A recent study by Xiaoyang Long looks at how two common approaches to addressing waste in the fast fashion industry might impact the upstream supply chain of manufacturers and raw material suppliers, an area less frequently studied than its downstream counterparts.
Long, a Wisconsin Naming Partners Professor and an associate professor of operations and information systems at the Wisconsin School of Business, and co-author Luyi Gui of the University of California, Irvine, focused on two different methods used in the fashion industry to decrease waste: quick response and upcycling.
Quick response is the restocking of inventory based on consumer demand. For example, a fast fashion brand like Zara may reorder only its top-selling fashions for that season. Upcycling, on the other hand, is when unsold, never-used material or inventory of some sort (otherwise known as “deadstock”) can be utilized to make a new product. Both approaches have been employed and proven to have some positive environmental impact, reducing waste in the final stages of the supply chain pipeline where the product is finished, sold to consumers, and any material waste is disposed of.
For the study, Long and Gui modeled and analyzed quick response and upcycling in the setting of raw materials acquisition, which is the beginning of the supply chain pipeline. At this key juncture, fast fashion firms are sourcing materials for new clothes, making production decisions, and taking advantage of any incentives to implement or not implement the above two approaches to reduce waste. For each approach, Long and Gui’s model factored in the environmental impact of the amount of deadstock created and material acquired.
“I’ve always been interested in how fashion, or rather consumer trends in the fashion industry, drive firm decisions and business models in the supply chain.”
–Associate Professor Xiaoyang Long
The study results suggested some degree of tradeoff. Based on the data, quick response alone reduced the amount of deadstock waste when it came to finished products. However, Long says, it also pointed to an unintended consequence: more fabric acquired meant greater amounts of deadstock, both in finished clothes and raw (never used) fabric. Upcycling and quick response together reduced deadstock creation but led to greater demand for fabric from firms upstream in the fabric pipeline.
The takeaway, Long says, is that “if you do that accounting throughout the entire supply chain, sometimes that increase in upstream waste might dominate that decrease in downstream waste. So, the message is that we really have to look at the supply chain as a whole.”
Long says supply chains have always been a primary focus of her work. That focus now incorporates sustainable supply chains, and this study aligns and contributes to that avenue of research.
“I’ve always been interested in how fashion, or rather consumer trends in the fashion industry, drive firm decisions and business models in in the supply chain,” she says. “The fashion industry has a very large environmental footprint and it’s an industry driven by consumer decisions. So, I think in that sense, we do want to try to make a difference. It’s about consumption, often overconsumption, especially in countries like the U.S., where it’s easy for all of us to fall into this pattern of buying and then throwing away.”
Long says the study’s analyses also hold policy implications. Much of the existing regulation focuses on the consumer side, not on the firm and supplier side.
“With this study, we’re not saying that the net effect is always negative, but just that this is something to be aware of,” Long says.
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