Updated: Nov 22, 2021
Sustainability is a widely recognized concern and priority for the healthy growth of society and protecting the planet. One of the biggest obstacles to the sustainable textile industry is the complex supply chain network. The textile and clothing supply chain consists of many materials. It has many possible arrangements and includes many actors from different parts of the world.
Raw material production and product manufacturing are generally located in developing countries due to the availability of low-paid workers. On the other hand, most of the retailers and customers are in developed countries. All these complexities make supply chain integration extremely difficult and result in an opaque network with limited information exchange between partners.
The textile and clothing supply chain has some features that distinguish it from other supply chains. For example, the textile and apparel supply chain is mostly based on voluntary guidelines and industrial compliance; therefore they lack standards and regulatory controls compared to food and pharmaceutical supply chains. This gives suppliers more freedom and they often follow unethical practices to reduce untraceable production costs.
Textiles and apparel products are often low priced, preventing the use of expensive information technologies for efficient supply chain monitoring. Another major problem is the lack of supply chain visibility and transparency, which plays an important role in making informed decisions, especially in the textile and apparel supply chain where actors are located in different locations.
According to the OECD (2017) report, traceability is one of the mechanisms that can be adapted to address the identified issues such as the smooth functioning of the textile and apparel supply chain, product counterfeiting, inefficient recall practice and lack of visibility. However, despite its various benefits, traceability is still an evolving, less adopted mechanism in the textile and apparel supply chain. Some of the reasons for its low adoption are the lack of proprietary and inexpensive technology developed taking into account the complex textile and apparel supply chain.
Therefore, traceability is a voluntary measure for companies and is partially accepted by brands.
Due to these limitations and the lack of a significant history of promoting traceability, there are not enough comparable cases. Traceability is still a new and under-studied mechanism in the textile and clothing supply chain. Relatedly, traceability does not only indicate the environmental sustainability aspect of the product. Thanks to an effective traceability system, the story of the product can be seen. Many information such as raw material, chemicals used, carbon footprint, manufacturer information, certifications can be conveyed to the end-user.
In addition, traceability acts as a valuable tool for validating product sustainability claims, thereby helping companies advance their sustainability goals.
To make accountable claims such as product lifecycle impact or social impact; production history, raw material information, logistics data, etc. It is imperative that all product aspects, including In this context, traceability is required in the industry that connects various supply chain stakeholders and facilitates the exchange of product-related information.
Traceability as per ISO 9000:2015 is the ability to identify and trace the history, distribution, location, applications of products, parts, materials, and services. A traceability system is processed as services from suppliers. It then records and tracks the information trail of the products, parts, materials, services that are ultimately distributed. Traceability supports the three pillars of sustainability. These are economic, environmental, and social sustainability.
It facilitates effective information flow and sharing between different supply chain actors. Thus, it helps to create transparency, product data management, demand forecasting, and logistics management.
Traceability in the Ecological Column
The ecological pillar is probably the most outstanding component of sustainability. It identifies variables including environmental and social, socio-demographic, and psychological factors that affect consumer purchasing behavior for green products. The textile industry is a customer-oriented industry where customer demands shape organizational strategies. In this context, consumers' interest in environmentally friendly products acts as a catalyst for sustainable clothing.
Eco-labels are widely used to provide such ecological information about the product. Despite the ecological evidence they provide, eco-labels have been criticized for being complex to provide useful ecological information and creating confusion that leads to greenwashing.
The ecological aspect of a textile product can be divided into three categories: raw material and production stage, use stage, and post-use stage. The first category focuses on raw materials, chemicals, the scope of water consumption, depletion of energy resources, etc. it depends. The second category includes energy used during the use phase such as washing, drying, and ironing, while the last category includes impacts from product disposal, including recycling and incineration.
Traceability in the Social Column
While the ecological aspect of sustainability is widely accepted by consumers, the social dimension forms the basis of issues that have been extensively criticized recently.
The basis of the social problem lies in the structure of the textile industry and its opaque supply network. Retailers often face a high level of competition forcing them to offer higher quality products at a lower price.
The retailer or brand owner acts as the “supply chain captain” driving the entire industry and initiates the request/order for top suppliers; therefore, it establishes an edge in the multi-actor supply network. Retailers with large orders can enforce their terms, including limited profit sharing on top actors who choose to maintain a long-term relationship with the brand for consistent demand.
For example, a textile factory in Pakistan received SA8000 health and safety certification a week before the same factory suffered a deadly fire in 2012 that caused multiple deaths. A similar incident, known as the Rana Plaza incident, occurred in Bangladesh. Due to poor infrastructure and illegal construction of factory floors, a high-rise building collapsed, killing more than a thousand people. In addition, the chance for these illegal practices is higher when some suppliers commission more of their manufacturing activities to uncertified subcontractors without notifying the brand owners.
As a result of such events, brands have faced intermittent social transparency of their supply chains and campaigns launched by non-governmental organizations to reveal the details of their suppliers.
Traceability in the Economic Column
The economic pillar is fundamental support for a sustainable and resilient system. Harwood defines economic sustainability as “a system that can continually evolve to provide greater benefits for humans, greater efficiency in resource use, and balance with humans, other species, and the environment”. Economic sustainability is especially necessary in fierce global competition. Moreover, many actors in the textile supply chain are small-scale industries where financial viability is particularly relevant to continuous operation.
Traceability information can be associated with two main economic factors, namely costs and benefits. Cost refers to the costs incurred by a buyer or retailer in the event of an external quality defect. Benefit means additional economic incentives. The adoption of traceability provides an organization. Traceability benefits businesses, especially with information beyond their organizational scope, which helps them better control and understand the supply chain.
In addition, traceability provides the visibility of the supply chain to the end consumer. It increases the trust of customers when purchasing the product, and helps brands in the long run by creating a brand identity for transparency perspective.
Use of information and communication technology (ICT)
Information and communication technology; automates product identification, data collection, data transfer, and data validation. Data collection includes recording and documenting processes through sensors and other devices that the product is exposed to as it passes through the supply chain.
Data transfer or sharing requires effective sharing of information among supply chain actors, including customers, auditors, and government regulators. Finally, the product and information must be verified to verify the claims.
These verifications can be done by changing the trace of a scientific test, chemical analysis of products or traceability information.
Besides open standards, there are various certification systems such as Fair Trade, Organic Cotton and Carbon certifications to address ethical and sustainability concerns. Certification requires information documentation, process awareness and product tracking, thus determining the extent of traceability in a supply chain.
Some of the areas where traceability contributes are:
• Transparency: Traceability allowing on-demand and effective information sharing results in a more transparent supply chain. A traceability system records and shares all key information from different supply chain actors. Thus, it helps to trace the origin of a product and examine its true social and environmental impact.
• Quality Management: With the increasing number of recalls and low-quality products in the textile and apparel supply chain, an effective traceability system can assist in quality monitoring. The source of the defect and the actors involved can be easily traced back with a traceability system. Also, if there is a quality-related issue and product recalls are initiated from the market, the main responsible stakeholder can be identified and penalized for negligence.
• Marketing: Traceability can also act as a marketing tool that can increase consumer confidence in the brand and assist in making informed purchasing decisions.
• Logistics Management: With real-time location information of each product through tracking tags, traceability can be helpful for logistics management. Products can be delivered at the right time and in quantity with proper control over inventory. In addition, with raw material composition information and other product-related data, traceability can overcome the challenges of the circular supply chain and assist in managing the reverse logistics operation.
• Supply Chain Circularity: Traceability can be a useful tool to overcome the challenges of the circular supply chain. It can automate the collection, sorting process and assist the product recycling process with actual raw material composition information.
As the textile industry is a fragmented industry made up of various suppliers, manufacturers and other stakeholders, sustainability cannot be achieved by the isolated efforts of one actor, but rather by the consistent participation of all. In this context, traceability integrates the entire industry as information.
Challenges in implementing traceability-supported sustainability
Transparency is the basic requirement of sustainability. Therefore, traceability helps to support different aspects of sustainability as well as integrate different actors into the supply chain to create transparency. However, implementing traceability is a challenging task due to the organizational and technological complexities and expected outcomes associated with the textile industry.
Organizational complexities can be analyzed from the organizational and supply chain context of the industry.
The textile industry is a dispersed network of actors carrying different operations. Brand owners only monitor the suppliers that influence them the most. The rest of the links are either indirectly followed or not followed at all. Therefore, the textile supply chain is not an integrated industry and the retailer, acting as the supply chain captain, partially controls the supply chain and there is no single actor who can implement traceability strategies throughout the supply chain. Traceability provides better control and other benefits that aid transparency in the supply chain, but increased transparency is not always beneficial and acceptable to everyone. For example, supply chain actors do not want to disclose all their suppliers and related information. Because this can directly or indirectly benefit competitors and influence their strategy.
A bigger problem with traceability is the lack of global regulations. Some countries have local regulations for traceability, such as the European Union regulations mandating traceability for all chemicals used in the textile industry, but such regulation is limited to a specific geographic area.
The technological aspect includes the challenges of technically establishing a supply chain-wide traceability system. Sustainability is an integrated phenomenon where all stakeholders in the production, consumption, and disposal stages contribute to sustainable practice, and a traceability system that can integrate them all will be needed. In this context, a common framework and standardized semantics will be required.
In the first article of our Traceability 101 series, we wanted to lay the groundwork for the traceability of the textile supply chain. In the next post in the series, we'll cover Traceability Systems and examine the biggest tech companies. Don't forget to subscribe to stay informed!