Blockchain-Enabled Supply Chain Traceability in the Textile and Apparel Supply Chain: A Case Study of the Fiber Producer, Lenzing

Abstract

Supply chain traceability is a dominant concern for many industries, regulators, and policymakers. In the textile and apparel industries, social, environmental, and sustainability issues are frequent causes for concern, highlighting the need for effective traceability solutions. Blockchain technology has characteristics that make it attractive for supply chain traceability applications. However, the literature lacks discussion of empirical cases. We discuss current blockchain applications in the textile and apparel industries and analyze an exemplar of a prominent blockchain traceability solution adopted by a world-leading fiber producer, the Lenzing group. In this study, we identify two related objectives for traceability-product authentication and supply chain sustainability. The case study analysis has stimulated a rich discussion about the different levels of traceability achievable across the supply chain, the digital identification of products, and the extension of blockchain solutions across the whole supply network. Significant technical and business challenges exist in extending traceability to the upstream raw material supply chain and to the dispersed garment manufacturing networks downstream. More broadly, the study highlights the need to (1) clarify the objectives of a traceability initiative, and (2) scope a traceability solution appropriately, both horizontally across the supply chain and vertically with respect to the granularity of the items traced.

Drivers, barriers and supply chain variables influencing the adoption of the blockchain to support traceability along fashion supply chains

“…Many fashion companies are currently verifying the benefits of this technology for their business and they have not yet moved on to the next operational phase which involves the real implementation of the blockchain technology (Caldarelli et al 2021). What emerges from the literature review is the potential of this technology in various sectors, and, in the face of the positive results, the fashion industry is working to understand the advantages and limitations of the specific fashion business (Ahmed and MacCarthy 2021). The first results from the evaluation of blockchain technology in the context of fashion help to underline how this technology can lead to better control of the fashion supply chains, characterized by high levels of internationalization of production and distribution (Agrawal et al 2021;Ahmed and MacCarthy 2021;Bullón Pérez et al 2020).…”

“…What emerges from the literature review is the potential of this technology in various sectors, and, in the face of the positive results, the fashion industry is working to understand the advantages and limitations of the specific fashion business (Ahmed and MacCarthy 2021). The first results from the evaluation of blockchain technology in the context of fashion help to underline how this technology can lead to better control of the fashion supply chains, characterized by high levels of internationalization of production and distribution (Agrawal et al 2021;Ahmed and MacCarthy 2021;Bullón Pérez et al 2020). The studies identify how the blockchain theme for the fashion sector is closely linked to the goal of improving traceability in all the procurement, production, and distribution of fashion products.…”

“…Blockchain technology is not yet widespread among companies, and research is still open to evaluating the new possibilities that blockchains can offer to various industrial sectors (Pólvora et al 2020). Further research contributions are encouraged to identify the factors that could contribute to, or that may hinder, the implementation of the blockchain within supply chains (Chang et al 2019;Queiroz and Wamba 2019), in particular in the fashion industry (Choi et al 2019;Caldarelli et al 2021;Ahmed and MacCarthy 2021;Agrawal et al 2021).…”

“…The fashion industry is characterized by a multitude of international suppliers collaborating in the creation of collections, and nowadays the development of complete traceability is certainly a relevant issue for all companies in the sector. The blockchain is characterized by the possibility of ensuring traceable information and represents a technology that in the future will be massively used by fashion companies, even if currently there are few cases of application of this technology in the fashion industry (Ahmed and MacCarthy 2021). The fashion sector, however, still presents little empirical evidence as many companies are still studying and evaluating blockchain technology and have not yet moved on to the next phase of implementing the technology.…”

“…Traceability cannot be implemented at the level of a single node in the supply chain, but it affects entire fashion supply chains (Ahmed and MacCarthy 2021). For this reason, the implementation of blockchain technology should embrace the perspective of the whole supply chain by further investigating the variables that may enable or influence the adoption of blockchain technology at the supply chain level in the fashion sector.…”