Lecture 7 Flashcards
The Fashion Supply Chain
process of tracing each step of the clothes manufacturing process, from sourcing of the raw materials, to the factories where those materials are made into garments; and the distribution network by which the clothes are delivered to consumers
Linear supply chain
the process of turning raw material into final products
Global supply chain
the way that a product or industry is produces or traded globally
(Worldwide system that businesses use to produce products => can span various continents to source and supply goods and services)
Global supply chain advantages
- reduce cost
- wide range of suppliers and their competencies
Global supply chain disadvantages
- longer lead times
- risk due to decreased control + exchange rate fluctuations
Omnishoring
all-encompassing approach to outsourcing, combining elements of onshoring (outsourcing to companies within the same country), nearshoring (outsourcing to companies in nearby countries), and offshoring (outsourcing to companies in distant countries)
Types of omnishoring
a. Flexible and diversified outsourcing startegy
b. Possibility of sourcing according to products and degree of innovation
c. To manage different products, seasons, and stages of product Innovation (close in smaller series in beginning, distant in large quantities, again closer in end
d. Or locate production closer to markets where consumed
Vertically integrated supply chain
company owns several parts of the supply chain, and becomes independent from suppliers => Often involves acquiring or working closely with organizations above and below your business position in the supply chain
Vertically integrated supply chain examples
LVMH, Kering
Vertically integrated supply chain - advantages
- increase efficiencies
- lower cost
- compete with others
- control over value chain (ensure quality standards and sustainability, reduction of distribution costs)
Vertically integrated supply chain - disadvantages
- used mainly by big groups with adequate financial resources
- Even nearshoring is bringing challenges to their supply chains (as seen with recent luxury brands exploitation cases)
Hierarchical supply chain
company outsources known strategic or labor-intensive activities to external suppliers in proximity or in distance, according to its own business model
Hierarchical supply chain examples
Gucci, Prada, as well as sportswear brands such as Nike or Patagonia
Mix vertical and hierarchical examples
Vanity fair: owns and operates 24 world-class manufacturing sites, as well as contract with more than 1000 supplier factories to produce its own products
Inditex: directly carries out fabric supply, marking, cutting and finishing of garments in-house, and subcontracts the garment-making stage to specialized companies. Overall, they outsource its products from suppliers across 44 different markets
Ecosystem
The company is managing an ecosystem, not directly creating the product that its customers use;
Instead they coordinate interactions among groups.
Ecodesign
Incorporate sustainability into design practices
LCA shows which materials, processes and LC stage cause which impact
Create products as sustainable as possible
Incorporates policy, regulations and customer demand => more efficient use of resources
More sustainable supply chains
In many industries: supply chain more than 80% of environmental impact
footprint
valid sustainability claims
Consumers look behind the green façade and ask for data
LCA offers reliable env data about products
Reduce greenwashing, risk, gain trust, empower consumers to buy more responsibly
improved reputation
Sustainable companies attract talent and capital => reputation
Information provided by LCA
- Environmental impact of the goods produced
- Comparison btw two different manufacturing processes for the same product
- Comparison btw different stages of the life cycle of the same product
Cradle to cradle
sustainable design and production framework where products are created with the intention that, at the end of their lifecycle, they can be fully recycled, reused, or safely returned to the environment without causing harm
cradle to grave
linear production and consumption model where a product is designed, manufactured, used, and then discarded as waste at the end of its life
cradle to gate
assessment of a product’s environmental impact from the extraction of raw materials (cradle) to the point where the product leaves the factory gate (gate)
Product life cycle
raw material extraction
manufacturing/ assembly
transportation/ distribution
use
recycle/ disposal
Production inputs
- Energy
- Material
- Chemical inputs
Production outputs
- Emission to air
- Emission to water
- Emission to land
- Solid waste
