How can more responsibility be ascribed to each individualcomponent of the value chain -- all the way from production to consumption --to bring about probable improvements in the sustainability aspects of theapparel industry.
The trendy humble T-shirt in your neighbourhood storehides the enormous effort that goes in to place it there. To understand theglobal effort that goes into producing a T-shirt, or an equivalent garment, wemust take a closer look at its life cycle. Given the dominance of fast fashionin the apparel industry, the life cycle is investigated through the productionand consumption of a garment in the fast fashion model.
The fast fashion model is built on the foundation ofreducing the time it takes between when the trends make a debut on the ramp andconsumption when the demand is at its peak.
However, to support this model, consequential eventscovering and affecting the entire world need to be set in motion. To put acotton T-shirt on sale at a store in New York, farmers grow crops, pick thecotton and sell to factories where the seeds are extracted, the bolls arecleaned, and the fibres are spun into thread. From factories, traders buy thespools of thread to sell to mills who produce the fabric and dye and sell thefabric to manufacturers. The garment manufacturers create T-shirts and thenload them in ships to reach the stores to be picked up by consumers.
In this process, farmers consume 18 per cent of theworld's pesticides and 25 per cent of insecticides. The mills generate 20 percent of the world's wastewater and together they generate 8 per cent of theworlds greenhouse gas (GHG) emissions. The factories make more than 40 millionworkers, mostly poor women from rural areas, work overtime in hot and dustyfacilities, and in addition to all this, a significant amount of clothing neverreaches the stores as trends change and one garbage truck equivalent is sent tolandfills every second.
These potentially detrimental effects of a seeminglysimple process can only be mitigated by carefully analysing and collaborativelyimproving each step of the value chain to ensure that good intentions don'tunintentionally create undesirable outcomes.
Taking a closer look, we can put more responsibility oneach individual component of the value chain, all the way from production toconsumption.
Better production
Garment manufacturing factories in several emergingcountries are known to operate inefficiently. These inefficiencies start muchbefore hitting the production floor, but the real impact on workers comes fromlow productivity in factory floors. These come from poor managerial skills ornot following data-driven methods for process planning and poor wage structure.
It is well known that improving productivity, and thereby reducing manufacturing costs per garment, can have a direct positive impact on the working conditions for millions of factory workers, and in turn, the well being of these workers can increase overall efficiency.
The reason factories do not upgrade to new methods of timekeeping and training is because of upfront investments and uncertainty of outcome. If any gains from efficiency improvement are spent to pay for these up-front costs, then the cost-benefit analysis does not remain compelling. The industry must, in turn, support innovative solution providers that are willing to break this entry barrier and work as partners to help the industry break these shackles.
Better buying
Over the years, the power equation between the fashion industrys buyers and suppliers have become increasingly imbalanced. A study conducted by McKinsey on the state of fashion in 2019 clearly indicates a polarisation of power among buyers and suppliers in the fashion industry. At about 97 per cent of the whole industrys economic profits distributed across just 20 companies, this consolidation is evidence of an imbalance in power.
The visible imbalance of power results in a set of processes that puts undue pressure on the manufacturers and suppliers to either produce goods within near impossible deadlines or conform to the constantly lowering prices paid to the manufacturers.
Conversations with industry reveal that there are often instances of factories taking orders at a loss, or orders where there is barely any margin left for any decent fixed cost.
The response of the squeeze by manufacturers is to find ways to keep costs low on all heads. Since the bulk of their costs are wages, they try to keep wages low and long work hours. The factories also under-invest in infrastructure to keep overhead costs low. The end result of this is poor working conditions for more than 40 million workers around the world.
Better consumption
The cash flow for the fashion business starts from the end consumers. Over the years, the consumers as a group have been the only real winners in the industry. Data from the US Bureau of Labour Statistics showed that consumer spending on apparel as a percentage of total consumer expenditure more than halved to 2 per cent from 5 per cent in 1987 despite people purchasing more apparel than any other time in history. The reason is consistent deflation of prices.
Brands and retailers now face consumer expectations of price deflation. Studies suggest that support of sustainability does not necessarily translate into a propensity to pay a higher price for purchases, and this behaviour needs to be changed through coordinated efforts.
Innovative solutions
Perhaps regulation can step in to make better hang tags mandatory for each apparel. Currently hang tags provide only limited information of suppliers but it could go beyond to include all steps of the supply chain. Apps would be useful to get details and brands could supplement this by having more informative hang tags for products. Emerging technologies like the Internet of Things (IoT) and data analytics could be implemented to ensure a more data-driven approach to increase efficiency for manufactures and provide a degree of transparency to all the stakeholders straddling the value chain.
Implementing these innovative solutions will definitely help consumers see the story of the product and the depth and breadth of steps that have gone into delivering that product, which could then be priced more appropriately.
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