#SustainabilitySeries: Technology in sustainable production

For many industries with global supply chains — such as food, automobiles and electronics — traceability and origin tracking have been standard requirements with regulatory measures in place for long. For food, it is driven by the safety of what goes into our bodies and for many others driven by regulatory reasons.

While apparel does not neatly fall into these buckets, there is a huge amount of concern around issues such as worker abuse, health & safety, environmental sustainability and compliance.

Over last few years, there has been a significant increase in awareness of this issue globally including among consumers. The consumer groups as well as several human rights organisations have been putting pressure on the brands and retailers to provide visibility on the working conditions. But so far, not much has changed.

These issues are source of reputation risk for fashion brands and retailers, and are like ticking time bombs. With proliferation of social media, there has been increased frequency of incidences where customer activism regarding such issues has directly impacted brand sales.

Fixing the Achilles heel of the fashion value chain

Garment manufacturing sites are the source of one of the biggest human cost in all industries. Around 40 million workers, mostly poor rural women, are often subject to below living wages, long hours and poor working conditions.

In turn, the factories themselves grapple with intense competition and low profitability. The factories have been constantly under pressure from buyers to lower the price and produce goods in increasingly shorter periods of time. Beyond these twin squeezes, the buyers also punish suppliers for any delay. To comply with the demands, garment factories under invest in work facilities and resort to exploitation of workers. This has resulted in factory floors becoming sites for a complex array of health and safety concerns.

The workplaces are commonly subject to poor ventilation, intense heat, clouds of airborne fiber dust, cluttered work spaces, and unsanitary factory conditions. Various studies have shown that garment workers often suffer from back, kidney, and musculoskeletal problems resulting from extended exposure to fabric dust and chemicals and long periods of sitting and repetitive motion.

Operating efficiency

It is widely accepted in industry discourse that improvement in productivity is an important part of “the solution” to achieve improved well being of millions of garment workers. Improvement in efficiency reduces the manufacturing cost per garment which could be directed towards better well being of the factory workers.

Industrial IoT and cloud technologies can be leveraged effectively for efficiency improvement by an automated, granular, and reliable measurement of every minute of activity of each machine on the production floor by deploying sensors at each work desk. These sensors can capture details of the machine’s availability, needle running status, and reason codes for lost time. Additional data capture mechanisms can be provided to add needle breakage and other machine breakdown events.

Factory managers and supervisors can get access to interactive reports and dashboards that help them identify incremental or radical improvement opportunities. With detailed history being available, managers can get auto-updated latest operator skill matrix, man-machine status for line setting planning, and other critical details for efficient production planning.

This detailed analysis allows to achieve an increased throughput of 20–25% easily, and since the profitability of the factory operations is highly dependent on the production efficiency, this will have a multiplier effect on the profitability of the orders.

Traceability and tracking

In addition to the above, specific digital solutions can be added to include data on vendor compliance and use of RFID sensors to trace the product from its origin to its end. DNA tagging can be enabled for tracing and tracking of product from cotton seed to the final garment.

Transparency of operations

The global apparel supply chain is complex and lacks transparency. The relationships are transient and there is a continuous game of negotiation between players at all times. Natural result of lack of trust is that each player keeps their operations as opaque as possible to achieve a favorable outcome and making achievement of transparency extremely difficult, if not impossible.

In this context, the brands require compliance of their code from the manufacturers. The factories could facilitate the process while maintaining control by adding additional data capture mechanisms to collect data of the ambient environment such as temperature, air quality, illumination, noise levels, etc.

Factories can then easily share selected data using blockchain Smart Contracts. Trust in the data integrity is established by blockchain and smart contracts allow rapid and easy sharing of data while maintaining strict control and ownership.

Single Source of Trust

Blockchain has the potential to increase transparency across the supply chain by transforming the way information and transactions are captured, owned, stored, and shared among companies and ecosystems.

It can also be used to fix the broken payment system of the industry. As Covid-19 crisis revealed that the current payment system has almost no protection for the factories and billions of dollars worth of under process orders were cancelled with impunity. Going forward, all stakeholders of the industry need to work towards evolution of a more egalitarian payment structure. Like in many other industries, manufacturers should be covered for their expenses as per the stage of the order execution. The buyers should compensate the manufacturers for the purchase of necessary raw materials with the balance payment being guaranteed by contracts or LCs.

Modern cost effective systems could be deployed to monitor the execution, and trust in data could be established by blockchain which could then be linked with the stage wise payment mechanism.

Time has come for technology to finally enter the factory floors and solve one of the biggest human costs being incurred in today’s time.