Although fashion needs more time to comply with current (let alone future) legislation, there is always time to begin and profit from a sustainability-related project. This is the third article in our series on Sustainability Return on Investment (SROI); previously, in article one, we discussed the drivers for SROI. In article two, we discussed the priorities for SROI. Now we get deeper into the practicalities of obtaining a return from investing in sustainability.
Due to the depth of the subject matter, we decided to split this article into two parts. Part 1 considers the changes required for environmental improvements to be achieved and sustained. And without giving away all our conclusions up-front, although profound change is needed, a phased approach can indeed generate SROI. In Part 2 – coming soon – we’ll provide some examples of measurable sustainability improvements in each supply chain Tier, 1 to 4, with results for brands and their partners.
Understanding resources and processes
To understand the impact of implementing sustainable business practices, we must first understand the origin of the resources used in product creation, and how we can select these processes to help deliver the most sustainable products to retail channels.
As discussed over the series of articles, methods and related techniques for the entire supply chain must be mapped for at least 50% of your supply chain partners to comply with the New York State Fashion Act. Still, it’s reasonable to assume that, eventually, fashion brands will need to map all supply chain processes to operate within the US, EU, and UK markets.
To put it another way, right now building that understanding of process, operation, and resource utilisation is a smart pragmatic step – but very soon it will be a mandatory one.
Leveraging process knowledge
To achieve that process and resource mapping, external and internal teams will need to work together to map each process, along with measurements captured for materials and resources. But once that mapping is done, there are many ways that designers, developers, and manufacturing teams can leverage the resulting data.
One of the most significant benefits will be educating designers and developers on depth of manufacturing methods across all tiers to enable teams to design and develop products transparently and sustainably. The traditional route of storyboards, sketches, and styling details on their own, by comparison, doesn’t answer whether this season’s collection has a lower environmental impact than last season, or which of the improved manufacturing processes will achieve the desired goals.
The industry needs to bring change at the design & development stage, designing with a capital ‘S‘ engrained in people’s minds, and with the support of benchmarks that can be quantified as they evolve from one collection to the next. In addition to the sketches and styling details, the design brief should include material options with the lowest environmental impact. Styling details and manufacturing methods should be related to processes and techniques, to identify the ecological impact measurements.
Using the approach of ‘less is more’, there should be conscious decisions taken on bringing to market fewer colours, producing smaller volumes, and capturing and communicating transparent information on materials & processes. Armed with the right data, these decisions can collectively deliver style-level profitably at the same time as enabling a simple focus on environmental impact at a detail level, but one that also rolls up to a significant effect across the collection. Products should be ‘designed to be both sustainable and profitable’.
One of the obstacles to this approach has always been the different teams’ ‘right brain vs left brain’ characteristics. Today’s ‘right brain’ creative designers need to gain the manufacturing knowledge of the ‘left brain’ team within the factories and mills (as well as wherever pattern making expertise sits). Technical designers or developers are often the bridge to this knowledge. When manufacturing was in our home countries, it was easy to connect with the local factory to understand any specifics of the manufacturing process. However, over the last 30+ years, this technological know-how has moved away from the western world. Over recent decades, know-how has dramatically reduced in brands and retailers operating outside of Asia – a technical knowledge ‘brain drain’.
To deliver on building the required understanding of what resources and processes it actually takes to bring a product to market, we need to improve fashion’s shared understanding of the mechanics of sourcing and production. To enable designers, developers, and manufacturers to apply a design approach with more significant insights into the sustainability and profitability of the proposed products, the industry must counter this knowledge drain. One of the ways to fill this gap is via mapping and sharing processes and primary data collected across the supply chain and ‘recirculated’ across the entire digital value chain to allow brands and retailers to make those sustainability choices accurately and simply at the earliest point in the product lifecycle. The result of this work will enable supply chain partners to find and create sustainable options for new styles at the earliest opportunity, with dynamic data growing constantly.
Access to near-time science-based sustainability and economic ‘data insights’ of all product processing options is the only realistic way to leverage the fashion industry’s environmental creativity.
Investment in the supply chain
Forward-thinking brands, retailers, manufacturers, and supply chain partners are already investing in deeper supply chain data ventures to create the foundations for a new level of mutual understanding. These investments will fund the ‘global’ essentials for compliance and end-to-end visibility, such as the tools, science-based methods, standards, certifications, and primary data required to measure individual processes’ environmental impact and fund the technology-based solutions to support streamlined and more sustainable practices.
This kind of investment might seem prohibitive for some organisations, but the fact remains that fashion, at a whole-industry level, must stop theorising and move to deliver the actual transformation from the analogue supply chain to a digital value chain. This delivery must start with the essential tools to capture and analyse processes and trusted primary data.
Considering all business processes
As with any transformation, we must map and measure the current situation and the improved change(s) we wish to implement. We are enabling the creation of a practical and realistic plan to execute, including accurate measurement and validation of the successful change’s environmental, social, and economic impact.
The list of processes and activities for the entire lifecycle of a collection of products delivered over the season is long and complex. Not only direct sampling or manufacturing processes impact the environment. Methods considered should include brand & retailing processes over the season. Planning orders, store drops, and replenishment is essential; for example, we all know air freight is expensive economically and environmentally, but how much and which are the best options to choose? Using DEFRA UK conversion factors to calculate the CO2e Kg impact for 1Kg of product shipped from Hong Kong / Yantian to London / Felixstowe, the air freight CO2e Kg impact is 9.78, and the sea freight CO2e Kg impact is 0.10; shipping products by air freight has 9,680% greater impact on the environment than sea freight!
It’s important to note that these are estimated values based on the Defra methodology. The actual emissions may vary depending on several factors, such as the type of cargo, carrier efficiency, and other operational factors. Other bodies provide conversion factors to calculate CO2e Kg, so if we take the example of shipping from Hong Kong / Yantian to New Jersey, the IATA (International Air Transport Association) estimates the air freight impact to be ~3.0 CO2e Kg. The Clean Cargo Working Group provides a standardised methodology for calculating CO2 emissions from ocean shipping and calculates the sea freight impact to be ~0.2 CO2e Kg. Whilst a smaller difference than the previous example, air freight has a 1,400% greater impact than sea freight.
Managing the processes that lead to change benefits
As the saying goes, ‘Rome wasn’t built in a day’! There are many processes and activities to map and measure and many options to consider when improving sustainability. The volume of change and effort required can appear overwhelming, so it’s important to know that we don’t need to change all processes simultaneously with a ‘big bang’ approach. Instead, these changes should be phased and linked to a new digital value chain, according to the priority of impact on the business, its employees, environment, and consumers/society as calculated by SROI.
Process decomposition modelling methods allow you to maintain a high-level view of your macro processes and enable drill down to those processes and measurements deemed as a high priority. New modules within PLM, such as the Bill of Process (BOP), are essential to helping designers, developers, and manufacturing engineers not only manage processes and measure their sustainable practices in combination with the Bill of Materials (BOM) and extended to the Bill of Labour (BOL), but also to provide a manageable method for implementation in phases. These combined modules will help to enable process measurement and analysis of primary data at a pace.
Drill down to the details.
So far, we have discussed the high-level processes, but there is an enormous quantity of detail and many deeper sub-processes and tasks that operate below this level. There are and will be MILLIONS of options to define and measure.
To illustrate the point, let’s estimate a typical supply chain.
Let’s ‘start at the top and consider ‘macro processes’, such as ‘commercialising a product’. There are many milestones, processes, and tasks within each macro function, and then many levels of what we would call sub-processes before we complete individual activities.
|Level in Supply Chain||Number per ‘parent’||Cumulative number per supply chain|
|Macro processes, e.g., Commercialise Product||10||10|
|Processes, e.g., Develop product||10||100+|
|Many levels of Sub-Processes||10 x 10||10,000+|
It’s easy to see how the number of processes within the business and across the supply chain partners will ‘explode’ exponentially.
Businesses must map their high-level process structure carefully and methodically drill down through macro-processes, and related sub-processes, to the individual tasks. The management of this type of project can be streamlined, with supporting tools and methods to document activities, measure and analyse the millions of data points required to assess each task’s environmental, societal, and economic impact.
There are tens of millions of data points, but don’t panic! Technology providers are already capturing vast amounts of design, development, manufacturing, and shipping data. The measurable ‘benefits’ happen when we bring these data points together!
Measurement of environmental impact
Whether you are measuring existing processes for compliance purposes or measuring SROI for proposed initiatives to support improved sustainability, how do you generate accurate and consistent science-based measurements for comparison across different partners, product categories, countries, and regions?
Measurement should enable the assessment of the impact of each activity and specific variations rather than using generic ‘template’ values whilst being able to roll up the appropriate level, whether process, material, product category, partner, or country. The potential improvements could include reducing process duration or quantity of materials or resource effort. Work study solutions can be used to calculate the labour effort (Standard Minute Values) linked to the design and development options. However, how do you assess the reduction of resources such as energy and water and their environmental impact? Businesses will need specialist third-party assistance to capture primary data details for each step of our ‘Bill of Process’, using a science-based, standardised measurement for selected processes, materials, machine types, energy costs, etc., which we can then use to compare and calculate the SROI for proposed sustainability improvements and enable validation once implemented.
An enormous depth of information is located and used in fashion supply chains, and the work to extract and leverage that data is vast. Obtaining it will take time and will be managed in phases with careful control, and many companies and tools can assist.
In part 2 of this article, we’ll share some examples of process improvements that are candidates for sustainability initiatives, and that can provide positive SROI, quantifying sustainability improvements as well as measuring the benefit to the bottom line.