Top Models for Sustainable Fashion Supply Chain Management

Today is Earth Day, so I would be remiss if I were not to post about supply chains and the environment.

When I say "top models" I am speaking not of the three-dimensional kind that are featured in the media and ads and on the covers of glossy magazines (and you may be able to name your favorites either male or female), but, rather, I am referring to mathematical models, based on which we can make important decisions. Yes, some of my colleagues in operations research and the management sciences still hold on to their t-shirts with the logo "We Do It With Models."

Also, despite what today's The New York Times is reporting about declining sales of green consumer products (except in the case of "good" deals), sustainability matters.

Fast fashion and the apparel industry is global in nature -- of course, everyone wears clothes, and for those of us who live in New England, we wear different clothes, based on the season, and sometimes lots of layers of them.

Fashion and apparel supply chains are fascinating, and involve decision-making regarding global outsourcing versus in-house production and quick-response.

Also, today, we are living in a world where the competition is not among firms but among supply chains and, given the same price, what would a socially-responsible consumer do -- she would purchase the product that made less of a negative impact on the environment!

As for the models that we have been developing, they include supply chain network models for competition among different fashion brands with sustainability, also available from the publisher, the International Journal of Production Economics, as well as multicriteria decision-making supply chain network models that capture time versus cost tradeoffs, which will appear as the lead chapter in the forthcoming book: Fashion Supply Chain Management: Business and Industry Analysis.

Above is a photo of what I consider to be a very special gift, given to me by the participants in a workshop that I organized at the Rockefeller Foundation's Bellagio Center on Lake Como in Italy, a fashion design mecca. The beautiful scarf with butterflies was made there locally and the silk was spun by silkworms! In fact, I find it too beautiful to wear and consider it art and a remembrance of a very special time.

And then there is Nancy Judd, an environmental educator and designer, who creates fashions out of recycled materials, including trash, some of which can then be put back in the compost pile!

Deriving Guilty Pleasure from Doing Research on Fashion Supply Chain Management

Research is hard but research can also be a lot of fun!

When opportunities come your way, you should take advantage of them because they may not only open doors but also provide new directions for intellectual explorations and collaborations.

Last Friday, I wrote about the wonderful time we had with our inaugural "Meet the Executive" event, which featured our alum, Mr. Marc Schneider of PVH. We were honored and, frankly, thrilled, that Mr. Schneider, who is an executive in the fashion industry, and is based in NYC, was speaking to us during Fashion Week. His talk and visit were truly inspirational and with the extraordinary positive feedback that we have received, we will do another such event this semester. Interestingly, and this I did not expect, some of the most engaging conversations at the lunch that followed took place among the men (and women) discussing fashion at our University Club, which is in a building that dates to 1728!

I noted at the lunch that one of my doctoral students, Min Yu, who was also present, and I have been conducting research on fashion supply chain management for the past year and I am deriving guilty pleasure from working in this area. Also, I could not resist wearing a pink Longchamps silk scarf last Friday that was given to me as a gift for speaking at the Management Science Forum at Fudan University in Shanghai, back in 2006!

Not much research has been done in fashion supply chain management. Firstly, fashion is a creative industry and there are presently unique challenges with fast fashion making a big impact, plus issues regarding the increasing costs of raw materials, including cotton, leather, and polyester, and the big role of outsourcing in this industry. In addition, this industry is seeking to minimize waste and its pollution imprint (or at least some players are). At the same time, fashion is an industry in which brands matter and there is competition among brands.

Min and I became intrigued both by the time-sensitivity of various fashion products as well as by the sustainability issues. Our latest collaboration resulted in the paper, "Fashion Supply Chain Management Under Oligopolistic Competition and Brand Differentiation," which has now been accepted for publication in the International Journal of Production Economics, Special Issue on Green Manufacturing and Distribution in the Fashion and Apparel Industries.

Our paper that focuses on fast fashion, entitled: "Fashion Supply Chain Management Through Cost and Time Minimization from a Network Perspective," will be the lead chapter in the book, Fashion Supply Chain Management: Industry and Business Analysis, which is edited by Dr. T.-M. Choi, and is scheduled to be out in April 2011.

The seeds for this research must have been planted early, since even one of my former undergrads, Christina Calvaneso, who worked as a Center Associate of the Virtual Center for Supernetworks that I direct, and went on to work for GE and Deloitte, is now working for Rent the Runway in NYC in a senior finance capacity! Moreover, one of the undergrads at our lunch last Friday, who had interned at Goldman Sachs last summer, and is from Hong Kong, has accepted an offer from Deloitte and hopes to work in consulting for the fashion industry.

Fashion Supply Chains, the Fashion Police at UBS, and High Tech

One of my doctoral students and I recently revised and resubmitted our paper, " Sustainable Fashion Supply Chain Management Under Oligopolistic Competition and Brand Differentiation" for a special issue of a journal.

We became very interested in fashion supply chain management, since we had been working on time-sensitive products and fast fashion is an application of such supply chains. Our paper, "Fashion Supply Chain Management Through Cost and Time Minimization from a Network Perspective," will be the leading chapter in the volume, Fashion Supply Chain Management: Industry and Business Analysis, edited by T.-M. Choi, of the Hong Kong Polytechnic University, which is now in press with IGI Global and will be available in 2011.

Having spoken on Financial Networks recently at the Measuring Systemic Risk Conference in Chicago , where there were a lot of very well-dressed bankers, regulators, and financiers, in attendance, I was amazed to see that UBS, the Swiss banking giant (probably due to the torrents of publicity), is relaxing its 44 -page dress code, which included even the allowed color of women employees' undergarments! Now their employees may even be able to eat garlic and onions and to select the color of their nail polish. Remember, folks, this is 2011!

Speaking of women and fashion, my fellow blogger Laura McLay, brought to my attention a set of photos taken by Lawrence Harley "Larry" Luckham at Bell Labs in the 1960s, where he managed a data center. Note the number of women, their job titles, and their style of dress. I guarantee his set of photos will make you smile!

Why are there now so few women in high tech?!

Sustainable Fashion Supply Chain Management Under Competition and Brand Differentiation

In an earlier blogpost, I wrote about our recent work in fashion supply chain management and in sustainable supply chain network design.

I am pleased to announce that one of my doctoral students, Min Yu, and I have completed a study of sustainable fashion supply chain management. In the study, which is documented in our research paper, we developed a modeling framework that captures competition in fashion supply chains in the case of differentiated products with the inclusion of environmental concerns. The model assumes that each fashion firm's product is distinct by brand.

Each fashion firm seeks to maximize its profits and to minimize the emissions that it generates throughout its supply chain as it engages in its activities of manufacturing, storage, and distribution, with a weight associated with the latter criterion. The model allows for alternative modes of transportation from manufacturing sites to distribution centers and from distribution centers to the demand markets, since different modes of transportation are known to emit different amounts of emissions.

The competitive supply chain network model advances the state-of-the-art of fashion supply chain modeling in several ways:

1. it captures competition through brand differentiation, which is an important feature of the fashion industry;

2. it allows for each firm to individually weight its concern for the environment in its decision-making, and

3. through a general network framework, alternatives such as multiple modes of transportation can be investigated.

In our paper, we also presented a case study, in which, through a series of numerical examples, we demonstrated the effects of changes on the demand price functions; the total cost and total emission functions, as well as the weights associated with the environmental criterion on the equilibrium product demands, the product prices, profits, and utilities. We noted that the environmental weights could also be interpreted as taxes and, thus, in exploring different values an authority such as the government could assess a priori the effects on the firms' emissions and profits.

The case study also demonstrated that consumers can have a major impact, through their environmental consciousness, on the level of profits of firms in their favoring of firms that adopt environmental pollution-abatement technologies for their supply chain activities.