INTEGRATING SUSTAINABILITY IN LUXURY FASHION SUPPLY NETWORKS: AN EMPIRICAL INVESTIGATION OF LEATHER AND SILK

Hakan Karaosman,Patsy Perry,Alessandro Brun,Gustavo Morales-Alonso 글로벌지식마케팅경영학회 2017 Global Fashion Management Conference Vol.2017 No.07

State of the Art: Sustainability Integration in the Luxury Fashion Industry Introduction to Luxury Fashion ‘Luxury’, which comes from the Latin word ‘luxus’, refers to exaggerated life, glamour, comfort and wealth (Dubois, Czellar & Laurent, 2005). In the ancient world, luxury was associated with wealth, exclusivity, and power. After the 17th century, European countries’ economic democratization contributed to the reduction of existing sumptuary laws. Trade increased and larger segments of the population began to afford luxury products. Consequently, luxury moved from being limited to serve the common good to being a satisfaction of private needs. At the end of the 19th century, following the second industrial revolution, luxury earned its modern meaning of being enjoyable beyond the necessities of life (Fionda and Moore, 2009). The democratization of luxury resulted in mass luxury in which luxury brands have extended themselves to affordable offerings (Cristini et al., 2017). Luxury was long associated with the premium quality (Brun and Castelli, 2013), whereas today the technical reproduction of luxury is indulged by mass-produced brands (Cristini et al, 2017). Thus, one could argue that commercial drivers have taken over the industry whereby executives are increasingly seeking ways to transform creativity into profitability. Accordingly, the luxury market has experienced noticeable growth. The global luxury goods market reached a value of € 1.081B, with a growth rate of 4%, in 2016 (Bain & Company, 2016). Nevertheless, despite growth and high profit margins, the global fashion market is affected by macroeconomic, socio-political and natural events. For example, the short-term doubling in cotton prices brought many problems in 2011. Furthermore, scarce natural resources and rising commodity prices greatly challenge the ability of luxury fashion companies to remain profitable. The new luxury paradigm of being more accessible challenges not only sustainability but also operational aspects. The reputation of the luxury industry suffers from consumer concerns over poor labour standards in production, blood diamonds, irresponsible gold-mining practices and animal cruelty in global production networks (Hennigs et al, 2013; Moore, 2011). We therefore question how and to what extent luxury could play a positive role in our mass-consuming generation to slow down the pace for materialism and to better implement sustainability in globally dispersed production networks. Whilst sociologists, marketing and branding experts, have shown interest in luxury management, researchers in the field of operations and supply chain management have paid little attention to the topic: the first paper in the field appeared less than a decade ago (Brun et al., 2008), and furthermore, as of January 2017, there appear to be only 87 papers published in Scopus-indexed journals with ‘‘supply chain OR oper*’’ AND ‘’luxury’’ in the keywords. Henceforth, the current financial, environmental, economic and cultural crises could be considered significant drivers for how luxury operations could be advanced in the move toward sustainability. The focus of this paper is luxury personal goods such as fashion and accessories. The Relevance of Sustainability for Luxury Fashion Following the supply chain revolution of the 1990’s (Mohanty and Prakash, 2013) and the removal of the Multi-Fibre Arrangement in 2005, the fashion industry has become a global force in production and distribution. Globalisation has led to increasing outsourcing of production by fashion companies to a network of suppliers and subcontractors. The industry is characterized by shorter product life cycles and highly volatile market demand (Choi, 2013) alongside downward price pressure, international sourcing, high product variety and low predictability (Perry and Towers, 2013). To this end, fashion companies rely on sophisticated information and logistics systems to remain competitive in the market. Nonetheless, the fashion industry is somewhat inflexible toward major external changes outside the organizations’ direct control (Kozlowski et al., 2015). There is also a potential conflict between corporate responsibility and overarching commercial pressures in the fashion industry (Perry et al., 2015). According to the definition of sustainable development by The United Nations World Commission on Environment and Development (WCED, 1987), current needs should be met without endangering future generations’ rights to satisfy theirs. Luxury fashion companies must therefore acknowledging resource scarcity and other sustainability issues, and take collective actions for an authentic shift to create unique and sustainable businesses. To be profitable and sustainable, “luxury companies must adjust their definition of excellence that is no longer associated with shallow glamour but with positive engagement and deeper values” (Hennigs et al, 2013, p.33). An Overview of Sustainable Supply Chain Management (SSCM) Sustainability in SCM has captured academics’ interest since the early 1990s. Despite the growing interest, some fundamental issues still need to be addressed to provide novel models. The majority of the practices that make up green supply chain management (GSCM) models are modifications of existing practices (Pagell and Wu, 2009). However, earlier studies also stress that these programs might not be sufficient to become sustainable. Hence, it would be insightful to examine which components and which practices are required to make ‘sustainable’ chains. Social sustainability also requires deeper consideration. Wu and Pagell (2011) investigated how organizations deal with short-term pressures to remain economically viable during sustainability implementation, but did not consider social aspects of sustainability. Lee and Klassen (2008) identified the important drivers and enablers which promote environmental management capabilities in SME suppliers, but did not address social sustainability or specific measures for suppliers’ environmental management capabilities. Zhu and Cote (2004) and Vachon and Klassen (2006) demonstrated how to extend green practices, but again social aspects were not encompassed. Similarly, Caniato et al (2012) identified drivers that push companies to adopt green practices, various practices that could be used to advance environmental sustainability and environmental performance indicators measured by fashion companies. However, the social component was excluded. The recognition of corporate social responsibility (CSR) as a business activity is highlighted by the launch of ISO 26000; nonetheless, as illustrated earlier, extant SCM literature has mostly neglected the social aspects of sustainability. Despite a number of studies on aspects including social responsibility and consumer trust (Castaldo et al., 2008), sustainability reporting (Lozano and Huisingh, 2011), sustainable supply management (Ageron, Gunasekaran, & Spalanzani, 2012), and supplier selection problems (Jia et al., 2015), social issues demand more investigation (Perry and Towers, 2013). Sustaining an efficient global supply chain without compromising social responsibility (Perry et al., 2015). Embedding social and environmental management into SCM is needed yet challenging. Significant progress has been made in studies of the buyer-supplier relationship over the past decades, however despite some notable exceptions on green SCM (Zhu and Cote 2004; Zhu et al. 2008; Yu et al. 2014), the development of SSCM literature appears to focus on a single entity rather than the entire chain or network. Social and environmental performance of suppliers is an area of mounting concern, and collectively, sufficient coordination between supply chain partners is greatly needed. Many small and medium-sized suppliers encounter challenges in responding to environmental pressures due to limited capabilities and available resources (Lee and Klassen, 2008), and the most critical environmental and social issues in supply chains are generated by suppliers located in the second tier or further upstream (Tachizawa and Wong, 2014). Therefore, a holistic examination of the entire chain is required. In this vein, Pagell and Wu (2009) examined the chain as an entirety by explicitly addressing both environmental and social outcomes and by asking what unique behavioural patterns are needed for SSCM. However, the adoption of some of the practices is quite limited, which suggests the existence of additional contingencies. Their study called for future studies to explore the role of specific industries e.g. textiles. To this end, Ho and Choi (2012) investigated why fashion companies go green and evaluated sustainable supply chains. Nevertheless, the study was a single case study and did not consider potential differences in terms of antecedents affecting small and large companies. Curwen et al. (2013), interestingly, sought to document current challenges the fashion and apparel industry faces while developing sustainable apparel. Yet again, an imperative need arises to further explore the connections among product design, production processes and supply chain stages through a multidisciplinary approach. On the whole, the phenomena of sustainability has been interpreted in a variety of ways, ranging from a philosophical perspective to business management approaches (Ahi and Searcy, 2013), but more research is needed to show more than how to be ‘less unsustainable’. Traditional business research must go beyond studies focusing on profit with a rather short-term orientation and instead embrace components of how to create truly sustainable businesses. Considering the aforementioned gaps observed in the extant literature, the following research questions were formulated to investigate the phenomena of social and environmental sustainability at supply chain level within the luxury context, where ethical aspects are becoming increasingly critical for success (Brun and Castelli, 2013). RQ1: How do luxury fashion companies integrate sustainability into their supply networks? RQ2: How do contingent factors impact sustainability integration in luxury fashion supply networks? RQ3: Which behavioural patterns could be used to develop a sustainable supply chain configuration for the luxury fashion industry? Research Methodology Data was drawn from case studies of two Italian supply chains producing luxury silk and leather goods, encompassing 10 companies, with a focus on the individual supply chain as the level of analysis. These two supply chain were theoretically sampled to provide diversity in organizational characteristics and supply network relationships that could explain different approaches to the integration of sustainability into the entire chain. The research design followed Yin (1994) and previous studies in operations and SCM. Face to face interviews were conducted with senior managers of different functions in each supply chain during 2015-16. In most of the companies, responsibility for sustainability was divided and integrated into the jobs of multiple managers, meaning that there was no single individual assigned to sustainability. Additionally, the managers interviewed were often in charge of one or more functions, which helped reduce the number of interviews but increased interview content. The interview topic guide was developed from the literature review, and the theoretical constructs underpinning the interview protocol were then used to create an initial coding scheme for data. Data analysis was done inductively, by developing a framework from the cases while exploiting the theoretical concepts in the categorization of codes. The coding process was followed for all cases as an iterative process to assure consistency. Coding was not considered complete until a consensus was reached on each construct. Data analysis involved within and cross-case analysis. Results: Toward a Framework for Sustainable Luxury Supply Chains This study explored the luxury fashion industry from supply chain and operations management standpoint. Findings revealed seven key categories by which luxury fashion companies integrated environmental and social sustainability into their operations: Category 1: Sustainable product design, Category 2: Operations management, Category 3: Performance measurement, Category 4: Sourcing management, Category 5: Decent work and labour management, Category 6: Commitment to sustainability and organisational perceptions and Category 7: Longevity of suppliers. Firstly, natural resource scarcity was acknowledged by all 10 companies. To this end, some practices, including use of eco-friendly materials, hazardous chemical elimination, textile waste reuse, were applied to the fashion design stage with an attempt to mitigate the environmental impact of subsequent operations. Life cycle assessment (LCA was observed to be a significant tool among sample companies. Nonetheless, higher investment costs to employ more innovative solutions and to advance laboratory tests, higher prices for more ecological materials, and lack of knowledge in terms of fibre and textile components due to supply chain complexity prevented companies from advancing product stewardship. Regarding operations management, water emerged as a significant area where sample companies implemented incremental techniques, including natural tanning, on-site wastewater treatment, water purification and water reuse. Nevertheless, vertical integration, which was getting weaker in the luxury fashion industry, resulted in fashion companies having difficulties in the execution of their suppliers’ environmental performance. Practices implemented in this category were individual company attempts rather than collective action plans. It was not quite feasible to mitigate the environmental impact of independent networks where the buying firm outsourced its business functions to third party suppliers. In order to deal with lack of control and monitoring, sustainability must be understood as a concept to be integrated into the core business strategy with measurable indicators. Furthermore, traceability emerged as a pivotal topic. However, the complexity of global luxury fashion supply chains brought complications. Both supply chains showed that there was lack of knowledge about products’ production history. Due to globalization, countries with low operational costs appeared to leverage their competitive advantage. Changing market conditions resulted in the loss of, for example, silk production in Italy. Silkworm cultivation did not take place in Italy any longer, resulting in confusion regarding outsourced materials’ environmental and social records. High product variety and fragmentation of the production network made it difficult for companies to ensure full traceability. To this end, trust and knowledge transfer were weak, which could be improved to link non-economic goals with financial objectives. Another interesting result was that supplier audits were mostly made within first tier direct suppliers’ facilities. In some cases suppliers were provided with online self-assessment tools that were monitored by buying firms. Yet, buying firms and manufacturers required more efficient inspection methods and more realistic mitigation strategies. Ensuring social sustainability is hindered by complications such as lack of visibility and financial burdens. Consequently, technical and motivational dynamic capability development needed to be proactively initiated by focal companies. As stressed by earlier studies, sustainability must be a shared effort within all functions of a company and across its supply network. Sustainability could be disseminated across the chain only when all supply chain actors, including retailers, suppliers and sub-contractors, connect, understand and collaborate with each other. Correspondingly, it became clear that sustainability management required strong organizational commitment for which an alignment between financial and non-financial goals was greatly required. Hence, education and training activities received growing attention. In conclusion, the sample companies asked their supply chain partners to become sustainable for two main reasons, (i) to make the chain stronger, and (ii) to jointly learn and improve performance. Long-term relationships and supplier stability, as evidenced in the leather supply chains, could cultivate trust, which would result in advanced organizational and operational performance improvements. Supplier engagement and collaboration associated with knowledge dissemination could further enable companies to improve sustainability, and lastly innovation capabilities were imperative.

Extrusion Technology

Perry K.W. Ng 한국식품영양과학회 2012 한국식품영양과학회 학술대회발표집 Vol.2012 No.10

Settlement of Maritime Diputes

Perry,David 국제거래법학회 1992 國際去來法硏究 Vol.1 No.1

Surviving Schizophrenia in the Family: Four Case Studies

Perry Paul J. Espinosa 보안공학연구지원센터 2016 International Journal of Bio-Science and Bio-Techn Vol.8 No.5

This is a qualitative research, case study approach which explores the survival strategies of family members living with schizophrenic patients. The study consisted of a face-to-face, semi-structured interview with the twelve family members of four schizophrenics. Holloway’s Strategy was used in analyzing the data. The problems and difficulties identified are illness-related, eating, sleeping, and hygienic problems. The extent of problems reported ranges from minimally to extremely disruptive to family life, however, most of them had coped effectively. Family members were emotionally involved in taking care and supportive of their schizophrenic family member.

Experiences to Chemotherapy among Women with Breast Cancer

Perry Paul J. Espinosa,Mae Joy P. Espinosa 보안공학연구지원센터 2016 International Journal of Bio-Science and Bio-Techn Vol.8 No.4

Automated CT-Based Body Composition Analysis: A Golden Opportunity

Perry J. Pickhardt,Summers Ronald M.,John W. Garrett 대한영상의학회 2021 Korean Journal of Radiology Vol.22 No.12

isolation of Novel Agarolytic bacteria from Red Macroalgae

Perry Ayn Mayson M. MAZA,Kris Nino G. VALDEHUESA,Kristine Rose M. RAMOS,Angelo B. BAnARES,Rhudith B. CABULonG,Grace M. NisOLA,Won-Keun LEE,Wook-Jin CHUNG 한국생물공학회 2017 한국생물공학회 학술대회 Vol.2017 No.4

Mental Health Condition and Psychological Well-being of Filipino Older People

Perry Paul J. Espinosa 한국간호과학회 2021 한국간호과학회 학술대회 Vol.2021 No.10

Aim(s): This study determined the mental health condition and psychological well-being of older people in the Province of Iloilo, Philippines. Method(s): A total of two-hundred sixty four older people served as respondents of the study, which constituted 20 percent of the 1,308 total populations of older people in 8 identified areas. They were classified as young- old (60-70), middle-old (71-80), and old-old (81 and above). To meas-ure the mental health condition of the older people, the 28-item Scaled General Health Question-naire was used, divided into four sub-scales, namely: somatic symptoms, anxiety and insomnia, social dysfunction, and depression. The Scales of Psychological Well-being, six 9-item scales were used to measure their psychological well-being. Descriptive statistics and inferential statistics such as t-test, Analysis of variance (ANOVA), and Gamma were used in determining the differences and relationships between mental health condition and psychological well-being. Result(s): The results show that older people have good mental condition and were rated fair in psychological well-being and is significantly correlated to psychological well-being (Gamma = 0.267, p=0.030). Conclusion(s): A good mental health implies that the older people have the ability to make good life choices, maintain physical health and well-being, and having healthy relationships. Thus, the mental health of the older people is fundamental to good health, better well-being, and improved quality of life.

Free Radical Scavenging Effect of Added Ferulic Acid on Wheat Flour Products

Perry K. W. Ng,고봉경 계명대학교 자연과학연구소 2017 Quantitative Bio-Science Vol.36 No.1

The free radical scavenging effects of baked and extruded wheat flour products were determined. Ferulic acid was selected as a model phenolic compound and mixed with wheat flour at a level of 250 μg/g based on the flour weight. Free radical scavenging activity (FRSA) against the 1,1-diphenyl-2-picrylhydrazyl radical (DPPH) was determined. In the baking process, the most predominant change in activity was observed during fermentation, where increases in FRSA were observed in both fermented doughs with and without added ferulic acid. In contrast, the FRSA of the baked bread crumb decreased, despite the addition of ferulic acid. Additionally, FRSA differed with the cooking method. Cookies showed the highest FRSA because of the Maillard products. In bread, there was a large increase in FRSA following the addition of ferulic acid, and bread crumb was the most effective in retaining the free radical activity of the added ferulic acid.

Dermatoses that Present with Cutaneous Sclerosis

Perry, Harold O. Yonsei University, College of Medicine 1981 Yonsei medical journal Vol.22 No.2