3 Building Blocks to a Future-Proof & Sustainable Supply Chain
The fashion industry generates a staggering 1.2 billion equivalent tons of CO2 per year – that’s more than shipping and aviation combined! A 2018 Quantis study found that over 90% of these emissions are attributable to four activity areas in the supply chain: Dyeing and finishing, fabric preparation, yarn preparation and fiber production. Understandably, public demand for more responsible business conduct is growing and a sustainable supply chain is becoming increasingly more urgent.
Precise order estimates, stable supplier relationships, and transparent internal & external information policies are essential steps towards a lower ecological footprint. We looked at successful sustainable supply chains and identified three essential building blocks.
#1 The development of a fully comprehensive Bill of Materials (BoM)
The Bill of Materials (BoM) is the product’s DNA, so even the smallest inconsistency in its composition can have a big impact. It acts as the ‘shopping list’ of a product, its components, and their specific quantities and costs. Although each BoM should be tailored to the product at hand, it usually includes the category of components (e.g. fabrics, cut, trimmings), their size/dimension, color, supplier, and quantity required. In order to ensure clear planning whilst operating as resource-efficient as possible, every fabric, button and zipper should be recorded precisely down to the millimeter. This requires a focused interaction between the responsible designers, developers and product technicians in order to attain a sustainable supply chain from the moment the product exists.
Most fashion brands look for ways to make their products and operations more sustainable, whether for external branding, to align their own corporate values, or to improve profit margins. But to determine whether that means replacing environmentally harmful materials with more renewable alternatives in product design, or relying on more sustainable processing methods, starts with a holistic Bill of Materials.
#2 Stable and sincere supplier relationships as the red-thread to a sustainable supply chain
While an accurate Bill of Materials helps you build the core foundation for sustainable sourcing and product development, strong and transparent supplier relationships are the key to unlocking it. But with ever-present delivery pressures and the ongoing quest to maximize profits, modern supply chain partnerships often remain short-lived and superficial. Many brands use multiple producers interchangeably from season to season, making in-detail reporting beyond their “Tier-1” suppliers a tough hill to climb. As a result, many brands lack transparent and complete information about the real-life conditions in their suppliers’ raw material sourcing (Tier-2).
But it is here, in Tier-2, that the greatest violations of human rights and environmental impact are often encountered. That is why long-term, sustainable partnerships require more than the mere transaction to tie brands and producers. There is ample evidence that building trust with suppliers makes them more willing to fully share their information and work together on sustainability goals. To further strengthen that bond, joint strategic investments are playing an increasingly important role for lasting and healthy supplier relationships, contributing to an overall healthier and sustainable supply chain.
#3 Maintaining accessible and centralized information containers
A pragmatic way to strengthen supplier relationships is to build a relationship based upon collaboration – this can be initiated with a joint digital infrastructure to create a real foundation for greater transparency and intuitive information sharing. Many fashion brands communicate with their suppliers through multiple channels; via phone calls, mail exchange, or even WeChat. This opaque way of communicating not only complicates potential hand-overs, but it also creates the risk that essential product-related information on due diligence, compliance, and sustainability matters get lost in the process or remain unattainable for others.
That’s why brands are increasingly relying on centralized platforms through which 1) all supplier communications can be carried out and monitored, and 2) all relevant product information can be systemically stored and accessed in the cloud, in real-time from all involved parties. This way, you ensure that your sustainability efforts are not only genuine but that they can also be sufficiently executed in collaboration with your suppliers; as well as accurately logged in and retrieved for internal and external communication.
Using a PLM system to fortify a sustainable supply chain
Using an integrated PLM system is a thorough method for ensuring a sustainability edge to your supply chain. A PLM environment should allow you to automatically shift over and adjust your Bill of Materials from season to season to fit both smaller and larger changes – making human error a struggle of the past.
A PLM’s collaborative platform design also enables all internal and external parties to provide, access and approve all relevant product-related data inputs and outputs. The Delogue PLM platform allows you to directly communicate with your suppliers, quickly set up custom fields for your suppliers to gain insightful information about the impact of production, and transparently discuss every sustainability choice with the internal messaging tool. That way, designers, product technicians and suppliers are on the same page from the very start; should design requirements need changes to fulfill corporate sustainability agendas, alternatives can be explored before the prototyping stage, saving time, resources and money for all involved.
Is your brand ready for pending regulations – How sustainable is your supply chain?
Interconnecting the covered building blocks and relying on sophisticated software on that journey lays the core foundation for a resource-efficient and sustainable operative value chain. But to seek true sustainability, your full ecosystem needs to thoroughly align on that mission.
Find out how to put your best foot forward and lay the foundations across your brands operations in our free on-demand webinar:
Protecting your Supply Chain – for the Future
In this webinar you will discover how to optimize your own brand’s sustainability efforts, create transparent supply chains and why collaboration will be the make or break of fashion brand survival.