Onboarding Blockchain: A Roadmap for Smallscale Fashion Brands

The fashion SME sector is agile and values driven—but despite the desire to do good and adopt technology—real solutions are hard to find.

Long Story, Cut Short
  • SMEs have little to no public mechanism for communicating their supply chain credentials. They are confused, concerned and calling for an ‘education piece’ on how best to navigate all the measures required and how to make their supply chain transparent,
  • The Transparency team at the Manchester Fashion Institute (MFI) is developing a practical guide for SMEs to facilitate the onboarding of tech for transparency.
  • The transparency guidebook for SMEs will form part of the Manchester Fashion Institute’s Sustainability Pledge with the UNECE.
Advanced technologies, like blockchain, can accelerate the transition towards more responsible and business models and transparent supply chains by connecting all stakeholders on the value chain.
For a Transparent Value Chain Advanced technologies, like blockchain, can accelerate the transition towards more responsible and business models and transparent supply chains by connecting all stakeholders on the value chain. Manchester Fashion Institute

I am a former fashion label owner. Mine was a small business that I managed over several decades in two countries across several states. That experience has strongly influenced the way I see fashion studies and fashion research, which is the work I do today. In fact, my research centres very much on the smallscale firm—its challenges and opportunities. Opportunities abound in the fashion system, particularly when viewed from the start-up world. For instance…

Imagine holding your phone up to a garment and seeing its full lifecycle displayed as an appealing story of good practice and apt process. Imagine paying the seamstress directly—who may be living in the global south. Imagine the hints you might get on caring for this garment, and imagine the life you could give it beyond your time with it. This is the vision that technologies like blockchain have promised us—but how, ask many smallscale fashion firms, are we to achieve this? We don’t even know where to start! There seems to be neither platform nor app that can be accessed.

There is an urgent need to increase the garment and footwear industry’s ability to manage its value chains more effectively, identify and address labour and human rights violations and environmental impacts, combat counterfeits, and handle reputational risks, while embracing more sustainable production and consumption patterns. Drivers for change stem from consumers, investors and stakeholders within the industry including social, market, regulatory and technological forces.

Among the drivers are industry watchdogs such as Fashion Revolution. Their Fashion Transparency Index reviews brands’ public disclosure on human rights and environmental issues across 246 indicators in five key areas. Importantly, they observe that too few major brands and retailers disclose crucial environmental data, despite the urgent need for transparency. Furthermore, Fashion Revolution do not monitor smallscale firms in their index—which means SMEs have little to no public mechanism for communicating their supply chain credentials.

In fact, many companies have a limited view of the network of business partners within their value chain and do not get the full story behind their products. Most can identify and track their immediate suppliers, but information is often lost about the suppliers of their suppliers. It requires the collaboration of all industry partners, the deployment of common approaches and reliable technical solutions in widely different environments.

Advanced technologies, like blockchain, can accelerate the transition towards more responsible and business models and transparent supply chains by connecting all stakeholders on the value chain. Such visibility supports accountability and market access for compliant actors in advanced and emerging economies. But first we need to develop an understanding among industry stakeholders of the data requirements for digital tools. We also need to gauge industry attitude toward transparency, as well as considering extended user responsibility requirements and Identify challenges and opportunities.

It is little wonder that smallscale fashion firms are confused, concerned and calling for an ‘education piece’ on how best to navigate all the measures required and how to make their supply chain transparent, as quickly as possible, considering Net Zero 2030 targets and the urgent UN Sustainable Development Goals (SDGs), not to mention fears of inadvertently using modern slavery or causing environmental harm in their supply chains. This is the point where the Manchester Fashion Institute (MFI) felt we could develop just such a guide.

Manchester Fashion Institute
Confusion Aplenty The Transparency Project Team at the Manchester Fashion Institute has been investigating supply chain transparency since 2019. It found that many firms are perplexed about the various strategies and possibilities in securing supply chain transparency. And this is no surprise. Manchester Fashion Institute

Investigation and a guide book

The Transparency Project Team at the MFI has been investigating supply chain transparency since 2019. During that time, we have interviewed many smallscale firms and tech startups, held outreach events and presented at public fora. We found that many firms are perplexed about the various strategies and possibilities in securing supply chain transparency. And this is no surprise.

This led us to the idea to create a guidebook for smallscale fashion firms to onboard supply chain transparency in simple, easy to follow steps using the technology that already does exist—and be ready for the tech that is yet to come.

The Transparency Team at the MFI decided that research collaboration with local firms and industry organisations would be crucial in first identifying the barriers to transparency and then developing onboarding to tech solutions. We found a willingness among stakeholders to embrace transparency but despite the media hype, there are very few accessible tools to support these actions.

In 2021, we came across the UNECE Transparency Toolbox and felt that this might be the answer to the democratisation of advanced technologies for the industry—especially smallscale fashion firms. We conducted an outreach workshop with the UNECE, local firms and sustainability and transparency organisations such as the UKFT and WRAP UK. The outreach event we conducted was an opportunity to identify ways to collaborate and shape standardised transparency information. The workshop triggered collaboration between stakeholders, partners and industries.

UNECE has launched 'The Sustainability Pledge' inviting governments, garment and footwear manufacturers and industry stakeholders to pledge to apply their toolkit of measures and take a positive step towards improving the environmental and ethical credentials of the sector.
Toolkit of Measures UNECE has launched 'The Sustainability Pledge' inviting governments, garment and footwear manufacturers and industry stakeholders to pledge to apply their toolkit of measures and take a positive step towards improving the environmental and ethical credentials of the sector. Manchester Fashion Institute

Developing a practical guide for SMEs

The next part of the Transparency teams project is to develop a practical guide for SMEs to facilitate the onboarding of tech for transparency. We will create this guide as a development of other extant tools. For example, the UNECE and UN/CEFACT, jointly with key industry stakeholders have looked into supply chain challenges and risks and have launched a project for an international framework initiative to enhance transparency and traceability for sustainable value chains in the garment and footwear sectors.

Over the period 2019–22, the project set up a multi-stakeholder policy platform, developing policy recommendation, traceability standards and implementation guidelines, built capacity and conducted pilot studies. The UNECE toolbox was developed in consultation with over 250 stakeholders in 25 countries. It is highly developed and detailed and almost nearing completion.

As part of that work, UNECE has launched 'The Sustainability Pledge' inviting governments, garment and footwear manufacturers and industry stakeholders to pledge to apply their toolkit of measures and take a positive step towards improving the environmental and ethical credentials of the sector. Over 70 organisations have now committed to the pledge including Vivienne Westwood, Mulberry, the Sustainable Leather Foundation UK, Textile Exchange, Fashion Revolution, the Open Apparel Registry and The Textiles Institute at the University of Boras, Sweden.

The MFI textiles transparency group will draw from the UNECE Toolbox and develop guidelines that are accessible and relevant to local UK industries—making the information accessible and practical for SMEs. This transparency guidebook for SMES will form part of the Manchester Fashion Institute’s Sustainability Pledge with the UNECE.

Few SMEs have adopted new innovations. There are several reasons. Among these, are the shifts in organisational mindset required for the deployment of supply chain transparency and adoption of digital technology. This MFI project designed for the sustainability pledge aims to unpack the processes, procedures, stakeholders and technical solutions into manageable tasks.

PaperTale is one technology provider that we have spoken to about the various strategies available. They suggest value propositions for consumers include empowerment through providing information so that they can make informed buying decisions, giving them a sense of responsibility and achievement by contributing towards sustainability strategies, options to return used items and the possibility to contribute to charitable causes—for example, supporting garment workers in the global south.

Value propositions for suppliers include business partner loyalty, employee retention through worker’s rights transparency and protection, optimisation of resources, reassurance around regulatory compliance, and more open pricing structures to avoid costcutting.

Value propositions for brands include raised perception in the eyes of consumers, increased margins through verification of claims, regulatory compliance, risk reduction and the optimization of resources.

Other strategies include Product Passports and product stewardship (see the AFC work on this)—which includes following the raw materials that compose a product as well as its life cycle from raw fibre, through the circular economy to end of life.

However, these considerations mount up and soon become overwhelming. Further issues include: impending legislation and compliance; the fear of greenwashing allegations, tech-washing and consumer pressure. Meanwhile SMEs are concerned with protecting their trade secrets—including suppliers and processes as well as chain of custody. The number of options that must be considered in a transparent supply chain continues with some of the solutions. These include traceability platforms; tracer technologies; emissions measuring tools for carbon footprint, GHG emissions, chemical and water use, auditing and certification.

SMEs are concerned with protecting their trade secrets—including suppliers and processes as well as chain of custody. The number of options that must be considered in a transparent supply chain continues with some of the solutions.
In Tandem The MFI is working in collaboration with smallscale firms in the regional northwest of the UK—that is the area surrounding Manchester—which is a historical textile production centre and still the location for many smallscale firms. Manchester Fashion Institute

Challenges and a pledge

The MFI textiles transparency research group has already identified the following challenges facing SMEs:

  1. Data sharing reluctance: competition, trade secrets, competitive advantage, and lack of trust.
  2. Digital hesitancy: lack of common data standards and preparedness for digital transformation
  3. Immature technology: no effective universal platform, API or ‘killer app’.
  4. Under resourced SMEs: time, costs and priorities; complex and tedious data collection.
  5. Uncertain regulatory landscape: uncertainty around forthcoming legislation – within various territories and jurisdictions; not understanding reporting requirements.
  6. No guidance framework on how to adopt digitalisation for the supply chain.

Our project for the Sustainability Pledge will:

  1. Identify fashion textiles businesses and organisations in the UK that are interested in digitalising their supply chain transparency
  2. Through collaborating with stakeholders, develop strategies to connect suppliers upstream and downstream including tier 1–5 suppliers.
  3. Find ways for competing firms to communicate while circumventing trade secrecy and maintaining privacy and security
  4. Create a working model for cross-industry supply chain data communication in the Regional Northwest UK, that can be adopted nationally—and potentially internationally
  5. Test tools/guidelines with SMEs locally and regionally to inform a potential future national project.

The mechanism will solve the common data ontology problem and support Extended Producer Responsibility (EPR) requirements. It will interoperate and connect with existing global platforms.

Interest in so-called Web 3.0 technologies to optimise the supply chain is rising. This includes:

  • Digital tagging and tracking applications that provide both upstream data on the supply chain as well as information to recyclers at the end of life
  • Tracking devices include radio frequency identifiers (RFIDs), quick response (QR) codes, beacon technology, near frequency codes (NFCs), microchips DNA markers and other Internet of Things (IOT) devices as well as Artificial Intelligence (AI) all enabled by blockchain technology

To prepare our set of guidelines, we have turned to some of the tech providers on the market such as TrusTrace and PaperTale to compliment the studies from global organisations such as the UNECE and gather best practice guidelines.

The Swedish based tech firm TrusTrace has already developed their Traceability Playbook which provides detailed background, and has grouped the transparency tasks into areas of attention such as supplier mapping, product traceability and material traceability.

They have detailed the sections as well:

Supplier Mapping

  • Suppliers and facility details across tiers.
  • Social data about suppliers and facilities.
  • Social, environmental and material related certifications and audit reports.
  • Due diligence assessments related to the social and environmental performance of the suppliers.

Product Traceability

  • Granular bill of material information for the product.
  • Supply chain information of a product and materials across different tiers.
  • Specific declarations related to raw materials or processing methods used by suppliers.
  • Material certificates and quality reports related to the product.

Material Traceability

  • Substantiate claims about the material composition in the product.
  • Verify the weight-based material composition of the product.
  • Understand the waste that occurs in production.
  • Verify that what was received is what was ordered and that the items delivered on the Bill of Material (BoM) match the product Purchase Order (PO).

TrusTrace’s playbook is one of many initiatives that we hope to collaborate with and build upon. We will be collating information from the UNECE Transparency Toolbox, PaperTale, FibreTrace, The Sustainable Leather Foundation and The UKFT supply chain optimisation initiative.

The MFI Sustainability Pledge will among other things identify fashion textiles businesses and organisations in the UK that are interested in digitalising their supply chain transparency.
Sustainability Pledge The MFI Sustainability Pledge will among other things identify fashion textiles businesses and organisations in the UK that are interested in digitalising their supply chain transparency. Manchester Fashion Institute

Going forward

We hope to expand on current tools and develop them further to create a truly practical, step by step checklist style guide that includes elements such as:

  • Supplier mapping;
  • Product traceability;
  • Connecting to platforms;
  • Transparency mindset;
  • Digitalisation mindset;
  • Common data standards;
  • Automating data entry;
  • Business process analysis.

We will develop all the considerations into modules for the on-boarding piece. The modules will include the following areas:

  • Hierarchy – level of detail;
  • Timeline/phases and priorities;
  • Matrix: suppliers x products;
  • Data visualisation – dynamic and real-time;
  • Connections to tech, platforms and apps;
  • Communicating data
  • Onboarding and training;
  • Maintaining, testing, improving, expanding, and collaborating.

We have limited our scope for the initial development and roll out of the guidelines. We are working in collaboration with smallscale firms in the regional northwest of the UK—that is the area surrounding Manchester—which is a historical textile production centre and still the location for many smallscale firms. We have contacted some firms, but we are still seeking more collaborators.

We hope to achieve UNSDGs 9, 11 and 12 through this Sustainability Pledge project:
9. Industry innovation and infrastructure through helping small scale firms to adopt block chain and related web 3.0 technology
11. Help build sustainable cities and communities by supporting local enterprise
12. Help further responsible consumption and production

And in this way support small scale fashion firms to achieve their supply chain transparency goals.

Please contact us if you would like to find out more, collaborate or share ideas. We look forward to hearing from you!

 
 
  • Dated posted: August 5, 2022
  • Last modified: August 5, 2022