A Five-R analysis for sustainablefashion supply chain management

in Hong Kong: a case analysisHolly Pui-Yan Ho and Tsan-Ming Choi

Institute of Textiles and Clothing, The Hong Kong Polytechnic University,Hong Kong, People’s Republic of China

Abstract

Purpose – The purpose of this paper is to explain why fashion companies would “go green” and toevaluate business models and sustainable supply chains. By applying the Five-R framework, theauthors further evaluate the initiation, implementation and institutionalization journey of a localfashion company and generate important insights and findings.Design/methodology/approach – It is an exploratory qualitative study. The Five-R conceptualframework is reviewed, proposed, and applied for a real case analysis.Findings – From the studies, data and literature gathered and analyzed hitherto, it is evident thatfashion companies can seize competitive advantage through strategic management of environmentalchallenges. In their greening initiatives, fashion companies should strongly consider the productdevelopment process and extend stewardship across the multiple life-cycles of products. The Five-Rframework, together with its future extensions, can offer an opportunity to clearly display what hasbeen achieved by the company at present and also succinctly demonstrate what area the company islacking in or where there is room for further beneficial development.Research limitations/implications – This research focuses on examining the scenario of one realcompany. The findings need not be generalized and applicable to all companies: this is a majorresearch limitation of this study.Practical implications – The research findings can help explain and conceptualize fashioncompanies’ journal of going-green. Some specific recommendations are given and managerial insightsare generated.Originality/value – This paper undertakes a qualitative real case analysis to study green supplychain management (SCM) challenges by applying the Five-R framework. The authors believe that thisstudy belongs to the first group of research works which specifically examine this area in the domainof fashion marketing and management.

Keywords Hong Kong, Fashion industry, Textile industry, Supply chain management,Five-R analysis, Green supply chain, Sustainable, Case analysis

Paper type Research paper

1. IntroductionGreen supply chain management (GSCM) can be defined as traditional supply chainmanagement (SCM) practices which integrate environmental criteria, or concerns, intoorganizational purchasing decision and long-term relationships with suppliers (Yanget al., 2010). Many companies endeavor moving toward sustainability in the supplychain, such as reducing procured resources and waste generation and discouragingone-time use and disposal (Vachon and Klassen, 2008), in order to obtain competitiveadvantage or reap economical benefits, for example. The World Commission onEnvironment and Development (WCED, now known as the Brundtland Commission)

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/1361-2026.htm

Journal of Fashion Marketing andManagement

Vol. 16 No. 2, 2012pp. 161-175

r Emerald Group Publishing Limited1361-2026

DOI 10.1108/13612021211222815

This paper is partially supported by funding from the Hong Kong Polytechnic University, undergrant no. G-YJ23.

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definition from 1987 assumes that for development to be sustainable, the needs of thepresent must be met without compromising the ability of future generations to meettheir own needs (Shedroff, 2009). There are a multitude of other direct and indirectbenefits and challenges in creating green and sustainable supply chains (Choi andChiu, 2012), many of which will be further explored in the subsequent discourse in afashion and textiles industry context.

There are plentiful strategies, techniques, standards and regulations from whichcompanies can derive global fashion supply chain management savvy. For instance, toachieve sustainability, some companies may employ reverse logistics (Abraham, 2011),facilitating an inverse product flow which caters to managing a product’s end-of-lifeprocesses, such as its subsequent disposal or re-integration back into the system fromwhich it came. Moreover, there is a tendency for green supply chains to become morecyclical in nature, by abandoning a more linear format in their efforts to keep wastewithin the industrial system. This transition from a one-way, integrated supply chainto an extended, closed loop supply chain is an ideal which many companies seek toachieve in the long term.

However, “re-routing” a supply chain is a daunting and monumental task. In orderto successfully design and manage a green fashion supply chain, there are myriadtradeoffs and factors to take into consideration. The ever-lengthening supply chains oftoday’s global economy present growing risks for retailers and manufacturers, whooften rely on dozens or even hundreds of suppliers to produce a finished product.Furthermore, the trend toward more complex and faster apparel supply chains aredoing little good for the ecological footprint of the industry: fashionand textiles – with the exception of the luxury market – is considered a low-valuemanufacturing industry. The billion-dollar question is: can it become a low-impactindustry? Businesses today are defined by their performance throughout thesupply chain: SCM consists of internal practices, those that are contained withina firm, and external practices, those that cross organizational boundaries, integrating afirm with its customers and suppliers. Therefore, firms should ideally workupstream with their suppliers and manufacturers in addition to downstreamwith their customers to ensure an all-encompassing “green alignment.” The above-mentioned methods of GSCM and others and their respective pros and cons areanalyzed in this paper in order to complement the GSCM frameworks and researchfindings.

In this paper, we will first review and explore the reasons why fashion companieswould “go green” and evaluate existing business models and sustainable supplychains. Following the background analysis, a Five-R framework is reviewed andproposed. As we will discuss in more details in Section 3, the Five-R framework refersto the conceptual model which contains five critical processes, namely “recycle, reuse,reduce, re-design and re-imagine” (Etsy and Winston, 2009). This Five-R frameworkwill be used to evaluate the initiation, implementation and institutionalization journeyof a Hong Kong-based fashion company[1]. The discoveries within the Five-R modelwill enable a measurement of the strengths and weaknesses of the local case study aswell as offer managerial insight and significance. Before we conclude, we will propose“what’s next” by investigating what would “go beyond the Five-R.” We believe thatthis paper provides good reference value to both the academicians and practitionersfor implementation and development of sustainability measures. This not only appliesto Hong Kong but may also apply to other markets where sustainability is also acritical issue.

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2. Literature review2.1 Keen for green: why do companies go green and sustainable?Firms are increasingly becoming responsible for environmental and social problemscaused by their suppliers. The best companies view sustainability not only as a chanceto contribute to social goals, but also as a powerful source of competitive advantageand a matter of corporate survival (Yang et al., 2010). It is widely argued that themajority of firms have adopted sustainable practices to strengthen brand names ordifferentiate their products. With the rise in demand for supply chain transparency andin the face of exponential competition, a company’s decision to “go green” can stemfrom many reasons and even years of data and research but for analysis purposesthese can be succinctly categorized into four distinct groups: social well-being,environmental stewardship, economic prosperity and governance. Moreover, there isthe notion of the triple bottom line, which takes into account the economical, social andenvironmental. Since the establishment of the WCED sustainability definition, bothacademicians and practitioners have argued that for development to remainsustainable, it must simultaneously satisfy environmental, social and economicstandards. Similarly, Shedroff (2009) substantiates this by stressing that sustainabilityneeds to address human capital – people, cultures, needs and desires; natural capital –the environment that sustains us; and financial capital – the monetary mechanismsthat makes most forms of design thrive. Further define sustainable supply chainmanagement (SSCM) as the integration and co-ordination of economic, environmentaland social practices throughout the supply chain to improve firms’ economic,environmental and social performance along the supply chain.

Social well-being. Social well-being encompasses improving labor standards andconditions, enhancing communities and creating and delivering socially responsibleproducts and services (Mahler, 2007). Environmental issues have unequivocallyclimbed up the public agenda; the mass media has disseminated this in vastlynumerous contexts. As a result, many consumers, companies and stakeholders alikeare more aware of, and request for, verifiable and legitimate data of green progressfrom companies. At the other end, supply chain managers have to extend their visionbeyond the shop floor and to the consumers, such as utilizing point-of-sales literature toeducate consumers and promote greener consumption. A survey from Accenture(2007) produced encouraging results: research found that 64 percent of respondentsare willing to pay a higher price for products and services that produce lowergreenhouse gas emissions, based on more than 7,500 consumers surveyed in17 countries in North America, Europe and Asia. However, it is worthwhile to considerthe possibility that the respondents answered in favor but in reality did not put theiranswers into practice.

Companies must also emphasize and continuously audit and fine-tune theircorporate social responsibility (CSR) goals, in order to competently satisfycommunities, customers and stakeholders within and beyond the society in whichthey operate. To move from a superficial gloss to a profound commitment, companiesneed to incorporate socially responsible values into their supply chain (Mahler, 2007).Rising transparency in supply chains also leads to rising scrutiny, thus collaborationacross the supply chain is paramount and organizations are inevitably realizingand reaping the benefits of working together: 52 percent have made significantimprovements in greening operations in the past year, according to 100 organizationssurveyed by PMP Research (2008). Moreover, 61 percent have done so with their keysuppliers and a further 26 percent have established this extended relationship with all

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their partners, thus strengthening relationships as far across the supply chain aspossible. In addition, while cooperation means working together, collaboration impliesworking together toward a common goal (Shedroff, 2009).

Environmental stewardship. Direct pressures from the natural world, such as watershortage and climate changes demand that GSCM should become an environmentaland ethical imperative. Environmental stewardship by companies can includeconserving energy and resources, consuming more renewable and less-pollutingenergy, increasing recycling, minimizing packaging and reducing the firm’s carbonfootprint (Mahler, 2007). The ultimate objective of extending the traditional supplychain is to consider the total, immediate and eventual environmental, effects of allproducts and processes (Ip, 2001). Hong Kong is a key hub for sourcing and productdevelopment, thus companies should leverage this opportunity to play an integral rolein propelling sustainability forward and across the supply chain, subsequentlycatering to local and global customer demands which can reshape markets, create newbusiness risks and generate opportunities for those prepared to respond.

Companies can achieve product stewardship by renewed target marketing –creating eco-market space and product differentiation by experimentation andinnovation, such as looking into the sustainability of resources and new raw materials.Joining other companies and forming partnerships organizations can also strengthenthe exposure and highlight the importance of environmental stewardship. For instance,the Sustainable Fashion Business Consortium (SFBC) was formed recently in 2008 by agroup of Hong Kong-based companies in the textiles and apparel sector, to promoteand increase the use of sustainable practices across the supply chain (SFBC, 2008).This includes moving Hong Kong’s environmental certification, labeling and carbonemissions businesses into the mainstream (Sung, 2008). Pat-Nie Woo, the chairman,underscored the group’s mission to be “a role model on sustainability, to make thedream of low-impact clothing a reality” (China CSR, 2008). Additionally, Hong Kongfashion and textile sector appear to be taking the mounting challenge of sustainabilityseriously (De Coster, 2008). For instance, Hong Kong has nearly 500 companiesOeko-Tex[2] certified, ranking the city as fifth among 84 countries, with Chinesemainland placed second.

Additionally, fashion and textile fairs are also accentuating the opportunities andbenefits underlining going green. In 2008, Interstoff Asia in Hong Kong re-brandeditself as Interstoff Asia Essential, a fair offering eco-fabrics and multi-functional fabrics(De Coster, 2008). Katy Lam, the show’s organizer elaborated, “The evolution ofInterstoff Asia Essential as a premium sourcing ground for textile buyers with a greenconscience has happened fairly quickly, largely due to Hong Kong’s pivotal sourcingand design role for the garment manufacturing industry in Asia” thus solidifying thatgreen sustainability is undoubtedly gaining momentum in Hong Kong’s fashion andtextiles industry and reinforcing its reputation as a key hub.

Economic prosperity. Economic prosperity comprises of promoting profits, creatingjobs, attracting customers, reducing costs, anticipating and managing long-term risksand fostering long-term competitiveness (Mahler, 2007). Conversely, it is importantto note that the greening of products often drives up costs, as additional requirementshave to be met at each stage of the supply chain (Seuring, 2001). Seuring (2001)elaborates on the differentiation between three cost levels, namely direct costs, activity-based costs and transaction costs.

Organizations such as SFBC have also joined with other groups (NGOs) includingReducing the Impact of Textiles on the Environment (RITE) group and WWF

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Hong Kong (Worldwide Fund for Nature), to further boost environmental awareness.WWF Hong Kong’s low-carbon manufacturing program aims to build a commonstandard for carbon footprint calculation for the fashion and textiles industry.From carbon accounting to benchmarking, it aims to reach the stage of carbon tradingunder a carbon footprint project. More importantly, carbon credits can be tradedin the world market and become a new source of revenue for the industry. Ip (2001)suggests several extended supply chain performance measures, such as productrecovery, product characteristics, waste emissions, exposure hazards and economicemissions.

The notion of “extended producer responsibility” is also predominant in theindustry, research by PMP Research (2008) illustrated that over 67 percent ofcompanies are having environmental demands placed on them by partners andshareholders. The after-life of a product has never been more significant, in parallelwith reducing and recycling post-industrial waste back into the supply chain. Simchi-Levi (2008) corroborates, referring to an Eye for Transport survey published inNovember 2007 which demonstrated green issues have already started to play animportant role in companies’ overall business strategy. The survey found 67 percent ofexecutives questioned in Europe believed that green issues are important to theircompany’s strategy. And while Europe is generally leading the way in regards tochampioning the green approach to business, a significant proportion of executives inthe USA, 59 percent, and Asia, 57 percent, viewed green as an integral part of theirlong-term strategy (Simchi-Levi, 2008).

Governance. Governments all over the world are raising environmental standards,thus placing pressure on many companies to adapt to increasingly stringentregulations in order to answer to both public and governmental agenda. At the sametime, a more complex regulatory imperative has evolved as global regulations becomemore complicated and dynamic (Powell and Prostko-Bell, 2010). This new imperativecreates an important shift in focus from violation prevention to embedded compliance;conformance has evolved to become less about reactionary tactics and more a part of astrategic business plan that includes supply chain actions with measurable successfactors, rather than vague attempts to preserve and promote brand image.

Recent research from the Hong Kong Trade Development Council (HKTDC)revealed about 40 percent of Hong Kong’s manufacturers operating in the Pearl RiverDelta (PRD) have increased their investment in technology in order to comply withthe Guangdong government’s increasingly stringent environmental requirements(HKTDC, 2008b). With the PRD government’s determination to tackle the pollutionproblem, the demand for environmental technology, products and services isincreasing exponentially, bringing business opportunities to Hong Kong’s eco-industry,according to findings from the same survey. Existing production facilities that fail tomeet the requirements and standards are forced to close or move. Therefore factoriesthat continue to stay in the PRD must invest in more environmentally friendlymanufacturing systems and effectively tap the green manufacturing opportunities inthe PRD. Moreover, new projects must pass an environmental impact assessmentand have pollution-control facilities installed when starting operation. By 2020, theGuangdong government plans to reduce sulfur dioxide emissions by 21 percent andchemical oxygen discharge by 24 percent, and have pledged to invest an extraRMB173.9 billion into greening manufacturing practices in the region.

While each phase of the supply chain boasts its own unique requirements, there is acommon thread throughout: access to comprehensive and accurate regulatory data are

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required during each and every phase, as this data are one of the most essentialrequirements for green and sustainability initiatives (Powell and Prostko-Bell, 2010).

2.2 The green supply chain frameworkGSCM is concerned with managing relationships and operations with suppliers andcustomers to deliver customer value at a low impact. Developing an effective strategycan reward companies with reputation enhancement, license to operate, avoidinglitigation, recruitment and retention of employees and developing process, product andstrategic innovations (Ansett, 2007). Components of a green supply chain frameworkseek to build upon each other to initiate, implement and institutionalize sustainableprocesses. As a popular scheme on environmental management as well as an exampleof institutionalization of GSCM, ISO 14000 helps companies to establish theirenvironmental-related operations and work flows (Delmas and Toffel, 2004; Laiet al., 2005; Lo et al., 2012). Under ISO 14000, companies can follow the respectivework processes and standard operating procedures to better manage their ownenvironmental-related programs. Following ISO 14000 standard, companies canidentify processes, develop a performance measurement system, measure the supplychain system, prioritize the processes, develop alternatives to the processes, selectapproaches and establish auditing and improvement procedures. A proper complianceto the standards could lead to the ISO 14000 certification which is an objective evidenceof the company’s achievement in environmental management and helps with theinstitutionalization of GSCM practices (Delmas and Montes-Sancho, 2011).

Coercion. Coercive pressures are exerted on a dependent firm by larger, moredominant organizations and by cultural expectations in the society within which thedependent firm operates (Lai et al., 2005). The pressures can be either formal orinformal and can be experienced as force, persuasion or invitations to join in collusion(Dimaggio and Powell, 1983). In some circumstances, organizational change is in directresponse to government mandate, such as manufacturers adopting new pollutioncontrol technologies to conform to environmental regulations.

Mimesis. Mimesis is a type of institutional isomorphism whereby the force ofuncertainty encourages the imitation of best practices. Firms model themselves onother similar or associated organizations in response to the uncertain businessenvironment. This is particularly true for firms which have ambiguous goals andoperates in a volatile environment (Lai et al., 2005), therefore this has particularresonance for the fashion and textiles industry.

Norms. Normative processes are the third type of institutional isomorphism,stemming from professionalization, which concerns the establishment of legitimizationfor the autonomy of a supply chain (Lai et al., 2005). In this context, the widedeployment of green practices becomes a norm for suppliers in the fashion and textilesindustry.

2.3 Approaches to sustainabilityThere are many models and frameworks for organizations to adapt in their quest forsustainability. In addition to the Five-R framework that we will discuss in the nextsection, Shedroff (2009) explored a framework which was first proposed by the threeluminaries of sustainability: Paul Hawking, Amory Lovins and Hunter Lovins. Noticethat Shedroff (2009) framework’s is also known as eco-efficiency, and is relativelysimplistic and thus easily understood; enabling a quick foundation for understandingthe value of sustainability and the new perspectives around sustainable design and

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development. The framework depicts four types of capital, namely natural, human,manufactured and financial capital.

Unsurprisingly, most companies to date have focussed on the “costs” quadrant inthe Green-to-Gold Plays Framework in their GSCM endeavors, which includes eco-efficiency, eco-expense reduction and value-chain eco-efficiency. Cost reduction isextremely low risk, easy to sell internally (Etsy and Winston, 2009) and return oninvestment (ROI) is quickly observed. It can also yield competitive advantage, but Etsyand Winston (2009) warns that by focussing solely on the cost side, many companiesare missing chances to generate broader eco-advantage. Eco-efficiency alone is notenough to combat neither competition nor the rising rate of consumption. Between2000 and 2005, world production of textile fibers increased from 53,327 to 65,531 million kg(De Coster, 2008), counterbalancing the steadily growing eco-efficiency in textile productionfacilities. This growth of global production cannot be simply offset by the reducingwaste and pollution in the supply chain and costs in the value chain. Additionally, simplyattempting to mitigate eco-risks is not enough to garner eco-advantage. The rise oftransparency leads to ubiquitous chances of risk to a company’s image, in particular thosewith a corporate reputation and a CSR mission statement. If distant suppliers are under firefor dumping waste in a river or under allegations of child labor, the brand (the one withthe international presence) is the one to come under fire. As such, damage control is simplynot enough; companies must take a pre-emptive stance and power ahead of regulationsbefore they become a regulatory reality.

In terms of tangible revenues generated from GSCM, Etsy and Winston (2009) inferthat re-designing processes and products to cut waste and pollution and marketingthem accordingly is a big part of eco-advantage. Moreover, potential gain lies outsidethe factory/company gates, thus eco-design can strengthen customer interest andloyalty, subsequently also appealing to new customers. Environmental vision cancreate new market space and value innovation (Etsy and Winston, 2009), as companiescan discover fresh expressions for their capabilities and success in the long term.

Lastly, an intangible, yet long term upside is brand equity; companies’ brand valuecan be worth more than their hard assets thus any threat to that has to be takenseriously (Etsy and Winston, 2009). A survey by Ernst & Young (Blanchard, 2008)showed that 71 percent of the companies questioned believe “reputation and brand” isthe area where green efforts will have the greatest impact. Thus the range of greeninitiatives extends across a broad spectrum of choice, opportunity and challenges, andcompanies should carefully consider the nature of their long-term commitmentsand goals in order to achieve ideal and sustainable; long and short term; tangible andintangible benefits.

3. Five-R analysis framework3.1 From Three-R to Five-RTraditionally, the pollution prevention hierarchy is formed by the three-Rs: reduce,reuse and (3) recycle. The primary difference between these processes is the extent towhich the characteristics of the product are changed (Ho et al., 2009). While thephysical characteristics of a material are maintained in reuse, recycling may changethe characteristics of the material completely including chemical and physical traits.Sarkis (2003) points out further that an organization has to decide which methods toemploy depending on the product characteristics.

This Three-R model has been extended to a Five-R model, as introduced by Etsyand Winston (2009). The additional segments of “re-design” and “re-imagine” serve to

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complete the Five-R pyramid of five-level analysis framework for the selected HongKong company. This Five-R model will be systematically applied in the analysis,comparison and evaluation of the company in the fashion and textiles industry andtheir GSCM ventures. It is hoped that this proposed framework will elucidate andcategorize the company’s greening initiatives accordingly, but it is also worth notingthat by no means are the Five-R’s mutually exclusive; a recycling method can be aderivative of an exercise in re-designing, for example. Moreover, the Five-R can beextended into a Six- or even Seven-R model as a result of the findings and datagathered.

3.2 Five-RRecycle. Recycling is the process by which materials are collected, processed intoreusable forms and subsequently used as raw materials for new products. Somecompanies have developed technologies to regenerate the denim fiber waste back intooriginal fiber length and form (HKTDC, 2009b). Two types of waste have beenidentified, which are post-industrial waste and post-consumer waste. Post-industrialwaste recycling is easier than recycling post-consumer waste, due to the fact that at thepost-industrial level, the content and composition of the material is known. Shedroff(2009) emphasizes that recycling is an important tenet of sustainability, but in order forit to be effective, products need to be easily disassembled into component parts andseparated by material. As a result, post-consumer waste complicates the matter,particularly in the separation process, as the fabric has undergone many changes sincethe initial industrial processes, therefore rendering the recycling more resource andcapital intensive, despite the higher value in doing so. Shedroff (2009) underscores theparticular challenge in recycling modern clothing which composes of natural andartificial fiber blends, such as cotton and rayon, neither of which can be recycled in thecompost or recycling bins.

Reuse. Reuse refers to repeating the usage of items in their original format. Insteadof discarding the items, they can be reused and thus have their usage life extended.This can include items such as dress pins, garment packaging or sewing needles.Shedroff (2009) suggests that in addition to the strategy of extending the use ofgarments to make them last longer, another is for companies to design their operationand components to be easily exchanged so that the majority of the components – andenvironmental impact – stay in use. In a fashion and textiles context, this notion ofmodularity can perhaps be achieved through garment packaging and fasteningcomponents such as zippers, buttons, eyelets, hooks and eyes.

Reduce. Reduce means source reduction and waste prevention. In a fashion andtextiles industry context, this could equate to buyers reflecting more carefully on theirfabric procurement; perhaps sourcing locally would be less environmentally taxingand if purchasing globally, they should minimize the safety stock ordered to preventfabric wastage. In the garment manufacturing process, sophisticated lay planningsoftware can help map out the ideal layout for pattern pieces which would result in lessfabric wastage following the fabric cutting process. Shedroff (2009) also defines theidea of eco-effectiveness as an idea not only to reduce waste but also to eliminatethe concept of waste.

Re-design. Prior to the process of reducing, companies should contemplate andexplore ways to re-design what they do and how they do it (Etsy and Winston, 2009).There are different perspectives under this re-design process. The first perspectivefocusses on product design which involves important topics such as the use of

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materials. The second perspective refers to the process re-design. The popular businessprocess re-engineering (BPR) scheme, in which companies try to streamline theirexisting business processes to enhance efficiency, is an example of process re-design.In the context of GSCM, BPR usually associates with the change/simplification ofbusiness processes to reduce logistics-related wastes (such as adopting local suppliesto reduce carbon footprint) as well as enhancing workflows with reduction of wastes(such as paper and energy).

Re-imagine. Even before the process of re-designing, companies can also considerthe re-imagination of their products or processes, since innovation is critical totwenty-first century competitive advantage. These two R’s aim to drive and directenvironmentally creative thinking into companies, encouraging them to seek newopportunities to add value to what they do and realize that re-designing and re-imagingprecludes the former Three-R’s in generating greater profit and long-lasting companyvalue and vision. A popular concept is “Design for Environment (DfE),” wherebydesigners create items by taking the environment into account. It is less expensive todesign a low-impact product than to manage or retrofit a high-impact one (Powell andProstko-Bell, 2010).

4. Local case study: Fashion Company D4.1 Company overviewFashion Company D was established in 1977. Their expertise mainly lies in ladieswoven apparel; specializing in high-quality soft goods in particular such assportswear, casual wear and suit pieces for well-known global brands. The company isalso renowned for their embellishment and embroidery techniques, along with theirstrong sample room facilities including fully computerized pattern making, gradingand marker preparation system. The company runs two main production plants inShenzhen, the main plant in Futian and a branch factory at Bo An, to provide quickresponse and tailor-made services to their customers. There is also a joint venture plantin Saigon, Vietnam. The total annual capacity is over 3,500,000 pieces of fashionapparel and distribution is spread as follows: 78 percent USA, 22 percent EU andothers. Some examples of some of the company’s primary international clients includeAnn Taylor, DKNY, Armani Exchange, Juicy Couture and Diane Von Furstenberg.

4.2 Fashion Company D: Five-R framework analysisUtilizing the Five-R framework developed and referenced above, Fashion Company Dis analyzed accordingly in the following section. For clarity and organization, thecompany has been analyzed in a tabular style (see Table I).

5. Discussions: beyond Five-R5.1 Discussions and insightsFrom the studies, data and literature gathered and analyzed hitherto, it is evident thatcompanies can seize competitive advantage through strategic management ofenvironmental challenges (Etsy and Winston, 2009). Scores of local and internationalcompanies have realized the significance of GSCM to long-term success and arepositioning themselves to develop green methods in their technologies and products,sometimes even preceding governmental regulations. Reasons for initiating GSCMrange far and wide and differ for each individual organization, but identifying threeinstitutional isomorphic processes complements the four GSCM strategies and assistedin further evaluating the local case study.

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Recycle

Fashion Company D’s focus has been on water recycling and steam power generation

The company recycles steam to generate renewable energy for heating water and powering the cooling system

(using heat exchange technology)

Result: this has saved 50 percent of air-conditioning electricity in 2009

There are two sets of water supply systems in the production and living area. One is for fresh water supply and the

other set is for recycled water supply, which is used for production, watering plants and flushing lavatories

The chiller is also powered by recycled steam

Reuse

Sewing thread cones are returned to suppliers for reuse

Treated waste water is reused in the system for washing, planting and other daily uses

Cotton fabric waste is donated to spinners for recycling and reuse

Reduce

80 percent of sewing machines at Fashion Company D have installed an automatic thread cutting device for

reducing thread wastage

Result: sewing machines have also been installed with a power-saving device, which has saved 20 percent of power

used by the motor consumption by reducing the electrical current from 1.62 to 0.56 amperes

Fashion Company D have invested in a water curtain-type air cooling system which provides better air quality and

has replaced conventional electric air conditioning. This has resulted in a reduced heat discharge, thus reducing

pollution to the environment

Result: by installing water curtain-type air cooling system it has replaced conventional electricity powered air

conditioning, saving 80 percent power in 2009

Fashion Company D have also saved in lighting energy by using T5 energy efficient fluorescent bulbs, the transfer

of which was fully completed by March 2009

Fashion Company D has proposed to reduce business travelling, by instead encouraging the usage of video

conferencing, live communicator and the MSC system to allow for real-time date exchange online. They are also

aiming to reduce the air freight paid by 65 percent within the next five years

Fashion Company D has also proposed to implement solar energy for processes such as heating water

Materials usage: Fashion Company D wants to reduce wastes with a target of having 99.95 percent of materials

being fully utilized

Fashion Company D has also reduced water tap pressure, reduced the flow of water discharge and encourages

employees to reduce the waste of fresh water

Re-design

As a result of their fiber diversification in both natural and man-made fibers, the composition of silk products in

their merchandise mix dropped from 65 percent in 2005 to 35 percent in 2009

Fashion Company D also aims within their five-year plan, to launch organic, fair-trade products and

environmentally friendly dyed fabrics. However, this is somewhat dependent on demand from their customers as

currently there is insufficient demand to drive this green initiative

In their business process re-engineering they implemented an ERP system, which facilitates a paperless office, in

addition to allowing for better collaboration across departments and thus reducing redundancies and streamlining

processes to achieve operational excellence

They also have plans to partner with environmentally conscious suppliers, such as their office paper source, in

addition to pioneering packaging sustainability and packaging waste reduction

Re-imagine

Re-designed and restructured their supply chain from a traditional batch flow to a lean manufacturing process

involving a one piece flow. The transition from batch flow to one piece flow totaled approximately two years; half a

year for research and analysis and one-and-a-half years to implement fully

Result: this one-piece flow process began in January 2007, which led to an increase in efficiency (cost) by 30 percent

by 2008. Other benefits included a shorter production lead time, allowed for just-in-time production, increased

accuracy of garment production and most importantly, reduced wastage

Company D are also rethinking about the society in which they operate in, such as looking to develop partnerships

with customers, suppliers and local communities in addition to working with the government

The company has also expressed their desire for employee centricity and vision in the organization, to ensure a

pleasant and productive working environment. They expect to increase their employees’ drive and encouragement

to others by launching an environmental awareness program, such as influencing them to engage in social service

activities such as tree planting and beach cleaning

Table I.Analysis of FashionCompany D: Five-Rframework analysis

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Companies can employ a suitable environmentally beneficial strategy to becomemore competitive, taking into account the temporal and monetary investments andthe “life” stage the company is in. Actualizing strategies into practice requires the viewof sustainability as a supply-chain-wide unified vision. Moreover, Friedman (2008)stipulates that in order to be successful, it is imperative that suppliers throughout thesupply chain view sustainability as a core business strategy. Therefore companies musttake a top-down approach and have their leadership committed to sustainability targets.Most significantly, greening the supply chain requires working with upstream suppliersand downstream customers as well as across the enterprise itself. Friedman (2008) alsoinfers that companies who do not begin to implement sustainability initiatives on theirown, will soon find it being required of them by shareholders, retailers, federal and stateagencies and most of all the consumers; it is only a matter of time.

In their greening initiatives, companies should strongly consider the productdevelopment process and extend stewardship across the multiple life cycles ofproducts. For instance, striving to design and develop products which have theminimum environmental impact during their manufacture, use and subsequentdisposal and treatment. Purchasing could also become an important agent for changeregarding environmental initiatives in the supply chain; responsible procurement in theform of local or regional in-sourcing can assist. If a company can afford to, staying onestep ahead is beneficial, as taking a pre-emptive market and regulatory stance ensuresfirst entry advantage and perhaps quicker ROI; companies who are followers willhave a more difficult time drawing alongside others as they do not have time to initiate,only imitate.

In the operational and manufacturing processes, there are countless techniques inwhich companies can employ to achieve sustainability, such as minimizing energyusage and waste where practicable and reuse or recycle materials where feasible.Companies need to set environmental targets which are both achievable and profitable.Progress and performance can be monitored by internal and external auditing; regularreports on the company’s own GSCM can help identify benchmarks and set futuretargets. The Five-R model offers an opportunity to clearly display what has beenachieved by the company at present and also succinctly demonstrates what area thecompany is lacking in or where there is room for further beneficial development.Environmental policies will need to be reviewed, fine-tuned and perhaps even changedon a regular basis in order to yield competitive advantage.

5.2 Beyond Five-R and future researchAs companies continue to compete and move through the twenty-first century, it isimperative that they ideally strive toward a closed-loop strategy in their GSCM, inorder to maximize their potential in all respects. It is apparent the fashion industry isundergoing a paradigm shift and companies who anticipate the shift and act prior to itwill inevitably benefit. However, further investigation is required into the differences inchallenges and benefits that small and large companies face in their efforts of GSCMand this requires a bigger sample and additional data and analysis. The Five-R modelprovides a basic framework for a straightforward and succinct comparison betweenorganizations and can be further developed in two proposed methods. First, a subsetscoring system has been inspired and proposed as a result of the Five-R analysis. Thisallows a quantitative evaluation of the company as well as a method to compare andcontrast it with other companies for future research and reference, therefore generatingmanagerial insights and significance. For instance, any tangible results generated by

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the Five-R analysis can garner the company extra points, the value of which can bedependent on the value of the “R” itself as well. Additionally, it is worth consideringextending the Five-R framework into a Six-R and beyond model; including wordssuch as re-wear, re-style, replace and rewards. Re-wearing and re-styling garmentswould reduce fashion obsolescence and reduce garment wastage. Replace would be thecounterpoint to re-wearing and re-styling, an analysis of what part of the fashionsupply chain prompts or exacerbates warp speed consumption. Rewards could lookinto incentives and schemes developed to encourage more green practices by societies,communities and target markets. With the extended “R” model and a subset scoringsystem, it would be sensible to analyze several companies of different sizes and globalpresence in order to compare and contrast the difference in priorities, approaches,implementations and results between organizations, thus offering more valuableinsight into the complex and timely world of green fashion and textile supply chains.

6. ConclusionThe fashion and textiles industry competition is undeniably cutthroat. With the risingcomplexity and increasing speed demanded from global and local fashion and textilesupply chains, the “race to the bottom” in a traditionally low-value manufacturingindustry is now losing momentum to one of the most opportune issues: GSCM andSSCM in order to create an ideal low-impact industry and reap the multi-disciplinarybenefits. There are myriad approaches, frameworks, standards and regulationsfor companies to adopt and develop in their quest for competitive advantageand sustainability through “greening” their supply chains. A selection of theseaforementioned strategies is evaluated to complement the discussion of the relativelyrecent reality and imperative of green and sustainable fashion supply chain practices.

In this paper, we review and propose the Five-R framework to examine GSCMchallenges. By applying it to explore a fashion company which has its headquarterslocated in Hong Kong (China), we generate important insights related to SSCM. We alsodiscuss future research direction by going “beyond these Five Rs.”

Notes

1. Much of the analysis of this paper focusses on the Hong Kong scenario because: Hong Kongis a renowned fashion center in Asia and it is also one of the largest suppliers of apparelproducts in the world; companies such as Li & Fung, and Fourtain Set are all Hong Kongbased and they are known as pioneers in implementing various SCM measures, includingsustainability measures; being a trading hub, Hong Kong is close to the “world factory”China in which environmental sustainability is now a critical issue (Lam and Postle, 2006;Yeung and Choi, 2011).

2. Oeko-Tex Standard 100 is a form of certification dating from 1992 that limits the use ofchemicals such as pesticides and heavy metals in clothing and is recognized as one of thestricter certifications in the industry in addition to being the world’s best-known qualitymark for textiles tested for harmful substances.

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Corresponding authorTsan-Ming Choi can be contacted at: tcjason@inet.polyu.edu.hk

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