Posts by SupplyChainQueen

Is Circular Progress in Fashion Moving Forward or Far Away?

Introduction

The fashion industry fuels a linear economy with waste greater than $460B of value each year through unsustainable disposal of clothing (Ellen MacArthur Foundation, 2017). Characterized as one of the most polluting and wasteful industries, it consumes 98 million tonnes in non-renewable resources, 93 billion cubic metres of water, and 53 metric tons of fibre to produce clothes used for a short time, after which 13% of the total material input is recycled and 73% of the materials are sent to a grave via landfill or incineration (Ellen MacArthur Foundation, 2017). One estimate suggests that as global population grows to 16% by 2030, the mass-consumption of clothing will grow 65% as 3 billion people move into the middle class (Rosa, 2016).

Reimagining the current take-make-dispose linear process, a circular economy (CE) model demonstrates an opportunity to prevent value leakage by decoupling economic activity from the consumption of finite resources, including shrinking or decreasing use, slowing, and closing material loops as depicted in Figure 1 (Ellen MacArthur Foundation, 2015). This analysis will explore circular approaches that collectively address system-level waste in the textile and clothing system, and the effectiveness of each approach in the acquisition of materials, production of goods, consumption, and disposal.

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Cradle-to-Cradle System Design: reflections by Dr. Michael Braungart

 

Wanted to share insights from Dr. Michael Braungart on circular economy. My focus this Spring in post-graduate work is centered on application of circular economy theory in supply chain optimization.

The passage below is from ICR (2007) 7:152–156 – DOI 10.1007/s12146-007-0020-2 – © ICR 2007 Published online: 28 November 2007.

“Our current ‘eco-efficient’ view of sustainability sees materials flowing through the system in one direction only – from input to an output that is either consumed or disposed of in the form of waste. Eco-efficient techniques may be able to minimize the volume, velocity and toxicity of these material flows, but they cannot alter its linear progression ‘from cradle to grave’. While some materials are recycled, this recycling is difficult and brings added costs. The result of such recycling is actually downcycling: a downgrade in material quality which limits its future usability. We need an ‘eco-effective’ perspective to replace this limited and limiting agenda. In eco-effective industrial systems, the material intensity per service unit or ‘waste’ produced by each individual element is irrelevant as long as the materials entering the system are perpetually maintained as usable resources. For example, if the trimmings from the production of textile garments are composed in such a way that they become nutrients for ecological systems, then it doesn’t matter that they are not included in the saleable product. They are not ‘waste’. Even if the material intensity per service unit of the textile mill is astronomically high, it could still be highly eco-effective if its trimmings become productive resources for natural systems. The goal is not to minimize the cradle-to-grave flow of materials, but to generate cyclical cradle-to-cradle ‘metabolic cycles’ that enable materials to maintain their status as resources and accumulate intelligence over time.

Instead of downcycling this approach is all about upcycling. It doesn’t seek to eliminate waste or produce zero emissions. Instead it focuses on maintaining (or upgrading) resource quality and productivity through many cycles of use (and in doing so, it achieves ‘zero waste’ along the way). The difference between the two strategies of cradle-to-grave and cradle-to-cradle are very important. Strategies focused on achieving ‘zero waste’ do not create sustainable cradle-to-cradle cycles. But eco-efficient cradle-to-cradle cycles do achieve zero waste. How they achieve their goals is also different. ‘Zero waste’ cradle-to-grave strategies emphasize volume minimization, reduced consumption, design for repair and durability and design for recycling and reduced toxicity. On the other hand cradle-tocradle strategies design products and industrial processes so that every single one of their ‘outputs’ becomes a nutrient for another system – designed to be re-used – to create a perpetual cycle where resources are either maintained or ‘upcycled’.”

Personalized Customer Experiences Tied to Artificial Intelligence and Micro-Manufacturing

 

Thank you all for your engagement and support during #PanasonicCES! I was able to see and sample first-hand how Panasonic is transforming supply chains, connecting the customer to the manufacturer, delivering products faster and more accurately than ever before. The Twitter Poll results are in and you’ve asked for a deep-dive on the RFID Checkout Solution (45% of total votes). In this article, I’ll share how the solution is tied to a vision of personalization across the integrated supply chain and give a brief technical overview.

Panasonic’s Vision of the World in 2025

The future of retail must shift from simply selling items to providing personalized customer experiences that anticipate, learn, and respond where items in the real world and items from the memory of each person are connected. In order to deliver increased value for customers, the omni-channel experience will optimize how a customer places an order, how the product is manufactured and delivered, while providing complete end-to-end visibility throughout the process.

Technical Overview

The RFID Checkout Solution with Facial Recognition will optimize the customer’s in store experience, providing custom suggestions based on deep-learning, past purchases, easy and automated checkout, while facilitating delivery to the right place at just the right time, or providing grab-and-go functionality within seconds. As shown in my demonstration of the technology (click here to view), a key difference is how Panasonic is applying its best-in-class face authentication technology using deep-learning (age, gender, emotion), past purchases if applicable, and personalizing recommended products. Factors like facial direction, hidden areas (glasses, and hats), and even aging change information (yes it learns your age and will apply aging parameters) differentiate the face authentication technology. Settlement utilizes RFID technology based on the individual item information and facial recognition, remembering your payment preference. Several dozen items can be read at the same time and within seconds. Through process optimization, Panasonic takes a bottleneck in a retail setting and automates a slow-point, creating value for the customer and retailer. Cloud-based payment solutions can be customized based on the retailer’s preferences.

Personalized Customer Experiences Tied to Artificial Intelligence and Micro-Manufacturing

At CES, I was asked how Panasonic’s solution differs from other competitors? The answer is simple: Panasonic’s vision for customer purchasing in 2025 connects stores, factories, and logistics using AI, robotics, and RFID technology, transforming the way a product is ordered, made, shipped, and sold. By leveraging deep-learning, consumer preferences, point-of-sale data, and on-demand product personalization, Panasonic will use these insights as inputs to its’ manufacturing solutions that ensure full customization of a product, moving away from the practice of mass production. Embracing a make-to-order environment using micro-manufacturers and the Parallel Link Robot makes custom production easier and more cost effective, providing efficiency and value for the customer and  across the supply chain. For example, once previewed remotely, the customer can confirm the specifications of the product and the item receives an RFID tag, ensuring visibility through delivery. The result is increased customer satisfaction and retention while the costs of carrying inventory, reverse logistics, returns management, and poor quality are reduced for retailers. The solutions are creating a better life and a better world for all trading partners.

#PanasonicCES #CES2018 @PanasonicUSA

The Social Dilemma of Human Behavior & Sustainable Choices in the Fashion Supply Chain

Introduction

Although the premise of clothing characterizes a rudimentary need (Yawson, Armah, & Pappoe, 2009), the intricacies and system dynamics specific to the fashion industry’s supply chain are far from basic (Amed, Berg, Brantberg, & Hedrich, 2016). The current state of the fashion industry is challenging because factors contributing to its complexities are uncertain and constantly changing (Amed, Berg, Brantberg, & Hedrich, 2016). From the acquisition of raw materials, to manufacturing and distribution for purchase by the consumer, the fashion industry can influence sustainable practices across the global supply chain (Strahle & Muller, 2017).

Sustainability involves changing environmental dynamics that affect dimensions of ecology, economy, socio-politics, and human behavior (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). Research shows an inherent dissension among some fashion consumers (McNeill & Moore, 2015), who “often share a concern for environmental issues even as they indulge in consumer patterns antithetical to ecological best practices” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). An emerging concept in industry is fast fashion, which refers to “low-cost clothing collections that mimic current luxury fashion trends and helps sate deeply held desires among young consumers in the industrialized world for luxury fashion, even as it embodies unsustainability” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012).

Globalization and competition create increased financial and operational pressures in industry to reduce costs (Christopher, Lowson, & Peck, 2004). When paired with growth in human population (Strahle & Muller, 2017), scarcity of natural resources (De Vries, 2013), growth in industry (Amed, Berg, Brantberg, & Hedrich, 2016), advances in technology, consumer trends (Education Bureau, 2017), and human behavior in social dilemmas, the participants in a fashion supply chain may partake in unsustainable business practices (Chan & Wong, 2012). At the intersection of globalization, market competition, fast fashion (Joy, Sherry, Venkatesh, Wang, & Chan, 2012) and sustainability is the social dilemma of fashionable versus durable clothing. This analysis will explore the social dilemma of human behavior and sustainable choices in the fashion supply chain using the context of a pay-off matrix (De Vries, 2013).

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Social Dilemma Assessment

A social dilemma is where interdependent participants face a conflict between the maximizing personal gain and/or a collective interest (Dawes, 1980). As noted by Dr. Robyn Dawes (1980), leading psychologist and researcher, “public goods dilemmas occur when individuals can choose whether to contribute to a common pool that benefits both contributors and non-contributors alike, as long as enough choose to contribute”. Resource dilemmas are slightly different because individuals can decide how much to withdraw for personal use from a common pool that will only be maintained if withdrawals are kept to a minimum (Dawes, 1980). Public goods and resource dilemmas encompass “many of the most critical problems facing humanity, most notably those regarding resource shortages caused by overuse and failures to contribute to the common good” (Shankar & Pavitt, 2002). Moreover, research demonstrates that communication between participants has a significant effect on cooperation rates in these two types of social dilemmas (Shankar & Pavitt, 2002).

Overview of the Pay-Off Matrix

The pay-off matrix offers a way to analyze human behavior in situations of interdependence and conflict (Yawson, Armah, & Pappoe, 2009). As depicted in Figure 1, interdependent positions can range from virtuously cooperative, wherein a gain for one is a gain for the others, to a win-lose competitive position (Dawes, 1980). A decision to maximize individual gain is known as a defecting choice (Dawes, 1980), depicted as “you are the free rider” in Figure 1 (De Vries, 2013). Conversely, a win-win decision (De Vries, 2013) to maximize the gain of the collective is known as a cooperative choice (Dawes, 1980). Furthermore, “at any given decision point individuals receive higher payoffs for making selfish choices than they do making cooperative choices regardless of the choices made by those with whom they interact” (Weber, Kopelman, & Messick, 2004). The cost of the dilemma is that everyone involved receives a lower payoff by making a selfish choice (Dawes, 1980).

 

Figure 1: Pay-Off Matrix in a Social Dilemma (De Vries, 2013)

Pay-Off Matrix Participants in a Fashion Supply Chain

While enduring substantial growth over the past two decades (Strahle & Muller, 2017), the fashion industry has drastically evolved due to retail consolidation, globalization and e-commerce (Amed, Berg, Brantberg, & Hedrich, 2016). It is considered to be one of the most polluting industries in the world (Strahle & Muller, 2017). Industry and trading partners often request for participants to act sustainably (Strahle & Muller, 2017). Participants in a fashion supply chain include suppliers, manufacturers, distributors, retailers, and consumers (Strahle & Muller, 2017).

Theory and Influence in Consumer Fashion Decisions

Martin Christopher, thought leader in supply chain theory and best practice, defines fashion markets as typically exhibiting the following characteristics: short life cycles, high volatility, low predictability and high impulse purchasing (Christopher, Lowson, & Peck, 2004). A key concept in understanding the impulses of consumer purchasing is Maslow’s theory of human motivation (Chan & Wong, 2012). The theory classifies all human efforts as an attempt to fulfill one of five needs (Yawson, Armah, & Pappoe, 2009, p. 951). Figure 2 shows the hierarchical order in which these needs are connected, specifically in decisions that involve buying clothes.

Figure 2: Adaption of Maslow’s Motivational Theory in Fashion-Based Decisions (Yawson, Armah, & Pappoe, 2009, pp. 952-953)

Consumer decisions to purchase fashionable or durable clothing are also influenced by body type, age, family, lifestyle, peers, society, and consumer socialization (Yang, Song, & Song, 2017), or amount of disposable income that allows for considerations of quality and durability (Education Bureau, 2017). Other influences include values from one’s culture, environment, and value orientation (Education Bureau, 2017, p. 16). Lastly, frequency of wear and care instruction (McNeill & Moore, 2015) may influence the need for fashionable, inexpensive, and of lesser quality clothing versus durable clothing (Education Bureau, 2017, pp. 47-51).

Perspectives in the Pay-Off Matrix

Using the interdependent participants in a fashion supply chain, the over-arching perspectives and the decision to cooperate or defect in sustainable practices are shown below in Figure 3.

Figure 3: Pay-Off Matrix in a Fashion Supply Chain (De Vries, 2013)

Cooperate, Cooperate: A Win-Win Solution

When all participants cooperate, all are aligned in sustainable practices (Yang, Song, & Song, 2017). Because all parties benefit from this scenario, resolutions to the conflict are likely to be accepted voluntarily (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). In this scenario, the supplier uses ethical growing conditions, labor practices, and pricing mechanisms that are passed onto the manufacturer (McNeill & Moore, 2015). The product is manufactured with considerations in sustainable design, efficient use of water and energy in textile process, chemical-free treatments, and lean waste reduction (Shankar & Pavitt, 2002). Distributors and retailers respect considerations of packaging waste, energy use in transportation and logistics (Christopher, Lowson, & Peck, 2004) and the ethical treatment of trading partners. Most importantly, the consumer uses sustainable participation across the supply chain to guide purchasing decisions. After purchase, the consumer limits the use of chemical detergents, water and energy use in care, early disposal and landfill waste, and shares the experience with others in his or her circle of influence (Yang, Song, & Song, 2017). The costs of quality and sustainable considerations are shared and accepted by each participant (Jung & Jin, 2014).

Cooperate, Defect

In this scenario, the consumer adheres to sustainable practices while the supplier, manufacturer, distributor, and retailer defect. The consumer receives a small positive individual outcome that is immediate and a large negative collective outcome (the depletion of future resources) is delayed (Shankar & Pavitt, 2002). The defectors receive a higher payoff in the short run no matter what decisions all other individuals make (Dawes, 1980). The result is that the consumers suffers or loses (Dawes, 1980). The defecting choice is known as the “dominant strategy” (Dawes, 1980). Because the dominant strategy produces less preferred outcomes, it is known to be a deficient outcome (Dawes, 1980). The costs of sustainable considerations are born by the consumer and common resource pools (Jung & Jin, 2014).

Defect, Cooperate

In this scenario, the consumer defects and is “a free-rider” (De Vries, 2013), while the supplier, manufacturer, distributor, and retailer adhere to sustainable practices. The consumer pursues individual short-term interest regardless of the impact to common resource pools in the long run (Chan & Wong, 2012). Common pool resources are available to all participants such as air, water, energy, and are increasingly in short supply (Shankar & Pavitt, 2002). When the consumer defects, resources are still available without any personal cost borne. The collective actively participates in aforesaid sustainable practices across the supply chain.

Defect, Defect: The Commons Tragedy

In this scenario called the commons tragedy (De Vries, 2013), all participants in the supply chain defect causing unsustainable outcomes in decision making as depicted in Figure 4. The concept echoes that “open-access common resource pools are exploited until the very last unit as long as someone else pays for it” (De Vries, 2013, p. 390). In a widely cited paper entitled The Tragedy of Commons (1968), the biologist Hardin suggested there is an inherent tendency amongst humans to overexploit such a shared, common, or collective resource” (De Vries, 2013, p. 390). Research related to the commons tragedy “emphasizes the role of factors that may predispose people to take risks in social dilemmas” including aforementioned theory and influence in consumer fashion decisions (Weber, Kopelman, & Messick, 2004). As Figure 4 suggests, participants may differ systematically in the way each arrives at the same decision to defect.

 

Figure 4: Unsustainable Outcomes of Decisions Made by Participants in the Fashion Supply Chain (Strahle & Muller, 2017)

Conclusion

Sustainability and ethical conduct has gained increasing importance in the fashion industry (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). Many fashion companies are focusing on tactical efficiencies, implementing changes to their core operations “from shortening the length of the fashion cycle to integrating sustainable inno­vation into their core product design and manu­facturing processes (Amed, Berg, Brantberg, & Hedrich, 2016). However, although companies realize that trendy, affordable fashion raises sustainable concerns, the pressure to meet consumers demands is still influencing industry behavior (Amed, Berg, Brantberg, & Hedrich, 2016).  As demonstrated in this analysis, sustainable decisions in the textile and fashion industry can be controlled along the supply chain (Strahle & Muller, 2017). Specifically, “retailers are the link between the supplier and the consumers. They could be the ecological gatekeepers and help the relevant partners along the supply chains incorporate sustainability into the business” (Yang, Song, & Song, 2017). While the fashion supply chain and consumers continue to evolve in the progression of whether to make and/or consume fashionable or green products, the challenge to connect and meet “deeper elements of value, such as high ethical standards in sourcing, efficient use of materials, low-impact manufacturing, assembly, and distribution,” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012) will remain challenging for decades to come.

References

Amed, I., Berg, A., Brantberg, L., & Hedrich, S. (2016, December). The State of Fashion. Retrieved October 29, 2017, from McKinsey & Company: https://www.mckinsey.com/industries/retail/our-insights/the-state-of-fashion

Chan, T., & Wong, C. (2012). The Consumption Side of Sustainable Fashion Supply Chain: Understanding Fashion Consumer Eco‐fashion Consumption Decision. Journal of Fashion Marketing and Management: An International Journal, 16(2), 193-212. doi:10.1108/13612021211222824

Christopher, M., Lowson, R., & Peck, H. (2004). Creating Agile Supply Chains in the Fashion Industry. International Journal of Retail Distribution Management, 32(8), 367-376. doi:10.1108/09590550410546188

Dawes, R. M. (1980). Social Dilemmas. Annual Review of Psychology, 31, 169-193.

De Vries, B. (2013). Sustainability Science. Cambridge: Cambridge University Press.

Education Bureau. (2017, November 13). Consumer Behavior in Clothing Choices and Implications. Retrieved from www.hkedcity.net/res_data/edbltr-te/1-1000/…/2_Consumer_eng_Oct_2011.pdf

Joy, A., Sherry, J., Venkatesh, A., Wang, J., & Chan, R. (2012). Fast Fashion, Sustainability, and the Ethical Appeal of Luxury Brands. Fashion Theory, 16(3), 273-296. doi:10.2752/175174112X13340749707123

Jung, S., & Jin, B. (2014). A Theoretical Investigation of Slow Fashion: Sustainable Future of the Apparel Industry. (D. E. Kempen, Ed.) International Journal of Consumer Studies, 38(5), 510-519. doi:10.1111/ijcs.12127

McNeill, L., & Moore, R. (2015, May). Sustainable Fashion Consumption and the Fast Fashion Conundrum: Fashionable Consumers and Attitudes to Sustainability in Clothing Choice. International Journal of Consumer Studies, 39(3), 212-222. doi:10.1111/ijcs.12169

Shankar, A., & Pavitt, C. (2002, July). Resource and Public Goods Dilemmas: A New Issue for Communication Research. The Review of Communication, 251-272.

Social Dilemma. (n.d.). Retrieved November 7, 2017, from Wikipedia: https://en.wikipedia.org/wiki/Social_dilemma

Strahle, J., & Muller, V. (2017, October 30). Key Aspects of Sustainability in Fashion Retail. Retrieved from Springer Link: https://link.springer.com/chapter/10.1007/978-981-10-2440-5_2

Sustainable Apparel Coalition. (2017, November 7). The Higg Index. Retrieved from Sustainable Apparel Coalition: https://apparelcoalition.org/the-higg-index/

Weber, J. M., Kopelman, S., & Messick, D. M. (2004). A Conceptual Review of Decision Making in Social Dilemmas: Applying a Logic of Appropriateness. 8(3), pp. 281-307.

Yang, S., Song, Y., & Song, S. (2017). Sustainable Retailing in the Fashion Industry: A Systematic Literature Review. Sustainability, 9(7), 1266. doi:10.3390/su9071266

Yawson, D., Armah, F., & Pappoe, A. (2009, November). Enabling Sustainability: Hierarchical Need-Based Framework for Promoting Sustainable Data Infrastructure in Developing Countries. Sustainability, 946-959.

Why Business Can Bridge the Gap to Solve Social Problems

Why do we turn to nonprofits, NGOs and governments to solve society’s biggest problems? Michael Porter admits he’s biased, as a business school professor, but he wants you to hear his case for letting business try to solve massive problems like climate change and access to water. Why? Because when business solves a problem, it makes a profit — which lets that solution grow.

Moving Towards a Circular Economy

When you think about accelerating impacts and long-term solutions to current supply chain challenges that impact the 3P’s (people, planet and profit), we need to adopt and develop sustainable frameworks with a holistic life-cycle perspective. There is a ton of innovation happening in the CPG space (Levi’s, Unilever, PepsiCo, etc.)

Shifting from the current ‘take-make-waste’ linear model to the circular economy is critical for businesses to continue to thrive and meet society’s needs. Waste volumes are projected to increase from 1.3 to 2.2 billion tons by 2025, and with nearly 9 billion consumers on the planet including 3 billion new middle class consumers by 2030. The challenges of addressing waste and meeting increasing demand are unprecedented. Therefore it is imperative businesses continue to re-evaluate raw materials, design, manufacturing, consumption, and end of life to keep materials and products continuously flowing through closed loop systems.

How is your company innovating in product life cycle management from design and inception to sustainable product packaging? How are you personally adopting a sustainable mindset in your home, the daily choices you make as a consumer to move toward a circular economy? The bigger question is how are YOU INFLUENCING this change?

The Surprising Habits of Original Thinkers

How do creative people come up with great ideas? Organizational psychologist Adam Grant studies “originals”: thinkers who dream up new ideas and take action to put them into the world. In this talk, learn three unexpected habits of originals — including embracing failure. “The greatest originals are the ones who fail the most, because they’re the ones who try the most,” Grant says. “You need a lot of bad ideas in order to get a few good ones.”

Blockchain: Revolutionizing the Global Supply Chain by Building Trust and Transparency

Introduction

The history of Supply Chain Management has evolved since its’ roots in the early 1900s. From improving labor processes of basic material handling and freight transportation, to more sophisticated approaches of balancing cost and efficiency trade-offs, the concept of a supply chain is no longer siloed. It requires integration of supplier-customer relationships, process synchronization, and data harmonization in a complex, dynamic network that is susceptible to vulnerabilities in a global environment. Critical processes to this relationship include real-time communication, collaboration, trust, and transparency that yield mutually beneficial outcomes and competitive advantage. In today’s world, there is a growing prevalence in leading firms advancing toward the adoption, development and implementation of Blockchain technology as a backbone of business operations. This case dives a bit deeper into Blockchain, a novel technology with the strong potential to revolutionize the Global Supply Chain. The goal of this analysis is to discuss: 1) the key technical and economic aspects of Blockchain, 2) the current Blockchain innovators, barriers, and obstacles to Marketplace acceptance, 3) the business case for Blockchain, and 4) future applications and implications of Blockchain technology.

Click here to read the research: Blockchain_Revolutionizing the Global Supply Chain by Building Trust and Transparency