Supplier Selection Problems in Fashion Business Operations with Sustainability Considerations

Supply chain contracts, such as the markdown money policy (MMP), are commonly adopted in the fashion industry. In this paper, we explore how fashion companies can use MMP to enhance economic sustainability from the cross-cultural perspective. We conduct case studies on two fashion firms (suppliers), one from China and one from U.S.A., that are adopting MMP in their respective supply chains. Via semi-structured interviews with staff members and some public data searching of the target companies, we find that the cultural factors, such as power distance and collectivism/individualism, affect contract selection, contract management, supplier-retailer leadership, and supplier-retailer relationship. We use the Hofstede's national cultural dimensions theory to explain our insights. Specifically, in China, a country with a relatively high degree of power distance and collectivism, the companies tend to care more about the group interest and loyalty. The Chinese fashion companies are more willing to play the leading role in managing the relationships with their retailers, and offer MMP to them. In the U.S.A., a country with a relatively low degree of power distance and individualism, the companies are more likely to emphasize their own interest in trading. In fact, we find that American fashion suppliers tend to bargain with their retailers, and they are less willing to proactively provide the markdown money as a sponsor. Finally, managerial implications are provided, and several future challenges on MMP are examined.

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“…Environmental issues are important in the fashion industry [28][29][30]. MMP also has an impact on green supply chain management.…”

Section: Literature Reviewmentioning

confidence: 99%

Enhancing Economic Sustainability by Markdown Money Supply Contracts in the Fashion Industry: China vs U.S.A.

Shen

Choi

2015

Sustainability

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“…Many huge companies have begun to consider environmental issues and evaluate suppliers' environmental performance [55][56][57]. According to Jia et al [58], based on the concept of the TBL (Triple Bottom Line) of economy, environment, and society, which includes three categories with 12 standards in total, technique for order preference by similarity to an ideal solution (TOPSIS) is adopted for supplier selection. In environmental performance indicators; Azzone and Bertele [59] proposed four indicators: (1) external environmental benefit; (2) environmental benefit; (3) green image; and (4) environmental adaptability.…”

Section: Green Supplier Selection Criteriamentioning

confidence: 99%

The Establishment of a Green Supplier Selection and Guidance Mechanism with the ANP and IPA

2016

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Abstract:This study aims to establish a green supplier selection and guidance mechanism by integrating the features of an ANP (Analytic Network Process) and an IPA (Importance-Performance Analysis) to achieve sustainable management for green supply chains. Using an expert survey, this study developed green supplier selection criteria. It adopted an ANP, which allows for interdependencies and feedback between the various criteria, to select competitive green suppliers. Then, it used an IPA, which can analyze the criteria's significance and performance levels, to provide green suppliers with direction for guidance and improvements. The green supplier selection and guidance mechanism featuring an ANP and IPA is thus established and validated through case studies. The research results showed the following: (1) the green supplier selection criteria comprise a total of 11 performance evaluation criteria from the three dimensions of operation, competence, and environmental consciousness; (2) as shown by the APN evaluation results, environmental benefits, environmental regulations, finance, technological competence, and delivery time are the top five among the overall green criteria of the company; the performance of the various suppliers is thus arranged in order, and the most competitive supplier is selected; (3) an IPA is used to analyze the criteria's significance and supplier performance levels and to provide the suppliers with suggestions on priority improvements, including implementing the requirements in the environmental regulations, establishing comprehensive financial management procedures, improving corporate technological competence, and consolidating customer service; (4) it is suggested that an ANP and IPA should be integrated in the applications, which could simplify the green supplier selection and guidance mechanisms and increase the efficiency of supplier management, thus creating a three-win situation for the clients, the company, and the suppliers.

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“…There are important studies, including social responsibility and consumer trust [23], sustainability reporting [24], sustainable supply management [25], and supplier selection problems [26]. Yet, the majority of these studies examined sustainability activities as separated constitute.…”

Section: Introductionmentioning

confidence: 99%

Environmental and Social Impact Free Stance and Consequences on the Operational Performance

Karaosman¹,

Brun²,

Morales-Alonso³

2017

JTEFT

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The luxury fashion industry, which used to be geographically centralized, sought growth opportunities to expand global sales. Luxury fashion businesses have significantly grown, have created a depiction of glamor and exclusiveness, and thus this global phenomenon has reached highly lucrative financial figures. Yet, this global expansion has brought noteworthy challenges including the execution of vertically integrated supply chains (SCs). Relatedly, SC complexity, rapidly changing market dynamics and growing concerns in terms of the footprint generated by global fashion operations left many people wonder: what do luxury fashion companies really do to truly embark on not only financial but also environmental as well as social sustainability? The myth of sustainability in fashion operations has been receiving attention; nevertheless the real focus must be switched from company boundaries to supply networks considering that fashion companies are held responsible for social and environmental records of their upstream suppliers. In this vein, it is vital to examine to what extent sustainability management is integrated and which capabilities are developed and deployed along upstream SCs. Using a case study method with seven upstream suppliers, including both direct and indirect suppliers of two massive luxury fashion companies, sustainability management capabilities were represented in two clusters; namely practical and interactive. It was found that the deployment of such SMCs could be positively and directly associated with performance outcomes. An integrated framework encompassing the components of capability development, sustainability practices, buyer-supplier-supplier relationship execution, and performance outcomes suggests that taking an environmental and social impact free stance could improve some operational results.

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Supplier Selection Problems in Fashion Business Operations with Sustainability Considerations

Cited by 78 publications

References 43 publications

Enhancing Economic Sustainability by Markdown Money Supply Contracts in the Fashion Industry: China vs U.S.A.

Enhancing Economic Sustainability by Markdown Money Supply Contracts in the Fashion Industry: China vs U.S.A.

The Establishment of a Green Supplier Selection and Guidance Mechanism with the ANP and IPA

Environmental and Social Impact Free Stance and Consequences on the Operational Performance

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