international, SA8000, world fair trade organization, soil association, B corp, better cotton initiative, PETA-‐approved, textile exchange, WRAP), but also on labels that they attribute to brands: local production, vegan, environmentally
friendly, fair trade and local support. They attribute labels to brands because there are a lot of small brands that can’t afford to get a quality mark but operates very sustainable
Company five uses both chrome tanned and vegetable tanned leather for its product design. The origin from the leather is a waste product from the meat industry and they don’t use exotic animal skins, since they are in most of the times bred and slaughtered for the leather industry. The company also only processes imitation coat and fur. The leather complies with the European ‘’Chrome VI’’ standard. The company continuously optimizes their process design. New technologies that make it possible to produce or reside more environmental friendly have continuous attention. Glue and edge paint are all on water-‐based and therefore free from solvents and chemicals. They reduce the energy consumption by insulating the factory with an extra roof layer. Every employee has an individual, ergonomic workplace instruction set by ‘’arbo-‐arts’’. Each production site and supplier, in-‐country and abroad, sign the Code of Conduct. This Code of Conduct states the requirements that the supplier must comply with, the subjects include: child labour, working conditions and wages and the environmental conditions.
Table 3: Sustainable practices
Product Process Supply chain
Company 1 Low chemical substances, organic
fabrics, recycled packaging Reduce of waste Short supply chain, environmental certifications of suppliers, local production network, direct control
Company 2 Recycled materials through local
suppliers, sustainable packaging No use of chemicals, low energy consumption
Supplier selection on green practices, green projects with suppliers, direct control, local production network, environmental certifications
Company 3 Low chemical substances, organic
fabrics, sustainable packaging Low use of chemicals Environmental certifications of suppliers, code of conduct, direct control, transport optimization
Company 4
Organic fabrics, sustainable packaging, low chemical substances
Sustainable processes
Local production network, environmental certifications
Company 5 Natural raw materials, low
chemical substances, recycled packaging
Low energy consumption, free from solvents
Environmental certifications of suppliers, local production network, direct control, code of conduct
Sustainable supply chain related practices are activities that are implemented by the companies which had a positive impact on sustainability related subjects. In all cases, product design practices are a major component in the sustainable direction the companies follow. Specifically, the companies design their products by implementing sustainable options from the beginning of the design process, using organic fabrics, recycled materials and low chemical substances and making the packaging from sustainable and recycled materials. For example: company two uses old tires found on the streets of