...2. To make their supply chain more sustainable, due to the high demand for their shirts to be made from organically grown cotton, Esquel developed a project to innovate their supply chain, not just at certain points, but all the way through. To manage trade-offs between the performance of their business and the increasing demands for environmental sustainability/corporate social responsibility, Esquel aided the farms that they owned better adapt sustainable-farming techniques such as: drip irrigation which decreased water usage, planting disease-resistant cotton which was a natural form of pest/disease control, and decreased their use of pesticides. This resulted their cotton being produced much more stronger with less scrap during manufacturing of fabric, and increasing productivity. Also, Esquel employed the use of handpicking cotton rather than using chemicals to defoliate cotton leaves and thus saved the farmers from having to use more laborious measures later on to remove dirt and impurities from the chemically treated cotton. In addition, Esquel changed supplier customer relations and reinstated them as partnerships, making the farmers invest in new sustainable farming by providing them with microfinancing options via Standard Chartered Bank. Also, to decrease overstocking risks, employed a Just-In-Time method, where they only planted and picked cotton when payment was absolutely guaranteed. The company itself has improved it’s manufacturing by developing new ways to...
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...German national football team went on to win that game in lightweight football boots with screw-in-studs and made a mark in football pitches everywhere for the next couple of decades. The first piece of apparel offered by the Adidas group was the Franz Beckenbauer’s tracksuit, which was named after a Kaiser. Not only did Mr. Dassler invite athletes to Herzogenaurach for personal invites to tour Adidas but he would actually listen to the athletes and what they wanted in apparel and shoes. Upon research we found out that the Adidas group uses a large amounts of cotton, polyester, leather, recycled polystyrene and fabric. My group members and I will not only name the companies the Adidas group utilizes to manufacture their products but we will also provide graphs and paint a full picture of the process their materials go through. Some of the companies utilized to produce these products for the Adidas group are Better Cotton Initiative, Hwang Yih Textile, and Framas just to name a few. In 1978, the world was hit by the tragic news that Mr. Dassler passed away shortly before his 78th birthday. Even in the fact that he was no longer...
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...Warehouse Warehouse is a primary link between producers and customers. It is a part of a firm's logistics system that stores products at and between point-of-origin and point-of-consumption. Besides, warehouse provides information to management on the status. Adidas uses leased warehouse. Adidas can have the advantage of short-term space rental while using it like a private warehouse (Lambert, Stock & Ellram 2006). When Adidas took over sporting brands Reebok and Rockport. They wanted to take chance of the efficiencies and synergies that could be achieved by consolidating inventory from five key brands, which are Adidas, Reebok, Taylor Made, Rockport and Ashworth. On the other hand, Adidas’s Northern European operations, who serve and lead retailers in the UK, Ireland and Benelux was split between four conventional warehouses by using different systems and processes with the overspill being handled by third parties. According to Total Logistics’ recommendation, they develop a concept for a 30,000 m^2 fully automated facility. This was implemented in just 18 months, including the implementation of a new warehouse management system. The procedures took into account the current requirements of all five brands. This bought out the new facility layout and requirements and the overarching Adidas warehouse management system requirements (Total Logistic 2014). Transportation Adidas is one of the global leaders in the sporting goods industry. However, Adidas needs transportation...
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...SUPPLY CHAIN MANAGEMENT TERM PAPER ON IKEA’S SOURCING, DISTRIBUTION STRATEGY AND ITS GREEN SUPPLY CHAIN MANAGEMENT BY: SUBMITTED TO: KANIKA MURARKA Dr. P R S SARMA 1226113122 MBA-IB IIIrd TRIMESTER INTRODUCTION IKEA Group (IKEA) is a global retailer of Scandinavian designed furniture and accessories founded in Sweden in 1943. It has operations in 44 countries across Europe, North America, Asia and Australia and is headquartered in Delft, Netherlands. It employs 13000 people and sells 9500 home furnishing products in 298 retail stores worldwide. IKEA recorded revenues of $36101.5 million during the financial year ended in August 2012, an increase of 9.8% over 2011. IKEA offers a range of furniture for living rooms, bedrooms, kitchens and children’s rooms. Its emphasis on providing home furnishing products at low prices has been the main reason for the widespread customer acceptance of its products which, in turn, has facilitated its growth in various geographies. The company designs, manufactures, transports, sells and assembles its merchandise to minimize cost at each level. To help keep prices low, the group ensures that production equipment and raw materials are used efficiently. Customer involvement also contributes to low prices. IKEA relies on customers to choose, collect...
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...RADICALLY REINVENT YOUR SUPPLY CHAIN Spotlight ARTWORK Michael Johansson, Self Contained, 2010 containers, caravan, tractor, Volvo, pallets, refrigerators, etc. 8.2 x 10.8 x 2.4 m HBR.ORG Hau L. Lee (haulee@ stanford.edu) is the Thoma Professor of Operations, Information, and Technology at Stanford Graduate School of Business and the director of the Stanford Global Supply Chain Management Forum. He is on the board at Esquel, one of the companies discussed in this article. Don’t Tweak Your Supply Chain— Rethink It End to End October 2010 Harvard Business Review 63 by Hau L. Lee H SPOTLIGHT RADICALLY REINVENT YOUR SUPPLY CHAIN Hong Kong–based Esquel, one of the world’s leading producers of premium cotton shirts, faced a quandary in the early 2000s. Apparel and retail customers such as Nike and Marks & Spencer had begun asking the company about its environmental and social performance. Its leaders anticipated scrutiny from other customers as well, since more of them were demanding that a greater portion of the cotton in their shirts be grown organically. But the crop required a lot of water and pesticides, especially in poor and rapidly developing countries, where Esquel’s cotton was grown and processed. Though Esquel’s executives wanted to strengthen the company’s already serious commitment to social and environmental sustainability, they realized they couldn’t simply demand that the farmers who supplied extra-long-staple cotton just reduce their use...
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...Sustainable Fashion Supply Chain: Lessons from H&M Bin Shen Glorious Sun School of Business and Management, Donghua University, Shanghai 200051, China; E-Mail: binshen@dhu.edu.cn; Tel./Fax: +86-216-237-3621 Received: 15 July 2014; in revised form: 15 August 2014 / Accepted: 19 August 2014 / Published: 11 September 2014 Abstract: Sustainability is significantly important for fashion business due to consumers’ increasing awareness of environment. When a fashion company aims to promote sustainability, the main linkage is to develop a sustainable supply chain. This paper contributes to current knowledge of sustainable supply chain in the textile and clothing industry. We first depict the structure of sustainable fashion supply chain including eco-material preparation, sustainable manufacturing, green distribution, green retailing, and ethical consumers based on the extant literature. We study the case of the Swedish fast fashion company, H&M, which has constructed its sustainable supply chain in developing eco-materials, providing safety training, monitoring sustainable manufacturing, reducing carbon emission in distribution, and promoting eco-fashion. Moreover, based on the secondary data and analysis, we learn the lessons of H&M’s sustainable fashion supply chain from the country perspective: (1) the H&M’s sourcing managers may be more likely to select suppliers in the countries with lower degrees of human wellbeing; (2) the H&M’s supply chain manager may set a...
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...procurement Sourcing and procurement as driving forces for sustainable business b y Helen van Hoeven, Lean & Green Foreword President Obama recently said that there are only two kinds of car companies: those that sell hybrid cars and those that will sell hybrid cars in the near future. The same is true for sustainability in supply chains. There are companies that source and sell more sustainable products and there are those that will do so in the near future. With a world soon populated by nine billion people and over two billion new middle-class citizens, traditional sourcing and selling will simply be a no. You are either on the pathway to sustainable development or you are out of business. The challenge of sustainability is reshaping the relation ship between business and society. Industry needs to better manage natural resources and significantly lower its global ecological footprint. And companies need to engage much better with suppliers and workers in the emerging and developing economies. The mission of the Dutch Sustainable Trade Initiative (IDH) is to upscale and accelerate the mainstreaming of sustainability in international commodity chains. IDH joins the forces of business, non-governmental organisations, labour unions and governments. We bring diverse stakeholders together in focused and result-oriented sectoral coalitions that implement ambitious improvement programmes. These programmes tackle social, ecological and economical bottlenecks in the countries of origin...
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...responsibility gradually rise in the past decades for corporate. Organizations use corporate social responsibility (CSR) to set up activities in order to achieve and respond these expectations. Jamali and Mirshak (2007) state that CSR approach helps to attract global attention and acquire a new resonance in the worldwide economy. However, Frankental (2001) claims “Do CSR is a public relations (PR) invention?” and company focus on promoting itself, getting an edge on its revivals rather than being ethic to protect the environment or maintain human welfare. Therefore, in this essay, author is going to discuss about the different between CSR as well as PR. Moreover, it will apply an example of IKEA to examine the effectiveness of its CSR in supply chain and analyze CSR as a business strategy to maintain the sustainability of business, financial control and risk management. Afterwards, author will highlight the limitations of CSR policy and finally provide some recommendations to improve the CSR strategy for corporates in order to maintain the sustainable resources and increase the brand value as well as profit. Definition of PR According to Clark (2000) points out that public relation (PR) as a communication field from public information to reputation management to relationship management, it is emphasized on the promoting corporate image or two-way communication to gather audience feedback....
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...YOUR SUPPLY CHAIN ACCURATELY The volatility in cotton prices over the last three years should have taught everyone involved in cotton, textiles, and a very important lesson: namely, that understanding, managing, and scoring the supply chain accurately is critical to the survival and profitability of every business. Far too often, sourcing decisions have been made based on only one dimension – nominal price, or “first cost”. Price becomes meaningless if delivery is not made. A common refrain in 2011 was that the brand or retailer couldn’t get delivery of the garment because the contractor couldn’t get the fabric because the weaver or knitter did not get the yarn from the spinner who did not get the cotton from his supplier. In many cases, those who operated in the one-dimensional “price” world got stung very badly. There should be multiple factors involved in reaching sourcing decisions, and these factors are interactive. While sourcing decisions will be different for each region, each product, and each company, there are some common rules which should be followed. Sourcing executives should make informed decisions after carefully considering all the factors, the component parameters of those factors, and the way they interact with each other. This article offers a “Sourcing Scoreboard” for making informed decisions about scoring the supply chain accurately. This model is built for the sourcing decisions a U.S. brand or retailer would make for the supply of jeans...
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...UGB247- Responsible Business Report on Corporate Responsibility ‘Fashion Retailing in Europe’ Laura Wallace: 1083579942 Module Leader/ Tutor: Mark Winter 15th May 2015 Word Count: 3,296 1 Contents 1.0 What is Corporate Responsibility? Page 3 2.0 Key Issues of Corporate Responsibility Page 3 2.1 Issues Relating to Outsourcing Page 4 and 5 2.2 Child Labour Page 5 and 6 2.3 The Use of Animal Fur and Environmental Issues Page 6 and 7 3.0 Best Practice Within the Sector Page 7 3.1 Primark, Compensation and Utilitarianism Page 7 and 8 3.2 H&M, Child Labour and Deontology Page 8 3.3 M&S and Virtue Theory Page 8 and 9 4.0 Recommendations Page 9 4.1 Responsibility Auditing Page 9 4.2 Education Page 9 and 10 4.3 Making a Stand Against Animal Fur Page 10 5.0 Conclusion Page 10 6.0 References Page 11 and 12 7.0 Appendices Page 13, 14, 15 and 16 2 1.0 What is Corporate Responsibility? Corporate social responsibility (CSR) is “about businesses and other organizations going beyond the legal obligations to manage the impact they have on the environment and society.” (Lea, 2002) In recent years, the fashion retailing sector in Europe has gained a lot of media interest over its irresponsibility to society and its employees. Some companies which have been under scrutiny around this issue include: Primark, Zara and H&M as well as many other brands which are increasingly popular...
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...regular denim pants a “Levi”. In the year 1873, Levi Strauss and his business partner Jacob Davis received a patent for what would soon become the most popular denim brand ever made. (“Levi Strauss”). Because Levi’s is a well-known, international brand, it has suppliers all over the world. There are many different routes through which a pair of Levi’s jeans can be made, throughout the Americas, Europe, Asia, the Middle East, and Africa. One of the many routes taken in the production of a pair of Levi jeans is one located right here in the United States, operating from the San Francisco headquarters. In this route, the cotton is grown in the Mississippi Delta, the fabric is woven North Carolina, and finished in the Dominican Republic. (“Levi Strauss”). Aside from cotton production inside the U.S in places such as the Mississippi Delta and West Texas, Levis also uses cotton from all around the world. Countries like China, Pakistan, Egypt, Turkey, and Mexico all...
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...Laurence 67 Brunswick Street Fitzroy Vic. 3065 ABN 24 603 467 024 Ph: (03) 9483 1183 www.bsl.org.au the HUB of responsible business practice in Australia is a project of St James Ethics Centre © St James Ethics Centre 2 Contents Acknowledgments Summary Introduction Key findings The way forward Recommendations Introduction Brotherhood of St Laurence Gorman Industries Understanding the clothing industry Corporate responsibility and “sustainability” Developing tools for responsible business practice Roadmap methodology How we went about it Who we spoke to Overview of the garment supply chain The clothing industry roadmap Key sustainability issues in the garment sector Case study: Gorman Who is Gorman? The Gorman roadmap: Merino Tee and Forest Dress Unpicking the garment roadmap Design and production management Wool and cotton cultivation Processing raw materials and yarn manufacturing Knitting and weaving Fabric processing Cut make and trim Retailing and wholesaling Consumer use Textile waste and disposal Freight Towards sustainable garments Garment industry drivers Sources of information the HUB of responsible business practice in Australia is a project of St James Ethics Centre © St James Ethics Centre 5 6 6 7 11 12 14 14 15 15 17 18 19 19 20 22 22 23 28 28 29 32 32 34 39 43 45 48 51 55 56 58 60 60 61 3 Tools and resources Role of government Conclusions ...
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...changing. It is evolving into a fully integrated global economy, where corporations and their managers are faced with moral dilemmas and ethical questions as they expand their operations on a worldwide scale. As raw material sources, supply chains, and production facilities are increasingly being built and moved overseas, businesses are beginning to uncover new issues which complicate their processes and operations. Gray areas are developing relating to humanitarian and labor issues, environmental concerns, and governmental regulations that challenge even the most socially responsible and forward thinking companies. At the same time, citizens and shareholders alike are challenging global firms to address the Triple Bottom Line approach, an approach that equally emphasizes the importance of people, the planet, and profits in measuring the success of any given firm. Companies are still expected to succeed financially, while simultaneously taking care of the environment, their employees, and the communities in which they operate. In order to gain insight into this situation, one may consider The Travels Of A T-Shirt In The Global Economy by Pietra Rivoli. In this case study of a truly global product, Rivoli explores the path that a simple cotton t-shirt follows from raw material, to finished product, and finally on to its own secondary market. She explores the people behind each step in the process, the environmental concerns, the governmental aids, and the restrictions present...
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...* READ 1ST BULLET pg.31 * OVER THE PAST DECADE NIKE HAS SOUGHT THE HELP OF ENVIRONMENTALIST, CONSULTATIONS AND LIFE CYCLE ASSESSMENTS OF THEIR VAST PRODUCT LINE TO IDENTIFY WAYS TO IMPROVE THEIR SUPPLY CHAIN WHILE MAKING THE WORLD A BETTER PLACE TO LIVE. * NIKE HAS TAKEN A HARD LOOK AT WHAT THEY NEED TO DO TO THRIVE IN THIS NEW GLOBAL MARKET PLACE AND THEY’VE FOCUSED ON MATERIALS AND PROCESSES. THE CHOICE OF MATERIALS FOR THEIR PRODUCTS HAS ENVIRONTAL IMPLICATIONS UP AND DOWN THE VALUE CHAIN - THIS IS MASSIVE WHEN YOU CONSIDER THAT THERE ARE OVER 900 CONTRACT FACTORIES, ½ M DIFFERENT PRODUCTS & OVER 1M EMPLOYEE. * ENERGY REDUCTION WHICH IMPACTS THE CLIMATE- CO2 EMMISSIONS [ NIKE IS WORKING ACROSS THEIR VALUE CHAIN: OFFICE BUILDINGS, RETAIL STORES, MANUFACTURING FACILIES AND IN/OUT BOUND TRANSPORTATION] * LABOR – THE FACTORIES THAT SUPPLY THE NIKE BRANDS EMPLOY MORE THAT 1 MILLION PEOPLE. 67% FEMALES, AVERAGE AGE OF 31. LOOKING BACK 15 YEARS AGO, NIKE HAS HAD MANY LESSONS LEARNED. THEY HAVE WORKED WITH THE CONTRACT FACTORIES TO BUILD THEIR HUMAN RESOURCES MANAGEMENT SKILLS. CORUPTION AND HUMAN RIGHTS VIOLATIONS WERE COMMON. WITH THE MAJORITY OF CONTRAC. FAC’S IN CHINA, VIETNAM AND INDONESIA. NIKE HAS IMPROVED THE CAPABILITIES OF CANTRACT FACTORY MGMT LEADING TO SAFER WORKING CONDITIONS, LABOR RIGHTS, LIVING CONDITIONS IN THEIR COMMUNITIES. * CHEMISTRY – MATERIAL VENDORS & MANUFACTURING USE CHEMICALS IN DYEING AND OTHER PROCESSES. NIKE...
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...“We are one team” – H&M Executive Summary Sitting on top as the 3rd largest fast fashion producer in the world, H&M has enjoyed a spectacular 10% growth in the last five years. With its 600 million garments produced every year, H&M is a large player in the race to becoming a sustainable fashion house. After embracing sustainability at large in the last decade, H&M has made significant changes internally towards adopting and embedding sustainability into all their operations and value chain – but it’s still a work in progress. H&M’s CSR initiatives have a strong track record and involve various stages and stakeholders of its value chain, including their design team, suppliers of raw materials and fibers, as well as customers. Some of these renowned initiatives include the Better Cotton Initiative, the Conscious Collection, the Fashion Against AIDS collection and the Garment Collecting Initiative to name a few. All which have in common the involvement of different stakeholders, from suppliers to customers and designers. In this context, our challenge was to find what more can H&M do? Where and how should value be created, and which opportunity would create the most value for H&M and its stakeholder, all while increasing the company’s triple bottom line. The company’s core values, its strong customer focus and its business vision to provide customers with “fashion and quality at the best price in a sustainable way”, has driven many of H&M’s...
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