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European Management Journal 32 (2014) 837–849

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European Management Journal

j o u r n a l h o m e p a g e : w w w . e l s e v i e r . c o m / l o c a t e / e m j

Sustainable supply chain management in the fast fashion industry: An analysis of corporate reports

http://dx.doi.org/10.1016/j.emj.2014.02.001 0263-2373/� 2014 Elsevier Ltd. All rights reserved.

⇑ Corresponding author. Tel.: +90 232 4115333; fax: +90 232 3745474. E-mail addresses: [email protected], [email protected] (D. Turker).

Duygu Turker a,⇑, Ceren Altuntas b a Business Administration, Faculty of Administration and Economics Sciences, Yasar University, Selcuk Yasar Kampusu, Universite Caddesi, Agacli Yol, No. 35–37 Bornova, Izmir 35100, Turkey b Sea and Port Management, Vocational School, Yasar University, Selcuk Yasar Kampusu, Universite Caddesi, Agacli Yol, No. 35–37 Bornova, Izmir 35100, Turkey

a r t i c l e i n f o

Article history: Received 30 August 2013 Accepted 12 February 2014 Available online 14 April 2014 Handling Editor: Tsan-Ming Choi

Keywords: Sustainability Supply chain management Fast fashion industry Sustainability reports

a b s t r a c t

In recent decades, the fast fashion industry has been characterized by widespread operations across both developing and developed countries. Due to the economic, social and environmental problems in devel- oping countries, companies increasingly focus on sustainability and try to ensure the same quality and standards in working and production conditions throughout their supply chains. Although the tension in the exchange of resources between developing and developed countries lies at the heart of current sus- tainability activities, what these companies are actually doing to manage their supply chain has not yet been explored in depth in the literature. Drawing on the theoretical framework of Seuring and Müller (2008), the current study attempts to fill this void by conceptually mapping the current situation of sus- tainable supply chain management (SSCM) in the fast fashion industry by analysing reports from 9 com- panies that use the same reporting guidelines. The results of the study reveal that these companies focus significantly on supplier compliance with their code of conduct, employing further monitoring and audit- ing activities to prevent production problems in developing countries, improve overall supply chain per- formance and set sustainability criteria for their suppliers.

� 2014 Elsevier Ltd. All rights reserved.

Introduction

As a result of the extended supply chains in modern business operations, sustainable supply chain management (SSCM) has started to attract increasing attention from both scholars and prac- titioners in recent years. The attention of practitioners has been raised by a change in focus from corporate sustainability to specific layers of the supply chain due to pressures imposed by interna- tional and local regulations, non-governmental organizations (NGOs), customers and competitors (Amaeshi, Osuji, & Nnodim, 2008; Welford, 2005; Welford & Frost, 2006). These developments in the business world have in turn triggered scholarly attention for theory building (e.g. Carter & Rogers, 2008; Seuring & Müller, 2008), metric development (e.g. Hassini, Surti, & Searcy, 2012), case analysis (e.g. Pagell & Wu, 2009) and surveys (e.g. Bowen, Cousins, Lamming, & Faruk, 2001). New research efforts are being developed on individual or all the integrated dimensions of SSCM, namely economy, environment and society, which together are also called the triple bottom line (Kleindorfer, Singhal, & Van Wassenhove, 2005). Integration of these dimensions would be

highly valuable as the existing literature regarding SSCM is rather uni-dimensional, with an intense focus on the environment (Seuring & Müller, 2008). Existing conceptualization and framing efforts have led to different definitions of SSCM and different implications for scholarly research in various fields.

The concept of SSCM is usually defined by evaluating the com- ponents of its integrated structure. Within its general framework, SSCM includes supply chain management (SCM) and sustainability. Therefore, it can be defined as ‘‘the management of material, infor- mation and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimen- sions of sustainable development . . . into account which are de- rived from customer and stakeholder requirements’’ (Seuring & Müller, 2008: 1700). SSCM can also be considered as the integra- tion of corporate sustainability into SCM whereby the key dimen- sions of corporate sustainability are combined with SCM characteristics (Ahi & Searcy, 2013). However, regardless of the generic definition accepted, SSCM implications vary depending on the structure of the specific supply chain that they belong to. Sustainability requirements of, for example, a steel supply chain could be totally different than the supply chain for children’s toys or fast fashion clothing. Therefore, a sectorial snapshot is required for the proposition of further applications in leading supply chains

838 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

or for spreading sector-specific practices to competing supply chains. This article attempts to provide such effort snapshot for the fast fashion clothing industry.

The fast fashion industry owes its special features and structure to its requirements for shortened lead-times, faster inventory turn- overs and high order fulfilment rates for customer demand at its peak points (Barnes & Lea-Greenwood, 2006). The industry has a highly competitive structure that not only puts pressure on costs, but also the ability to offer the ‘‘newest’’ possible trend to the customers (Christopher et al., 2004). Therefore, it requires a high degree of responsiveness combined with a certain level of effi- ciency. This responsiveness to demand is satisfied through the adoption of supply chain strategies like just-in-time sourcing (Bruce, Daly, & Towers, 2004), quick response systems (Fernie & Azuma, 2004; MacCarthy & Jayarathne, 2010) and agile SCM (Bruce et al., 2004). However, in order to become and stay responsive, various ethical (Barnes & Lea-Greenwood, 2006), employment (De Brito, Carbone, & Blanquart, 2008) and environmental issues (Saicheua, Knox, & Cooper, 2012) are being disregarded, which is creating an unsustainable sectoral structure. Some previous studies have focused on sustainability in fashion or clothing supply chains (e.g. Armstrong & LeHew, 2011; De Brito et al., 2008; Nagurney & Yu, 2012). However, to the best of the authors knowledge, no existing study has combined the generic conceptualization efforts of SSCM with real life applications in fast fashion supply chains.

To investigate claims about unsustainability in fast fashion sup- ply chains, this study conducted a content analysis of the sustain- ability reports of fast fashion companies to analyse their SSCM implications using the theoretical framework derived from Seuring and Müller (2008). The study sample was chosen from companies operating in the textile and apparel sector in Europe whose sus- tainability reports are prepared in accordance with the guidelines of the Global Reporting Initiative (GRI). The study tries to explore and measure the leniency of the overall practical implications in this industry with reference to the dimensions of the theoretical model. In doing so, it contributes to the literature by combining theory with practice through evidence derived from real fast fash- ion supply chains.

The first section presents a theoretical review of the fast fashion industry, its supply chain strategies, and prominent practices. This section ends by introducing the study’s theoretical framework. The following section explains the methodological steps followed to conduct the study before the findings are presented in relation to the study’s proposed framework. The article ends with a discussion of the implications of the study, with some conclusions for both practitioners and scholars.

Literature review

Fast fashion supply chains and sustainability issues

Current organizational changes in the fashion industry started approximately 30 years ago when the traditional luxury fashion industry’s long-established stable structure was challenged by sev- eral environmental changes, particularly globalisation, changes in its customer base, and the entrance of competitors into previously protected markets (Djelic & Ainamo, 1999). Until then, the fashion industry had followed a fixed calendar of trade fairs and shows presenting the forthcoming season’s trends (Birtwistle, Siddiqui, & Fiorito, 2003). This made it possible to forecast demand as long as a year before the time of consumption based on previous sales data (Guercini, 2001). Under the impact of specific factors, this stable situation has evolved towards a new model called ‘‘quick fashion’’ (Guercini, 2001), ‘‘street fashion’’ or fast fashion Doeringer and Crean (2006).

Fast fashion is characterized by the transformation of trendy design into articles that can be bought by the masses (Sull & Turconi, 2008). This industry aims to attract customers into stores as frequently as possible in order to increase the frequency that they purchase fashionable styles (Barnes & Lea-Greenwood, 2006). This is achieved through low cost and low price apparel that remains on the shelves for a shorter period of time than the traditional clothing industry (Bhardwaj & Fairhurst, 2010). This leads to shortened market cycles, more seasons and several organizational buying requirements, such as highly flexible man- ufacturing and design capabilities, blending trendy clothing raw material and supplies, at very short lead times (Barnes & Lea-Greenwood, 2006).

As consumers of clothing industry products became more fash- ion-conscious (Bailey, 2001), the simple standardized designs pro- duced for the masses were rendered useless, leading to the elimination of mass production in the fashion industry and a change in fashion supply chain structures (Doyle, Moore, & Morgan, 2006). Until the 1980s, the fashion supply chains had been strongly protected by large retail stores to competition out of the markets (Barnes & Lea-Greenwood, 2006). However, they then started to be replaced by buyer oriented, strategically linked, highly responsive, low cost supply chains with shorter lead times (Tyler, Heeley, & Bhamra, 2006). Such structural changes were achieved through the utilization of just-in-time strategies, agile supply chain structures (Bruce et al., 2004) and information driven strategies, such as quick-response systems monitoring real-time data at sales points, and responding quickly to current market information (Christopher et al., 2004). Bruce and Daly (2006) argue that even established supplier-buyer relations in the fast fashion industry should have a short-response nature in order to apply both lean and agile supply chain strategies, while their internal functions should be integrated in order to expedite a smooth buy- ing process. However, these changing circumstances and new ways of doing business in the fast fashion industry have had negative impacts on both environment and society. In order to respond to these increasing environmental and social problems, fast fashion companies have started to adopt sustainable strategies and practices.

One of the most important factors stimulating the rise of sus- tainable practices in fast fashion supply chains has been globaliza- tion of both sourcing and distribution. According to MacCarthy and Jayarathne (2010), in the last 30 years, textiles manufacturing has shifted significantly to less developed countries. For example, 42 percent of the EU27’s clothing imports were supplied by China in 2012, with Bangladesh and Turkey accounting for a further 13% each (EC, 2013). The list of countries exporting textiles to Europe is interesting for the wide range of locations of the top ten import partners. Although the EU’s overall textile imports are dominated by faraway countries, there are also close trade partners support- ing the changing pace in the industry. However, even companies like Marks & Spencer and Zara, which used to depend on domestic sourcing, have expanded their sourcing strategies to countries such as China, India, Bangladesh, Morocco or Turkey to find manufactur- ers that can comply with new flexibility and design requirements (Tokatli, 2008; Tokatli, Wrigley, & Kızılgün, 2008).

The globalization of the industry has affected supply chains in two different dimensions. Firstly, the relocation of manufacturing sites had a negative impact on traditional European industries like spinning and weaving, resulting in unemployment for European textiles and clothing industry workers (De Brito et al., 2008; Taplin, 2006). Although companies in Western countries still own major fashion retailers and the brands (MacCarthy & Jayarathne, 2010), the number of workers in these countries employed in the sector has declined according to EURATEX (2013) statistics: for example, – it declined by 3% from 2011 to 2012.

D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849 839

The second important impact of the extended fashion supply chain is the heavy environmental burden it imposes from in- creased transportation mileage. This is exacerbated by the time pressure on fast fashion industry orders, which means that the majority of shipments are delivered by air, significantly increasing CO2 emissions (Saicheua et al., 2012).

Apart the impact of globalization, the nature of the industry itself imposes further environmental and social burdens. Production pro- cesses in the textiles industry use chemicals and non-renewable natural resources that harm the environment (De Brito et al., 2008). Increased time pressures on the order cycles of the fast fashion industry result in employee abuse and other unethical working practices at manufacturing sites (Barnes & Lea-Greenwood, 2006). The majority of fashion industry labour is located in offshore countries and composed of young, poorly educated people, since the manufacturing process in this sector does not require high skills. Women and children make up the majority of the workforce in developing countries, since these disadvantaged people accept work at lower wages. In addition, there is a significant amount of forced labour in certain countries, such as Bangladesh (Viederman, 2013). Within this employment structure, the workforce is highly vulnerable to discrimination, bad treatment, low wages and long working hours (Ichimura, 2011).

De Brito et al. (2008) divide fast fashion companies into two main groups. The first group is composed of those companies that resist sustainability practices and simply try to survive in a highly demanding environment. The second group is composed of compa- nies trying to adopt and improve sustainability through their supply chains by the utilization of tools such as eco-labelling, man- agement systems, environmental and social audits, communities of practice, fair trade and clean transportation modes. However, con- sidering the negative environmental and social impacts of this industry, there is a need for a sector-wide recognition of the latter group’s strategy. In order to take strategic action, fast fashion retailers take different measures and communicate these through their sustainability reports.

For example, the global fast fashion retailer H&M states that they are implementing intensive sustainability practices in their procurement, stakeholder management, human resource manage- ment and environmental processes (H&M Conscious Actions., 2012). Similarly, Inditex Group lists a series of strategic actions within their environmental plan for 2011–2015, covering actions such as eco-efficient design of stores, reduced environmental im- pact of logistics activities, eco-friendly products, etc. (Inditex Group, 2013). In accordance with their Code of Practice principles, Next states that they conducted 1647 audits in 570 suppliers that they worked with in 44 different countries during 2012 (Next CSR Report., 2013).

The theoretical framework

Existing SSCM research on the fast fashion industry has focused on the introduction of qualitative and quantitative sustainability indicators that apply to both internal and external supply chains (De Brito et al., 2008), the study of consumer perceptions and behaviour towards sustainable fashion supply chains (Bhardwaj & Fairhurst, 2010), and the use of awareness-raising practices through celebrities for the slow fashion movement to involve con- sumers in building a more sustainable supply chain (Pookulangara & Shephard, 2013).

Despite these various and increasing efforts to integrate sus- tainability into fast fashion research, a wider perspective on the industry seems to be missing regarding the existing applications. The annual reports that companies use to communicate their sus- tainability practices through corporate reporting schemes annually can be invaluable sources for exploring industrial practices. To

bridge the gap in the literature regarding effort wider perspective, this study draws on an SSCM framework to conduct a frequency content analysis on the sustainability reports of leading fast fash- ion companies to measure the leniency of these practices.

The SSCM framework employed in the study is developed from Seuring and Müller’s (2008) theoretical approach towards the con- ceptualization of SSCM. After reviewing the existing literature on SSCM, Seuring and Müller (2008) develop a conceptual framework with three main parts. The first part identifies the triggers and incentives stimulating the focal company to adopt SSCM practices. These generally come from overall stakeholders, customers and especially governments. The focal company then passes these sus- tainability pressures onto its suppliers through two norm strategies.

Seuring and Müller (2008) build their framework on Bowen et al.’s (2001) division between ‘‘greening the supply process’’ and ‘‘product-based green supply’’. They propose supplier evalua- tion for risk and performance and SCM for sustainable products as the other two parts of their framework. These are two comple- mentary norm strategies, with the adoption of one able to lead to the achievement of the other in certain cases. The sub-dimensions of the two norm strategies have been schematized for a systematic exploration of SSCM applications in large manufacturing compa- nies operating in Turkey (Altuntas & Turker, 2012). Fig. 1 shows these sub-dimensions.

According to Seuring and Müller (2008), supplier evaluation for risk and performance focuses on associated risks and barriers along the supply chain as well as performance concerns from an internal perspective. This is connected to a supplier assessment plan where monitoring, auditing and evaluation take place. This assessment process has two objectives: improving the overall performance of suppliers, and avoiding risks in the supply chain. Dependency, flex- ibility, quality and speed are the important criteria for measuring improvements in supplier performance, while the possible risks are evaluated according to the dimensions of the triple bottom line.

On the other hand, life cycle assessment is a widely used tool to achieve SCM for sustainable products ‘‘to comprehend all kinds of products that have or aim at an improved environmental and social quality, which can be related back to the already mentioned imple- mentation of environmental and social standards’’ (Seuring & Müller, 2008, 1705). It demands various minimum criteria require- ments from suppliers when designing or producing the products. In addition, sustainable products require intense communication with suppliers while improving their sustainable practices. To emphasise that management systems play a crucial role within the entire system of SSCM, they are placed at the heart of theoret- ical framework in Fig. 1. By integrating all these factors within a theoretical framework, it is important to analyse fashion compa- nies with reference to their actions regarding these factors in order to evaluate how they cope with the fast fashion-sustainability dilemma.

Methodology

Sample selection and data collection

The population for the study includes firms operating in the fast fashion sector around Europe. In order to obtain a comparable data set, the sample was chosen from firms preparing their sustainabil- ity or corporate social responsibility (CSR) reports in accordance with the guidelines of the Global Reporting Initiative (GRI). Devel- oped through a multi-stakeholder process, this framework helps organizations assess their economic, social and environmental per- formance and impacts (GRI, 2013a; GRI, 2013b). The GRI database was searched for reports of firms operating in Europe’s textiles and

SCM for Sustainable

Products SSCM

SCM for Risk and Performance

Supplier Assessment Plan

Product Life Cycle Assessment

Avoding risks

Improving supply chain performance

Speed

Dependency Flexibility

Quality

Economic

Environmental

Social

Improving Suppliers

Training

Communicating with Suppliers

Criteria for Suppliers

Environmental Social

Management System

Fig. 1. The theoretical framework. Note: Supply chain management (SCM); sustainable supply chain management (SSCM). Source: Altuntas and Turker (2012) adapted from the study of Seuring and Müller (2008).

840 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

apparel sector within the last 3 years (GRI Database, 2013a; GRI Database, 2013b), providing a total of 20 reports; however, some of them were reports from the same companies in previous years, while others were non-English so were excluded due to translation difficulties. This left 9 reports for the analysis. Although 3 of these companies (Oberalp, Puma and Switcher) focus specifi- cally on sportswear, they were included in the analysis because they operate under similar conditions to other companies in the fast fashion industry. That is, the shortened seasonal cycle, market pressures and similar globally-dispersed supply chain structures mean that sportswear brands can also be taken as part of the fast fashion sector. Today, many sportswear brands focus on shortening their lead times in order to meet the challenge of quick response requirements in a fiercely competitive market (Taylor, 2008). Since the reports analysed in this study cover the period 2011–2013, they were prepared in accordance with the old versions of GRI guidelines. GRI has launched its most current generation of guide- lines (G4 Guidelines) in 2013 while continuing to recognize reports prepared before based on previous versions of G3 and G3.1 till the end of 2015 (GRI, 2013a; GRI, 2013b).

Analysis method

Content analysis is used for making ‘‘replicable and valid infer- ences from texts (or other meaningful matter) to the contexts of their use’’ (Krippendorff, 2004, 18). In the current study, the re- ports were analysed and interpreted with the particular intention of exploring the corporate sustainability of companies along their supply chains in the face of increasing pressures of fast fashion trends in order to determine whether this sustainability focus matches the theoretical framework of Seuring and Müller (2008). Therefore, the relevant texts in the reports were connected and conceptualized with this main research question to reveal the exis- tence or not of various patterns through the use of some specific words, concepts, themes, etc. The main categories and sub-codings were provided by the dimensions of SSCM identified in the frame- work of Seuring and Müller (2008) within the twofold strategies of ‘‘supplier evaluation for risk and performance’’ and ‘‘SCM for sustain- able products’’ (Weber, 1990) More specifically, the content analysis relied on five main concepts drawn from the framework of Seuring and Müller (2008), as shown in Fig. 1: (1) avoiding risks, (2) supply chain performance, (3) criteria for suppliers, (4)

communication with suppliers and (5) improvement of suppliers. First, texts (sentences, paragraphs, and sections) related with the company’s overall SCM approach were recorded on a separate sheet from the main reports for further analysis. In the next step, sentences that included these 5 sub-codes were identified and as- sessed as to whether they are actually used in accordance with the framework of Seuring and Müller (2008) and how they are articu- lated and practiced by the company. That is, the coding process aimed to provide both quantitative and qualitative information about the on-going SSCM approach of the 9 companies. In doing so, while the existence and frequency of each category was mea- sured throughout the texts (Bailey, 1994), new categories were also identified to explore new trends and changes in SSCM. In order to ensure the reliability of the coding process, each text was inves- tigated independently by two researchers. In the case of disagree- ment during this process, the dispute was resolved through the involvement of a third researcher (Weber, 1990, 17).

Overall findings

Table 1 presents the overall information about the companies and their reports. Such reports are usually named as sustainability or related terms, with sustainability in the supply chain being a core activity for almost all companies. For instance, in Calida’s 2011 report, supplier management was the primary activity during the reporting period. The content percentage of supply chain issues was between 10.34% and 34.42%, measured as frequency count of the keyword ‘supply chain’ across all reports. Once the keywords were detected, the number of words in relevant sentences was compared to the overall word count of the analysed report. Not only large companies, like Inditex, H&M, and Puma, but also some relatively small companies (Calida and Switcher) elaborately ex- plained their practices during the reporting period. Based on the quantitative results of content analysis, it can be stated that SSCM is becoming a critical issue for almost all companies in the sector.

The positioning of SSCM within the report is also an indicator of the priority given to the issue. Most companies directly provide an explanation about SSCM under a separate title within their reports and 6 companies mention their suppliers as partners with whom the company wants to establish long-term relations. Depending on the continuity of trusting relations, while H&M, Inditex and Puma called some suppliers strategic partners, other companies

Table 1 Overall information on company reports.

Firm Headquarter Title of report Period Total pages

Content%a Supplier definition

Supplier positioning

Number of suppliers

Geographical distribution of suppliers

Calida Sursee/ Switzerland

Corporate social responsibility

2011 33 29.28 Partners Direct [Corporate social responsibility/ supplier management]

N/A [90% of its production is coming from 5 producers]

Production: Europe 66% [Hungary (own factory) 40%; Hungary (sub-contractors) 14%; Other countries (Bulgaria, Romania, Poland, Italy, Turkey) 12%]; Asia 34% [China 32%; India 2%] Procurement: Europe 63%; Asia 37%

Mango Barcelona/Spain Sustainability report

2012 58 10.34 Member in their group of interest

Direct [Our sustainability policy and model/the supply chain and suppliers]

264 suppliers of garments and accessories

Purchases: China 41.66%; Turkey 12.4%; Morocco 5.87%; South Korea 9.38%; Spain 7.69%; India 5.42%; Bangladesh 5.81%; Vietnam 3.88%; Italy 3.70%; Taiwan 1.33%; Pakistan .89%; Portugal .84%; Indonesia .31%; Others .82%

C&A Brussels/ Belgium

Acting sustainably. C&A 2012

2012 156 20.38 Partners Indirect [Mentioned under related titles]

785 merchandise suppliers

Procures: China 30.30%; Bangladesh 25.10%; India 7.8%; Turkey 6.5%; Indonesia 4.2%; Cambodia 3.9%; Vietnam 2.9%; Sri Lanka 2.8%; Pakistan 2.6%; Romania 1.5%; Others 12.4%

H&M Stockholm/ Sweden

Conscious actions sustainability report 2012

2012 93 31.18 Partners Direct [Commitments- 2. Choose and reward responsible partners]

785 suppliers [148 strategic partners make 53% of products]

N/A [The list of suppliers were given in the company web site/; but the share of each country is not provided]

Inditex A Coruña/Spain Annual reportb

2012 61c 34.42 One of its most important stakeholders

Direct [Challenges and perspective/ sustainable supply chain]

1434 [During 2012, 474 suppliers are excluded, 418 are included into chain]

Purchases: Africa (Morocco) 112; America (Argentina, Brazil) 68; Asia (Bangladesh, China, India) 672; Non-EU Europe (Turkey) 136; European Union (Spain, Portugal) 446

Marimekko Helsinki/Finland Yearbook 2012

2012 40 12.74 Long-term partners

Direct [Responsible procurement]

N/A [70% of the products are made by the 25 biggest suppliers]

Manufacturing: EU countries (Finland 34%, the Baltic countries 31%, and Portugal 11%) 79%; Non-EU countries (Thailand, China, India) 21%

Oberalp Bolzano/Italy Sustainability report 2013 [The Individual in Focus]

2013 87 11.49 Long- standing partners

Direct [Implementation of sustainability/ suppliers]

82 [38 Apparel suppliers in Salewa group]

Apparel (Value in Euro) in Salewa: Bangladesh .34; China 26.32%; Germany .05%; Greece .38%; Indonesia 4.96%; Italy 1.5%; Lithuania .24%; Myanmar 1.31%; Mauritius .30%; Turkey .29%; Vietnam 3.82%.

Puma Herzogenaurach/ Germany

Business and sustainability reportb

2012 86c 27.90 [Strategic partners]

Direct [Under safe ecology, safe humanity]

500 Active facilities in 42 countries [Approximately 47 of Tier 1 factories are strategic partners]

N/A [Sourcing countries by number of audited Tier 1 facilities are China (174), India (36), Vietnam (34), South Korea (12), Turkey (13), Bangladesh (11), Cambodia (11) and Argentina (8)]

Switcher Lausanne/ Switzerland

Report 2011 [Social, Environment, Economy]

2011 56 23.67 Stakeholders Direct [Under traceability, social issues, environment]

21 suppliers Production Factories: India 70.9%; China 14.3%; Romania 7.4%; Portugal 5.7%; Turkey 0.9%; Taiwan 0.8%

a The percentage of SSCM related content in the report is found through the word counts. b The report includes the disclosures on both business operations and sustainability issues based on GRI framework. c The number of page for only the sustainability related part of the report.

D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849 841

reported being proud of having such a long-term relationship. For instance, Calida stated that the company ‘‘relies on a small number of long-term relationships with its suppliers. This means that 90 percent of its products come from just five producers’’, while Switcher ‘‘favours a long-term partnership with its suppliers in

order to establish a relationship of trust and co-operation. Our rela- tionships last 6 years on average’’.

The number of globally dispersed suppliers varies based on the size of companies. The most important suppliers are in developing countries in Asia (China, India, Bangladesh, Cambodia, and Vietnam

Table 2 Content analysis.

Firm Objective Performance Risks Improvement Communication Criteria (Compliance system, monitoring, auditing)

Calida Ensure the good manufacturing conditions, same quality, same know-how along the value chain and set long-term relationship with suppliers

Quality, continuity, monitoring and reporting, ecology, ethics, know-how

� Social: good manufacturing conditions � Environmental: product safety,

ecology, ethics, recycling, cross- docking system � Economic: quality, local eco-

nomic development, fair procure- ment prices and living wages

Training, know-how transfer, helping suppliers to develop solutions, support

� Long-term cooperation with suppliers on a partnership basis � Supplier visits, personal cooper-

ation, production rooms, con- sidering cross-cultural differences

� Mandatory/compliance to BSCI and Oeko-Tex Standard 100 [The suppliers showing no progress in spite of checks are excluded] [5 of them signed conduct] � Due to a change of supplier or

late renewal of certificates only 4 out of 13 suppliers have cur- rently been audited

Mango Maintain the compliance of Code of Conduct and ‘‘made in Green’’ certification among suppliers; Creating synergies throughout our entire manufacturing chain

Quality, safety (laboratory tests), monitoring and reporting

� Environmental: cross-docking system (reducing consumption and costs), quality and safety in the use of chemicals, networking (joined the Detox initiative being promoted by the Greenpeace organisation, which consists of the banning or substitution)

Training (CSR teams), technical support, exchanges of ideas

� Long-term collaboration/rela- tionship of mutual trust � Supplier visits

� Mandatory/Company’s Code of Conduct (Based on UN Global Compact, Universal Declaration of Human Rights, UN Rights of the Child, ILO) � First, the supplier’s written decla-

ration of the use of products and substances in manufacturing. Then, laboratory test on the selected samples. (Not apply – if the manufacturers provide the Oeko-Tex certification for the fabrics) (Internal and External Audit)

C&A Provide fair and honest dealing; Offering long-term prospects to its suppliers and the greatest possible degree of safety for all employees

Monitoring and reporting

� Social: good manufacturing con- ditions, child labour, discrimina- tion, migrant workers, CSR (The C&A Foundation’s sustainable supplier programme in Asia to improve the well-being of people) � Environmental: product safety,

hazardous chemical, organic farming � Economic: contributing local

economy

� Training, advice and support, knowledge transfer (for compliance) � SOCAM held 7 work-

shops for buying office, 38 in C&A’s own buying centers, 5 in-depth sem- inars for groups of suppliers

� Long-term, trusting business relationships with its contract partners � C&A Fairness Channel (Direct

contact with top management), announcements, posters, value chain conferences on organic cotton, using GIN in-house communication platform � 77 individual coaching sessions,

37 counselling meetings were held in 2011

� Mandatory/Compliance to Code of Conduct for the Supply of Mer- chandise; Monitored by SOCAM team; Oeko-Tex Standard 100 � Quality Assurance System: Three

stages of Sampling inspection, Quality conformity check, Struc- tured quality checks for all suppliers � SOCAM conducted 1724 audits in

25 countries

H&M Ensure high social and environmental standards throughout the value chain; set long-term relationship and mutual growth

� Sustainability, quality, speed (lead times), prices, monitor- ing and report- ing, rewarding � Supplier sus-

tainability per- formance index (ICoC) increased from 76.5 to 78.4 during 2012

� Social: Wages, gender equality, worker’s rights, reduce overtimes promoting social dialogue, gen- der equality, CSR [Extended All for Children collaboration with UNICEF to include Bangladesh: 5 year support one million people around Dhaka (8 million USD)] � Environmental: Product safety,

working on taking the Ginetex care label standard; R&D Collabo- ration with chemical manufac- turers to find water-based alternatives in leather produc- tion; Engaged 154 supplier facto- ries in energy efficiency programmes; monitor water effi- ciency in factories

Training (for workers in Bangladesh about their rights/fire safety), empower suppliers

� Close collaboration; long-term/ strategic relations based on trust and transparency � Clear communication, supplier

visits, providing the full list of suppliers, research [Supplier Satisfaction Survey (423) and Interviews with garment work- ers (9815)]

� Mandatory/Compliance to Com- pany’s Code of Conduct (Sustain- ability Team work directly with suppliers to support them in complying it) � Initial Assessment: New partners

must comply the minimum requirements, after training if there is a progress, a compliance screening process starts, then an in-depth head audit is conducted by company auditors; Meet wastewater quality of Business for Social Responsibility Water Group � Conducted 2646 audits and 1588

management system analyses at supplier factories/485 audits at potential supplier factories

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� Economic: contributing to eco- nomic growth, jobs and stability, CSR [Together with IF Metal (Sweden’s largest union), start up a project on labour relations and trained 179 human resource personnel in Cambodia]; net- working (CEO met the Banglade- shi Prime Minister about wages)

Inditex � Strengthen and ensure a sus- tainable supply chain, but also striving for a positive impact on the communities where this is located � Following the framework of

the strategic plan, Sustainable Inditex 2011–2015

Competency, monitoring and reporting

� Social: child labour, fire preven- tion, networking (Signed a letter addressed to the Prime Minister of Bangladesh calling attention to fire prevention) � Environmental: water manage-

ment, networking (A member of the ETI) � Economic: Creating a positive

social and economic impact that contributes to the development of the communit; networking (Signed with IndustriALL ‘‘Proto- col to specify the role of trade unions in the enforcement of the IFA within Inditex’s supply chain’’)

Training (113 external auditors were trained using the procedures carried out by Inditex)

Aid direct communication with its suppliers and multilateral dialogue with the bodies and institutions that work in these areas

� Mandatory/Compliance to the Company’s Code of Conduct for Manufacturers and Suppliers (The Ethical Trading Initiative, the UN Global Compact and the Framework Agreement with IndustriALL Global Union); Indi- tex’s Chemical Substances Guide � Updated the Code by incorporat-

ing best practices � Pre-assessment (113 audits);

Social audits based on Code of Conduct and the Tested to Wear methodology (3513); The Correc- tive Action Plans (from 6 to 24 months) � Auditors were accredited by SAI

as SA8000 auditors Marimekko � Objective: Ensure the high

quality of products as well as responsible operations throughout the supply chain (strategic suppliers in risk countries covered by BSCI and audited by the end of 2015) � Following corporate responsi-

bility strategy for the period 2011–2015

Audits, supplier certification

� Social: working conditions, human rights, the transparency of the supply chain, child labour, fair pay, working hours; network- ing (Joined the Responsible Sourcing Network Initiative against child/forced labour in Uzbekistan) � Environmental: networking

(Joined the Nordic Initiative Clean and Ethical project coordi- nated by the Nordic Fashion Association)

N/A N/A (Overall communication with stakeholders)

� Mandatory/Company procure- ment contract (BSCI’s Code of Conduct); Use certified suppliers (the ISO 9000 and ISO 14000, SA 8000, Öeko-Tex Standard 100, BSCI Audited) � Joined BSCI and committing itself

to increasing supplier factory audits � Marimekko aims to use certified

suppliers and to invite suppliers to join the BSCI auditing system (18 suppliers-ISO 14000; 4 sup- pliers-SA 8000; 10 suppliers-BSCI Audited)

Oberalp Establish a stable and well- functioning supplier network that pursues common aims and engages in a continual collaborative exchange with its members

Compliance, monitoring, auditing

� Social: social aspect/social responsibility [One of the four CSR project team’s working group focus on supply chain (5 people); CSR Projects in Bolivia for living conditions], corruption, labour conditions, child labour, discrimi- nation, wages, overtime, transparency � Environmental: safety,

environment

N/A Regular contact and communication, meeting (Supplier Conventions in every 2-3 years), involving suppliers into company management information system

� Mandatory/Company’s Code of Conduct (Based on ILO Convention) � Updated the Code of Conduct � CSR Supplier audit: Regular

checks by management and qual- ity assurance team; After factory self-assessment form, production facility inspection (audit-docu- mentation), the preparation of Corrective Action Plan to ensure compliance with requires stan- dards (Till April 2014, completing audits on 60% of production),CSR team involved in supplier selection

(continued on next page)

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Table 2 (continued)

Firm Objective Performance Risks Improvement Communication Criteria (Compliance system, monitoring, auditing)

Puma � Objective: Improve the social, working and environmental conditions both at our supplier factories around the world and within PUMA’s own operations � Following Puma Environmen-

tal Policy

The PUMA Sustainability Charter – PUMA’s 2015 Scorecard performance target, Compliance, monitoring, auditing

� Social: working conditions, wages, health and safety, net- working (Engaged with the Gar- ment Manufacturing Association of Cambodia and the AAFA in Cambodia); CSR for improving wages in Asia (e.g. The Human Resources Management Systems Project) � Environmental: sustainable prod-

ucts, consumers’ environmental footprints, energy efficiency, net- working (In Vietnam, PUMA cooperated with the German Development Cooperation to ensure environmental and efficiency) � Economic: CSR (Play Fair Cam-

paign had its third re-launch in the Olympic Year 2012, high- lighting problems in the global supply chains of sporting goods companies)

Training on environmental performance (ConserV project in Vietnam, 58 PUMA suppliers were trained by resource efficiency), Seminars and training for 292 staff, 58 factory

Environmental performance data collection (semiannually); Presentations, open discussions, trainings and best practice sharing in Bangladesh, Taiwan, Vietnam and China were organized as a platform for exchanging and strengthening our joint expertise and communication about sustainability

� Company Code of Conduct and manuals of standards (Based on ILO); Higg Index (assess environ- mental sustainability Performance) � PUMA.Safe monitoring; monitor-

ing program that continues to be accredited by the FLA � A member of the Sustainable

Apparel Coalition since 2011. In 2012, PUMA tested 13 apparel products under the HIGG Index � 422 factory audits covering 380

facilities [62 percent of all audited facilities globally were rated A or B+] � Finalization of the Standard Oper-

ating Procedure and the forma- tion of the National FOA Protocol Committee

Switcher � Objective: to improve the working conditions and lives of workers throughout the world

Compliance, monitoring, auditing, Management systems, traceability (labels), transparency

� Social: wages, working hours and overtime, health and safety, net- working (FWF developed a web- based tool in 2011 to help brands and factories gradually improve workers’ wages; the Max Have- laar label legitimises Switcher’s social approach on wages), CSR [Switcher Foundation were granted to projects in the Tirupur and Burkina Faso (schools, clinic, fresh water, etc.)] � Environment: water saving,

waste management

Training (Compliance Days – meetings)

� A long-term partnership for a relationship of trust and co- operation � Open dialogue, meeting (Com-

pliance Days), providing the full list of its suppliers

� Mandatory/Suppliers’ Code of Conduct (Based on ILO Conven- tion/UN’s Human Rights, FWF’s Code of Conduct); Oeko-Tex Stan- dard 100; SEDEX/SMETA audit report; self-assessment of suppliers � The CSR department is involved

in the decision-making process when choosing new suppliers and audits � The company was audited by

FWF (Local FWF teams audited 3 units in India)

Abbreviations: AAFA, America Apparel and Footwear Association; BSCI, Business Social Compliance Initiative; CEO, Chief Executive Officer; CSR, corporate social responsibility; ETI, Ethical Trading Initiative; FLA, Fair Labor Association; FWF, Fair Wear Foundation; IFA, ILO, International Framework Agreement; International Labour Organization; R&D, Research and Development; SOCAM, Service Organisation Compliance Audit Management; SAI, Social Accountability International; SEDEX/SMETA, Supplier Ethical Data Exchange; UN, United Nations; UNICEF, United Nations Children’s Fund.

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SCM for Sustainable

Products

SSCM - Core objective: Ensure high social and environmental conditions along supply chain (9) - Strategic Approach on SSCM (3)

SCM for Risk and Performance

Supplier Assessment Plan

Product Life Cycle Assessment

Avoding Risks (9)

Improving supply chain performance (9)

Speed (1) Dependency Flexibility

Quality (3) Economic (5) Environmental (9) Social (8)

Improving Suppliers (7)

Training (7)

Communicating with Suppliers (8)

Criteria for Suppliers (9)

Environmental Social

Compliance to the

System/ Monitoring/

Auditing (9)

Emphasizing Benefits(3)Networking (6)

Code of Conduct

(Based on BSCI, Oeko-Tex

Standard 100, UN Global Compact, Universal

Declaration of Human Rights, UN

Rights of the Child, ILO

Convention, ETI, the

Framework Agreement with

IndustriALL, Global Union, FWF’s Code of Conduct etc.)

Supportive activities [e.g. Empower, help,

support, techical support, advise] (5)

Knowledge transfer [e.g. Know-how, knowledge on compliance/ environment] (3)

Methods [e.g. Seminar, workshops, meetings]

(3)

Long-term relationship(5)

Methods [e.g.Visits, personal cooperation, production rooms,

announcements/posters, value chain conferences, in-house communication

platform, research] (6)

Other components [e.g. Continuity/ ecology/ ethics/ know-how, safety, sustainability/ prices/ lead times, competency, traceability (labels), transparency] (5)

CSR (5)

Fig. 2. A Map of sustainable supply chain management in textile and apparel sector. Note 1: The new categories that are proposed as a result of this analysis are shown in dark shapes and their links to the original theoretical model are shown by dashed lines; the numbers assigned to each shape indicate the number of companies that are actively doing this activity; the categories that are not observed during the analysis (e.g. Dependency, Flexibility) are exhibited with a dashed box on the figure Note 2: Business Social Compliance Initiative (BSCI); corporate social responsibility (CSR); Ethical Trading Initiative (ETI); Fair Wear Foundation (FWF); International Labour Organization (ILO); supply chain management (SCM); sustainable supply chain management (SSCM).

D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849 845

etc.), some new EU members (Bulgaria, Hungary, Romania, Poland, etc.) and candidate states (Turkey). Besides these, some companies like Inditex, Marimekko, and Calida have suppliers from Europe as well. Due to the bad reputation of working conditions in develop- ing countries and the positive environmental impact of proximity sourcing, working with European suppliers can become a distin- guishing feature within a company’s SSCM approach.

Analysis and mapping

Table 2 presents the analysis of reports based on the five dimen- sions of Seuring and Müller’s (2008) framework. Based on these findings, the theoretical framework (shown in Fig. 1) was also re- vised and reconfigured for the sector (Fig. 2).

Objective of SSCM In parallel to the increasing importance of supply chains in sus-

tainable development, most companies pay special attention to SSCM. As stated above, in Calida, supplier management was the primary activity during the reporting period (2011). The main objective of SSCM was to ensure good manufacturing conditions throughout the value chain to reduce the environmental, labor and social impacts of business operations. In doing so, while some companies underline the importance of standardization along the chain (in Calida, for example, it is about ensuring the same working conditions, quality and know-how) through compliance and certi- fication (Mango, Marimekko), some others emphasise the creation of a long-term relationship (Calida, C&A, and H&M), or collabora- tive exchanges with a well-functioning these companies (Inditex,

Marimekko, and Puma) mention the adoption of a long-term stra- tegic perspective in their SSCM approach.

Risks Analysis of the reports shows that this component of SSCM is

critically important for the companies. Due to the labour-intensive nature of this sector, most organizations have expanded their oper- ations into developing countries but, as stated in H&M’s report, ‘‘the challenge is that garment production is often located where human rights are at risk and environmental awareness is less developed’’. It can be seen from the map in Fig. 2 that, while all companies mention environmental risks, 8 of them mention social, and just 5 indicate the economic risks in those countries. Some companies give specific examples of these risks and explain their response to the problems. For instance, C&A discusses the prob- lems for working people in different contexts, from migrant work- ers in China to the sumangali system (a form of forced female labour to earn a sum of money as a dowry) in India, or the child labourers and environmental problems of Uzbekistan’s cotton har- vest. Some of these problems are also on H&M’s agenda. In their re- ports, both H&M and C&A state that they are actively involved in the solution of such problems in these countries. For instance, both joined a forum and project of the Ethical Trading Initiative (ETI) against the sumangali system in India. C&A is also a member of the Brands Ethical Working Group and funds a ‘terre des homes’ project that aims to provide employment to 9000 young women in the next 4 years. Regarding the child labour problem in Uzbekistan, H&M (together with 60 other brands) signed a pledge facilitated by the Responsible Sourcing Network. However, C&A, with deeper knowledge about the problems in this country (not

846 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

only child labour, but also the case of the Aral lake, pesticide and chemical use, etc.), decided to refuse to accept any cotton from Uzbekistan for its goods ‘‘until the situation is solved and transpar- ency of the entire process is given’’.

When reporting their presence in these developing countries, some companies try to explain the benefits of their operations for these countries. For instance, in their report, C&A claim that ‘‘jobs created by the textiles and clothing industry secure the incomes of thousands of families. The ensuing economic growth increases the standard of living in many regions by providing market access to manufacturers there’’. Similarly, Calida states that ‘‘[s]ince the majority of Calida suppliers are located in economi- cally weaker regions, Calida is making a contribution to local economic development with its transfer of knowledge’’. H&M states that ‘‘contributing to economic growth, jobs and stability in our purchasing markets’’ is key for their existence in those coun- tries and ‘‘more than that, our strong presence in these countries provides us with the great opportunity to improve the lives of hundreds of thousands of people and (to) help develop entire com- munities’’. However, some stakeholders may consider such men- tions of their contribution to local communities as a cynical approach considering how much these companies gain from their presence in developing countries in terms of decreased production costs and increased.

In sum, all these examples indicate that the companies usually use three strategic tools to minimize the impact of threats and risks in developing countries. The first one is networking activities through collaborating with other organizations in the same sector, joining international or national campaigns and projects, or generally following an accepted set of standards. Secondly, the companies try to reduce the negative impacts of such social, envi- ronmental or economic risks through corporate social responsibility (CSR) projects. The third important tool is to convince stakeholders and legitimate current activities in developed countries through emphasizing how the companies’ presence in these countries can be beneficial for the local community. As Table 2 and Fig. 2 show, while 6 companies were involved in networking activities, 5 en- gaged in the CSR project.

Besides these strategic responses to risk, the companies heavily concentrate on the standardization of economic, social and envi- ronmental working conditions among suppliers through the lat- ter’s compliance in individual systems to monitor and audit their involvement in the process. Recalling the original framework (Fig. 1), it can be seen that environmental management systems have evolved into more diverse compliance systems (Fig. 2) for these companies; that is, they usually develop their own codes of conduct derived from various international standards, such as the International Labour Organization (ILO) Convention, United Na- tions (UN) Global Compact, Universal Declaration of Human Rights, etc., sector-specific organizations and guidelines (e.g. Oeko-Tex 100 standards, Fair Wear Foundation), and other initiatives (Ethical Trading Initiative (ETI), Business Social Compliance Initiative (BSCI)) to try to increase the adoption of the company’s code of conduct among its suppliers. As summarized in Calida’s report,

[a]bout a third of Calida’s finished products come from coun- tries which are riskier in terms of quality, working and environ- mental standards. Calida aims to ensure that the basic rights of employees are also protected in these countries and that due consideration is given to the environment. To this end Calida has developed a Code of Conduct which deals with issues such as child labour, discrimination, voluntary labour, working hours and fair pay.

Thus, developing and updating a code of conduct and monitor- ing its adoption by suppliers have become the major activity in

SSCM for all companies. A significant part in each report is devoted to explaining this compliance system, and this is not only because these systems are used to avoid risks; rather, companies use standardization in order to improve the overall supply chain per- formance and set significant sustainability criteria for their suppli- ers. For this reason, Fig. 2 locates compliance, monitoring and auditing activities in SSCM at the heart of all three dimensions in the model.

Performance As stated above, requiring compliance with a code of conduct

and then monitoring and auditing whether suppliers operations align with these principles is also the main focus in improving sup- ply chain performance. In their reports, companies mention the need to reach a standardized performance along the chain to in- crease quality (3) and speed (1) of operations, as well as some other issues (5) like continuity, ecological and ethical consider- ations, know-how, safety, sustainability, prices, lead times, trace- ability and transparency. Regarding performance indicators, the companies usually provide environmental data for energy and water use along the supply chain, waste reduction activities, etc., while some companies, namely Calida, C&A, Mango, Marimekko and H&M, briefly mention environmental performance, Inditex, Switcher, and Puma provide detailed information on the issue.

In its report, H&M repeatedly states that it rewards suppliers based on their sustainability involvement, which is certainly a un- ique approach to the improvement of supplier performance. Although it seems that suppliers’ improved performance is re- warded with more business, the company explains that ‘‘as a result, our some 150 strategic partners make more than 50 percent of our products’’. Thus, although it is presented as a reward, demanding more from a good performer is not a reward at all – it is just the nature of doing business. In order to call something a reward, the supplier should gain something more than usual.

Although all companies accept the importance of compliance to a system, their responses breaches identified during audits vary. For instance, while Calida reports that it can exclude non-compliant companies immediately, Inditex replaces its former ‘‘D’’ rating with a new ‘‘CAP’’ (Corrective Action Plan) to improve factories that received a ‘‘D’’ rating in 2012 since ‘‘Inditex believes that the best way to improve a factory is to support it during the process at all times, leaving the possibility of suspending the relationship as a last resort’’. Although improving and revitalizing the relationship with an existing supplier (instead of finding a new one) might be in line with recent trends in the fast fashion sector, companies should determine minimum acceptable standards and end relations when performance below threshold values. Considering accidents due to poor workplace safety standards, particularly during the last year, companies could adopt a stricter approach to their supply chains.

Criteria for suppliers As explained in the previous section, the compliance and the

commitment of suppliers to a code of conduct is viewed as the ma- jor task in SSCM to reduce risks and improve supplier performance. The code of conduct can also function to set social and environ- mental criteria for suppliers. For instance, Calida expects its suppli- ers to comply with Oeko-Tex Standard 100 and BSCI’s Code of Conduct to ensure product safety and environmental and socially responsible manufacturing conditions, covering the issues like respect for national laws, non-discrimination, collective bargaining rights, fair wages and working hours, health and safety at work, prohibition of child or forced labour, environmental and safety management systems etc., In contrast, Mango has developed its own code of conduct to ensure adequate compliance with all

D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849 847

labour, social and environmental standards on the part of manu- facturers of its garments and accessories, while Switcher has adopted the Fair Wear Foundation’s Code of Conduct, which pro- vides guidelines for its textile suppliers in areas such as labour rights and conditions. According to C&A’s report, since it can be dif- ficult to prove certain infringements and irregularities, like bribery and corruption, such companies impose monitoring and auditing procedures on their global suppliers to encourage a genuine com- mitment to ethical behavioural norms.

Communication In their reports, almost all companies emphasise the impor-

tance of establishing long-term relationship with suppliers; some of them particularly mention their desire to create mutual trust (e.g. C&A, H&M and Switcher) and build up specific know-how be- tween the parties (Calida). Communication is the key to create and sustain such a relationship with suppliers. Therefore, all companies (except Marimekko) indicate their focus on supplier communica- tion, with 6 of them briefly listing their communication methods. For instance, since 2005, Switcher has organized biannual Compli- ance Days to provide its suppliers with training and updates, while Oberalp Group has organized Supplier Conventions every 2–3 years to inform its suppliers about new developments. On the other hand, Calida and H&M use a wide range of tools to com- municate, including visits, personal cooperation, production rooms and research. Of these companies, C&A gives significant attention to supplier communication, using an in-house communication platform called General Information Network (GIN) to inform sup- pliers about quality assurance standards; it also uses communica- tion to uncover ethical misconduct in suppliers operations. Based on its First-to-Know policy, C&A has created a communication channel for whistle-blowing, the C&A Fairness Channel, which pro- vides direct access to a top management team in Europe to notify them about critical issues concerning the company’s economic and ethical integrity. The company use also announcements like no- tices and posters to inform suppliers about misconduct, such as bribery, fraud, nepotism, exploitation, discrimination and sexual harassment.

Since suppliers in the sector are now widely distributed across many countries with different cultures, companies may need to adopt a cross-cultural perspective in their communication ap- proaches. This is particularly important considering cases where international operations have failed due to culture clashes. To pre- vent such problems, Calida, for example, informs its suppliers in China and India about its product quality standards in the face of the challenge of cross-cultural differences regarding know-how transfer, while trying to understand the suppliers’ point of view in Asia.

Communicating information about supply chain operations with other stakeholders has become important for a number of companies. In order to ensure transparency in communicating on supply chain issues, some companies, such as H&M and Switcher, have started declaring the name of their suppliers, while others like Oberalp have begun preparations to provide all information about their suppliers and individual factories. This policy of trans- parency is seen in several reports. For instance, both H&M and Inditex give their reaction to the tragic fires in Bangladesh garment factories. Inditex specifically gives details of the recent fire in Dhaka, Bangladesh on January 26, 2013 at one of its supplier factories and the company’s response to the accident. It cancelled its relationship with the supplier concerned. According to media reports, after the Rana Plaza building collapse on April 24, 2013 in Bangladesh, various companies, including H&M, C&A and Inditex started work on an agreement concerning fire and building safety (Ek & Kane, 2013). Puma reported details of a strike for improved benefits at its supplier in Cambodia (Kaoway Sports Ltd) on February 20, 2012. As the report explains, although ‘‘the factory

management agreed to meet the workers’ demands’’, the protest- ers brought down the gates of the company and, as a result, three female workers were injured by gun shots of the military authori- ties. In its report, Puma describes how these wounded workers were recovering, stating that ‘‘throughout the year, Puma worked with industry peers and local stakeholders as worker unrest continued to become increasingly violent’’.

Improvements As with the previous category, improvements are explained

very briefly or not at all in the reports. Marimekko and Oberalp, for example, provide no information about supplier improvements. For other companies, training becomes the main activity for informing suppliers and improving their performance. Beside this, the companies state that they support their suppliers (5) through empowerment, helping them develop solutions, advising and pro- viding technical support, and enabling knowledge transfer (3) on compliance and environmental issues.

Conclusion

As H&M’s report puts it, all companies today want to be ‘‘a lea- der in terms of innovation, sustainability, and of course, great fash- ion’’; however, as product ranges and the need for external suppliers grow, it is becoming increasingly difficult for companies to manage and monitor their supply chain activities and ensure quality standards along the chain. In the fast fashion industry, companies usually procure their raw, semi-finished and finished materials from developing countries in order to take advantage of low input costs. However, this opportunity turns into the main challenge in the current state of SSCM because the social and envi- ronmental conditions of their suppliers in developing countries are not as good as those in developed countries. This means there is al- ways a risk for the company, and it seems that all these companies have calculated possible return and initially decided to accept this risk. However, considering the increasing social and environmental concerns among consumers and society at large, the risks involved in supply chain operations have increased so that they are starting to threaten their reputations, and financial returns. Therefore, most companies today in the fast fashion industry have started to focus on SSCM activities. This study attempted to conceptually map their current SSCM approaches using a theoretical model to reveal their overall approaches to sustainability.

The results of the study reveal that the companies pay signifi- cant attention to reporting their sustainability activities in SCM. Using Seuring and Müller’s (2008) model, the study shows that these companies particularly focus on integrating suppliers into their system so that they adopt their sustainability approach ade- quately. In doing so, they have developed their own codes of con- duct based on generally accepted principles of the world business community or society at large, and expect significant commitment and compliance from their suppliers. Additionally, the companies carefully review the progress of these suppliers through monitor- ing and auditing activities during the reporting period. Therefore, it can be claimed that compliance, monitoring and auditing are the main component of current SSCM to avoid risks, improve sup- ply chain performance and set clear criteria for suppliers.

Although these independent initiatives have significantly im- proved sustainability practices in the sector, it seems that there is still a lot to do for the concept to be internalized by companies throughout the supply chain and embed them into the core philos- ophy of the triple bottom line. There is a need to adopt a macro perspective and implement sector-wide strategies that lead to a deep restructuring along company supply chains that would enable a performance paradigm change in the industry (De Brito

848 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

et al., 2008). For instance, companies in the sector could integrate their code of conducts into a single sector-specific framework and develop an overarching set of principles on SSCM. This would not only be important to provide a coherent and consistent compliance system for existing and potential suppliers in all countries, but would also help overcome the problems caused by the fragmented nature of current compliance systems. In the long run, increasing cooperation and collaboration among the actors in the sector can also help in the transition to a sustainability paradigm (Pookulang- ara & Shephard, 2013) and to disseminate the main idea of sustain- ability to all relevant stakeholders.

Companies can also develop various strategic responses to re- duce risks. While actively communicating their contributions to the local public and workers in the suppliers’ countries, companies are involved in CSR or networking activities. Considering the increasing demand for suppliers, it might be expected that compa- nies can proliferate and enrich their activities and find new ways of being sustainable along the chain. For instance, following the suggestions of Saicheua et al. (2012), they might actively involve consumers as the final step in the supply chain through macro- marketing strategies. As a long-term strategy for all companies in the sector, changing consumer preferences and creating positive attitudes towards sustainability can ultimately increase the overall sustainability performance of sector. Particularly those companies producing luxury fashion products can take a leading role in initi- ating such a change in the sector (Joy, Sherry, Venkatesh, Wang, & Chan, 2012).

Power in the fast fashion industry has shifted towards consum- ers from retailers (Barnes & Lea-Greenwood, 2006), so if they de- mand sustainability, it will supposedly have a strong impact on industry practices. For instance, the recent trend for slow fashion (Fletcher, 2010; Johansson, 2010; Pookulangara & Shephard, 2013) aims not to eliminate fashion and clothing from consumers’ lives but to change the way it is realized today. However, considering the increasing demand of consumers for fashion products and the desire of producers to obtain better financial results, it might be expected that the slow fashion concept cannot be widely recog- nised by the sector’s leaders. Given the sustainability challenges of this sector due to the expansion of its operations throughout the developing world, companies might try to find new solutions and take other measures to remain sustainable yet still fast.

This study is subject to several limitations. The first is the sam- ple size. Although it provides useful insights for both scholars and practitioners, there is a need for new studies that deepen the re- sults of this study by analysing more company reports and other company documents. Second, since the study relies only on com- pany reports, it shares the limitations of similar studies analysing company publications, namely that words might speak louder than actions. Siegle (2013) states that ‘‘fashion brands are peculiarly good at constructing their own reality and narrative. After all, that’s why millions of consumers love them with slavish devotion’’. Therefore, qualitative research like the current study should be backed up with further quantitative studies. Studies based on real data about suppliers or measurements of actual sustainability per- formance can further the discussion in the literature and help prac- titioners determine their own weaknesses in order to improve their performance.

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