Managing The Unmeasurable In Apparel Supply Chains

Apparel, Footwear, Fashion

Managing The Unmeasurable In Apparel Supply Chains

Traceability is the foundation of all sustainable supply chains, but apparel supply chains are far from traceable. It's time for apparel companies to create more visibility. There's an apt management quote that sheds some light here, but it often arrives as a misquote. The difference between the two is telling. The widely used misquote is: "You can't manage what you can't measure." What W. Edwards Deming actually said was, unsurprisingly, more complex, and it is more useful in the real world: "The most important figures that one needs for management are unknown or unknowable, but successful management must nevertheless take account of them." In vast, complex supply chains, there always will be unknowns. Certain dark corners, where horrors such as slavery and child labour exist, are difficult for individual companies to spot and measure. But no one can afford to dismiss these issues as things they "can't manage."

For their own bottom lines, as well as for ethical reasons, account must be taken. Companies must manage what they can't measure. Recently, BSR worked with C&A Foundation, in partnership with the UN Global Compact, to assess the prospect of creating truly traceable apparel supply chains. At the core of the project is the idea that by collectively creating more visibility, the whole sector will gain a more lucid view of where and how resources should be directed. Attention and management then will be more focused on truly critical areas and less bound by what individual companies happen to be able to measure within their own supply chains at a given moment. Systemic issues warrant systemic, collective solutions.

The project assessment asked three central questions:

1. What points of apparel supply chains are currently traceable?

2. Do real technology solutions exist that can support & drive traceability?

3. Where are the best areas for the industry to work together to create traceability?

To answer these questions, the project partners mapped apparel supply chains, conducted a landscape analysis of apparel sector traceability efforts and conducted a detailed assessment of 25 traceability software solutions providers. The process included interviews with nearly 30 global apparel brands and supply chain partners. This is what the findings were.

Seeking scale

Traceability remains a developing issue for the industry. Buds of ideas are all around, addressing various materials and processes, but apparel traceability is not yet scaled. Patagonia's Traceable Down is an example of an individual company's pioneering action, while the Better Cotton Initiative's Chain of Custody demonstrates an industry approach to driving traceability. These bright spots are real but rare. Good technology solutions exist. The project identified five software providers that seem well positioned to meet the industry's functional and technical requirements for traceability: AmberRoad; ChainPoint; GT Nexus; SourceTrace; and TraceTracker. Other effective providers may be out there, but after detailed assessment, these five providers currently offer the apparel sector the most relevant and proven services.

While individual company actions may create windows, collective action could force walls to come crumbling down. The project identified four opportunities for the apparel sector to collectively drive traceability: harmonising efforts in cotton; developing traceable viscose; creating visibility in outsourcing and sub-contracting; and mapping homeworkers. BSR is talking to interested brands to verify that these opportunities resonate with their needs and to discover if there are other good ideas that should be pursued. To create traceable supply chains, we must search rigorously for knowns while embracing realistically certain unknowns, moving ever forward, illuminating all possible areas and managing at once the measurable and the unmeasurable.

Opportunities to advance traceability

BSR identified the following recommendations for possible collaborative projects to create more traceability in the apparel supply chain, and the C&A Foundation would like to talk to apparel brands about what projects would it make sense for C&A Foundation to drive or support. In all cases, the objective is to include and support existing collaborative initiatives as much as possible.

Opportunities Focused on Materials:

1. Cotton Traceability: There is a lot of work being done to advance the traceability of cotton, arguably the most important natural raw material for the industry, rife with sustainability challenges. C&A Foundation would like to explore further scaling the traceability efforts related to cotton, for example, 1) scaling the Better Cotton Initiative traceability programme, and/ or 2) providing a traceability tool to the Organic Cotton Accelerator.

2. Viscose Traceability: The C&A Foundation believes there is a strong opportunity to create a traceability prototype for tracing viscose fabric to raw materials to tackle deforestation and achieve various business benefits.

Opportunities Focused on Subcontracting and Decentralised Production:

1. Garment Production Subcontracting: There are numerous existing sustainability initiatives looking to address labour rights issues linked to garment production and particularly subcontracting. This opportunity would involve bringing the traceability solution to this challenge, enabling visibility of the chain of subcontractors in the supply chain in specific geographies.

2. Homeworkers: This project would be an effort to map the global supply chain for decentralised homeworking production. While not a traceability tool prototype, this kind of a mapping exercise would be extremely valuable to the market.

Collaboration to improve traceability in apparel supply chains is expected to bring forth a range of benefits including: security of supply; reduced lead time; better capacity to minimise risks; lower production costs; productivity gains; quality improvements; regulatory compliance; verification of sustainability claims; brand reputation; and higher consumer demand. The partners are seeking the participation of apparel companies and other interested stakeholders in the traceability solution.