5 Ways Fashion Companies Can Build a Sustainable Supply Chain

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5 Ways Fashion Companies Can Build a Sustainable Supply Chain

Virginia Bingol

Content Specialist
440 Industries

Introduction

In today’s society, consumers want the latest thing as quickly and conveniently as possible with little exceptions. This is true across all industries, whether it be technology, automobiles, or food. However, this obsession with having a trendy product before its gone is particularly prominent in the fashion industry. With fleeting content cluttering social media, trending products go out of style as quickly as they go in.

What is Fast Fashion?

Advances in technology and this groupthink mindset have allowed fast fashion companies (such as Zara, H&M and Primark, just to name a few) to dominate the fashion industry. Zara has created a particularly fascinating business model centered around a wildly efficient supply chain, giving it the ability to produce 20 collections per year, whereas most companies produce just one for each season on average.

Zara is a vertically integrated company, meaning it does not outsource its production and is responsible for its own manufacturing. If a product in one of their many lines sells out, Zara will not restock in in hopes to keep production moving for the next collection. Fast fashion companies also utilize cheap fabric in merchandise production and get away with it by recognizing that their products are not meant to last forever, but only need to be worn while they are in style. Which, as we’ve mentioned, is not a very large time frame in this day and age. This system results in a shorter lead time for its products to reach its customers. A shorter lead time and cheaper production costs also mean a lower price for the consumer.

So, by the sound of it, Zara and its competitors in the fast fashion industry have struck gold as far as their business models go. They can:

Generate consumer demand by designing their own trendy collections and staying up to date with current styles
Be in charge of their own manufacturing and shipments due to their vertically integrated nature
Create cheap merchandise that is guaranteed to sell due to its stylish design and low prices

**So, what could do wrong?**

I myself did not want to acknowledge the downfalls of fast fashion for a long time. As a 21-year-old college student, I am, of course, going to look for the cheapest ways to get cute clothes. However, after doing some research into the side effects of this kind of supply chain, I have been thinking twice about the implications of where I buy products from.

“Sustainability” is a word that is so commonly thrown around in today’s society that the true meaning of it is often lost. If a company’s goal is to create a sustainable supply chain, one might think that simply entails trying to be more environmentally friendly although this is not the case.

A sustainable supply chain means that:

A company is actively integrating environmentally, socially and economically innovative practices into their manufacturing and distribution processes.

After diving deeper into this idea, I found five ways companies can take to practice sustainable supply chain management in their daily operations.

Here’s a breakdown of the methods we are going to look at:

Look to Purchase Ethically Sourced Raw Materials
Choose Quality Over Quantity
Operate a Pull Supply Chain
Keep Strong Communication Throughout the Supply Chain
Know That the Little Things Count

1. Look to Purchase Ethically Sourced Raw Materials

As I mentioned previously, many fast fashion companies look to produce merchandise from the cheapest materials they can find. For example, Zara purchases only about 4-5 materials in a year to create their extensive product line. Often, raw materials used in fast fashion lines are created in sweatshops in third world countries with little workers’ rights. Laborers in these environments have to work in dangerous labor conditions and for an inhumane amount of hours.

With sustainability practices becoming increasingly more important in the minds of consumers, many shoppers are opting for more ethically sourced merchandise. Secondhand boutiques are on the rise, such as Rebag, The Real Real, and Fashion Phile. These stores are all examples of luxury consignment shops where consumers can buy and sell their gently used, authentic bags.

To compete with these kinds of online stores, clothing companies should follow in the footsteps of upcycled or repurposed clothing brands. Stores like Gvilty repurpose details from designer clothes and turn them into new jewelry or apparel. Larger companies, like Patagonia or REI, utilize fabrics made from recycled materials (like nylon, polyester, and cashmere) in order to create high quality merchandise.

Another method of obtaining ethically sourced raw materials is to purchase or manufacture organic fabrics. By ditching synthetic materials like organic cotton, a brand can significantly cut down on the use of GMOs, pesticides and even water consumption during the manufacturing phase of the supply chain.

2. Choose Quality Over Quantity

While in today’s world consumers are constantly worried about missing out on the next big thing, producing multiple collections a season is not the only way to secure a market position as a sought-after brand. Producing a new collection every other week is only one option to make a name for your company – another is to produce quality, timeless pieces.

The “next big thing” isn’t always a new style crop top, but sometimes, a product that will last a lifetime. For example, Reformation is a brand that produces strictly sustainable products through repurposed raw materials and green production practices. They have found how to product a dress in a month without compromising quality. Instead of planning collections months or years in advance, they only design new products when they feel a gap in their product lines. Although Reformation can’t promise lower prices to its customers, the quality of its products are miles above those of fast fashion brands. Consumers are more willing to spend more up front for a product that will transcend seasons and trends, versus a pair of pants that will rip just as fast (if not faster) than it goes out of style.

3. Operate Pull Supply Chains

Another way to create more sustainability in a brand is to change from operating a push supply chain to a pull supply chain.

A push supply chain occurs when merchandise is shipped to stores on the basis of forecasted demand. Essentially, product is being pushed out to customers. This process is usually ideal for markets with predictable demand.
A pull supply chain happens when merchandise is ordered to the store as directed by the store’s POS system.

When a company operates with a pull supply chain, it is less likely that it will experience overstock or understock of merchandise. Especially with smaller clothing brands that does not have an established forecasting method, a pull supply chain can be more beneficial due to the fact it is more responsive to unclear consumer demand. This method cannot only reduce carbon footprint by only transporting products when needed, but it can also save the company money while doing so by using less resources.

4. Keep Strong Communication Throughout the Supply Chain

A great way for companies to ensure sustainability is to stay in communication with everyone involved throughout the supply chain. To do this, fashion companies should start by mapping out their entire supply chain. Fashion companies should not only hold themselves accountable, but their suppliers and distributers as well, if they are not vertically integrated. The brand should be involved in all parts of the process in order to know that the proper environmental and social precautions are being taken. Steps taken throughout the supply chain process should be documented and disclosed to all parties so that everyone involved can be held responsible for any excess labor hours, carbon emissions, or irresponsible use of raw materials.

Companies can also work with NGOs to gain their expertise in sustainable operations. NGOs have the ability to give credibility to a brand’s efforts to create a sustainable competitive advantage.

5. Know That Little Things Count

Businesses have the ability to do all of the energy saving steps that we as consumers are encouraged to do every day. In brick-and-mortar store fronts, businesses can use as little resources as possible in order to save energy as well as money. Ways for small businesses to cut down on resources include but are not limited to:

Turning off lights that are not in use
Keeping the thermostat at a regulated temperature
Unplug appliances at the end of the day
Reducing paper usage by encouraging emailed receipts
Hold virtual meetings in order to cut down on fuel emissions

Taking steps like these in a physical store may seem like trivial actions, but in the end, they can provide a great benefit to the company as a whole. Not only will these little steps save the business money, but they can also help build trust with consumers that are conscious of the environment. Once these actions are put into place, a business can start to advertise the green initiative it is on, so long as it is making an active attempt to conduct sustainable practices.

Conclusions

Social media is largely to blame for society’s “fear of missing out” culture. As soon as one person posts about wearing the next new trend, their followers will, well, follow. This phenomenon is why fast fashion companies can get away with producing quick and cheap clothes with little regard for the environmental or social implications.

But as the fashion industry has increasingly seen, there are other ways for a retail company to succeed without compromising on sustainability. Businesses, large or small, can build a brand reputation for being environmentally and socially conscious, and assist in making these ideals the cool trend to follow.

A few ways a company may be able to achieve this status is by producing merchandise with ethically sourced raw materials. We’ve seen how successful companies such as The Real Real and Patagonia use both up cycled products as well as organic materials to build their product lines. Companies may also choose to prioritize product quality over the quantity of their products. By doing so, brands will position themselves as a higher quality company over all compared to fast fashion competitors, and do not contribute to dangerous working conditions many laborers in the fashion industry are subjected to. Also, instead of a push supply chains, businesses may opt to operate a pull supply chain, in which stores receive merchandise on the basis of actual demand instead of forecasted demand. Not only could this method potentially save money, but it can prevent over stock or understock as well as reduce emissions from vehicles transporting unnecessary products. A fashion company may also choose to track each step of the supply chain process and keep in close contact with other parties and NGOs throughout. This is a good way to hold every business or department involved with the supply chain accountable for their actions and sustainability efforts. Finally, physical store fronts (especially small businesses) can engage in small steps every day to reduce the use of resources. This conservation of resources not only saves the business money, but it can also be an easy way for customers to witness first-hand the sustainability efforts the company is partaking in.

The fashion industry is second only to the oil industry in terms of pollution levels. In order for a company to succeed in this climate, it has to put energy into its sustainability efforts. In the long run, the importance of trends will have been not more than a trend itself, and companies that can prove their efforts will be of the most successful.

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5 Ways Fashion Companies Can Build a Sustainable Supply Chain Sustainability is no longer a point of difference in fashion, it has become a point of parity, required from new customer demands.

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Sources and Further Research

Virginia Bingol

Virginia Bingol is from a small town outside of Philadelphia, Pennsylvania called Kennett Square. Currently, she is a junior at the University of Pittsburgh pursing an undergraduate degree in Marketing and Supply Chain Management, as well as a minor in Studio Arts. She is excited for the opportunity to share her passion for the fashion industry in her role as a Content Specialist at 440 Industries.