Green procurement and the idea ofsustainability is becoming a major factor in supply chain and morespecifically, procurement across industries. However, as the second mostpolluting industry worldwide citation, fast fashion is facing even morepressures to minimize environmental costs. In addition, they have some of the largestpresence in countries and factories known for unsustainable working conditionsand child labor. Fast fashion is a global and complex supply chain. The processof creating a garment comes with negative social and environmental.
Theindustry currently emits citation. These problems often stretch acrosssectors and get attention from corporation, the government, non-profitorganizations, and most importantly consumers. Regulations have already beenput in place and talks across countries continue to grow on firm responsibilityto reduce emissions and utilize fair labor practices. Also, consumers arebeginning to demand that firms partake in a green supply chain citation.On top of that, consumer demands have trended in the way of lower costs andlower lead times thile offering the “newest” possible trend to the customers citation.
To meet the pressures of minimizing costs, firms in the industry partner withglobal suppliers from lower cost companies often leveraging just-in-timesourcing. The lowered costs often come from unfair labor wages andmanufacturing processes that add to pollution. All of these complexities makeit increasingly difficult to manage a green supply chain.
Tomeet consumer demands and government regulations, companies must have their ownset of standards that drives environmental and social responsibility. Once theyhave established the importance of a green supply chain in their own culture,the relationship with suppliers becomes increasingly important. Ensuring thatsuppliers meet the quality and compliance regulations that firms desire, is thefirst step in maintaining an environmentally friendly supply chain that meetsthe demand side requirements for the firm. Vetting and continuous monitoring inthe procurement process must be maintained by firms to implement and sustainsupply side and demand side standards of a green supply chain something.
Ifthey are able to accomplish this, there will be overall positive results forconsumers, firms, and the environmental impact of the world.Methods Forthis paper, sources from UW Madison Library databases, primarily ABI/InformComplete (ProQuest) were used for research information. Outside databases suchas Multidisciplinary Digital Publishing Institute (MPDI) who publishespeer-reviewed, open access journals and ScienceDirect were also used. Finally, researchfrom other industrial reports and periodicals to were accessed to findadditional information.
DiscussionSustainabilityin Supply Researchhas already been conducted regarding sustainability issues in supply from manysources. One study conducted, citation, broke down supply side sustainabilityinto two circumstances that deepen the problem: social movements and governanceissues. Focusing on social movements, they involve journalists and non-profitorganizations exposing working conditions in fashion factories. This is themost visible actor in the supply chain. They document worker’s experiences insweatshops or child labor forces and publish them for consumers to see.
Socialmovements directly affect a brand image and reputation, ultimately affectingsales. This forces firms to invest more resources into the protection offactory workers. Other research conducted by citation, also backs this idea. Theydiscuss the problems with the globalization related to fast fashion offshoringto countries “composed of young, poorly educated people” because of the lowskill level required in the factories. Women and children are often themajority of the workforce in these developing countries.
Workers are forced toaccept low wages and sometimes are forced into labor. This makes workersextremely susceptible to discrimination, which if exposed, can have severelynegative consequences on a firm. Theother aspect of a green supply chain comes from environmental responsibility.There has been endless research on lowering emissions and pollution fromfactories. A study citation specifically talks about how brands arelooking to reduce chemicals used to produce textiles and the carbon emissionsthat come from the production of garments. Digging further into the issue isthe pesticides used in the creation of fabric and the use of natural resourcesto extradite, farm, process, manufacture, and ship a product from the rawmaterials all the way to the finished clothing item. With global warming on theforefront of political hot topics, firms are again, being forced to recognizedifferent solutions to maintain a green supply chain with much of the pressurescoming from consumers. Returningto the study discussed above, citation, the issue of governance of suppliers isa large detriment to firms.
The fast fashion supply chain is “globallystretched, complex, and fragmented” and relate to “geographical, cultural,political, legal, communicative, and other gaps” (citation). This makes it even morechallenging to monitor the continuous performance of suppliers all the wayupstream to the top of the supply chain. In addition, firms have continued tolack transparency in their supply chain.
Transparency can help stakeholders “holdcompanies accountable for sustainability performance and could imply…disclosingsustainability conditions at the suppliers by publishing factory audit reports”(citation).A study conducted by Egeles-Zanden and Hansson citation looked at the efforts ofNudie Jeans Company, a firm dedicated to sustainability performance, which hasbecome the most transparent company in the world. The study found that improvedtransparency makes consumers more willing to buy products even though they do notalways read the information disclosed. Just being more transparent andproviding the information, helps assure customers that you are usingsustainable practices. From other companies we seen both in and out of theindustry such as Walmart, are not always the most transparent with their supplychain because they are using unsustainable methods in their procurementstrategy. One of the most recognizable and memorable is the collapse of theBangladesh factory where Nike sourced a lot of their products from. Thiscollapse killed at least 200 people and exposed the previously opaque sourcingdecisions of Nike which forced them to be more conspicuous with consumers andfollow more sustainable practices.
However, firms can take more proactiveapproaches to upholding a green supply chain rather than trying to recoverafter the damage has been done by working on their procurement practices withtheir suppliers. SupplierSelection: Triple-Bottom-Line Approach After conducting research, it isobvious that integrating firm values with suppliers is key to ensuring thatfirms are able to maintain a green supply chain. However, this means that firmsmust first see that sustainability is embedded in their culture and businesspractices. Research supports that the triple-bottom-line approach is a provensuccessful method for sustainability within the firm and up and down its supplychain. Thetriple-bottom-line (TBL) approach refers to social, environmental, andfinancial factors of business and is often referred to as profit, people, andplanet or the 3Ps. The triple-bottom-line “captures the essence ofsustainability by measuring the impact of an organization’s activities on theworld, including both its profitability and shareholder values and its social,human and environmental capital” (citation). This means that the supply chain shouldbe viewed as a holistic and interdisciplinary concept that needs to beengrained in suppliers. Before selecting suppliers, fast fashion companiesshould evaluate and select suppliers based on their commitment to TBL approach.
Toachiever or maintain a sustainable supply chain, supplier selection becomesincreasingly important and firms should emphasis evaluation based on thetriple-bottom line approach. Citation breaks down the selection of suppliersusing TBL into three possible selection processes. The first is “Altruistic orbalanced” selection which means all of the segments of TBL are weighted equallywhen evaluating suppliers. The second is “Homo Economicus” which favors businessoperations, or profits, heavily over the other two categories. The finalcategory is “Antropocentric” with the objective of emphasizing increased focuson social responsibility.
Firms can obviously select which approach is best forthem depending on the nature of their business even if that means only focusingon one specific area of the triple-bottom-line. For example, non-profitorganizations would only care about the people and planet aspect of the 3Ps,completely ignoring profit while a for-profit company such as Nike would wantto use an Altruistic approach. Fast fashion firms need to focus on anAltruistic approach because of their visibility to consumers.
As stated above,consumers are demanding sustainability in supply chains through environmentaland social factors, but they are still businesses that need to remainprofitable and at a reasonable cost because consumers are also demanding trendsof lower costs. Evaluating suppliers using the TBL allows a proactive approachwhich saves firms money in the long run. Using a triple-bottom-line approachhas proven to be successful for fast fashion firms which will be discussedlater in the results section of the paper. Thehardest part of evaluating supplier commitment to TBL is how to measure it.There are a number of definitions on how to quantify and measure the TBLapproach both within and outside of supply chain. After looking into a numberof different measurement techniques such as life-cycle assessment based models,equilibrium models, and input-output analysis based models (citation),the multi-criteria decision making (MCDM) models made the most sense for fastfashion who need to look at all three pillars of the triple-bottom lineapproach. MCDM involves using both economic and environmental criteria.
Researchfrom citationgives many examples of cost and economic criteria. Economic criteria include:cost (product price, logistics cost, payment terms), quality (quality award,product performance, warranty), innovativeness (new launch of products andtechnologies), and relationship (length of relationship, reputation forintegrity, communication openness) as some examples. Environmental criteriainclude: pollution production (average air pollutants, waste water, harmfulmaterials released), resource consumption (consumption of resources in terms ofraw material, energy, and water), and staff environmental training). However, Ithink that another category for social criteria should be added which caninclude employee contracts, diversity numbers, number of health and safetyincidents, or employee compensation. Sources such as citation and citation give more possiblecriterion for evaluation. Once the firm has selected the criterion to evaluatesupplier’s on the triple-bottom line approach, they then must weigh thedifferent criterion. This is again, on a firm by firm basis.
They mustdetermine their values and how important their commitment to a sustainablesupply chain is relative to their company’s financial success. Whilethe triple-bottom-line approach is extremely beneficial to developingsustainable procurement practices, it is important to know some of the problemsthat are associated with TBL. One of the main criticismsis a topic that was already discussed. Measuring TBL is extremely complex. Thereare a lot of intangible factors in the 3Ps which makes it difficult to quantifyand compare against other quantifiable criteria.
There are also, as discussed,many different approaches to measuring TBL. This makes it difficult for firmsto decide on one model that is large enough in scope to evaluate everysupplier. While they may be able to choose different models, this wouldprobably be very timely and costly. Citation identifies two other criticisms totriple-bottom-line. The second criticism is closely tied to the firstcriticism. Because there are different approaches and definitions of TBL forsustainable procurement, it is difficult to measure the level of sustainabilityacross firms within the industry.
Consumers would struggle to compare how sustainablefirms are in their procurement process with suppliers because there is nostandard system to measure them based off. The final problem is that