Investigating short term strategies in product sustainability index implementation, a case study at IKEA

Part of: Seliger, Günther (Ed.):Innovative solutions : proceedings / 11th Global Conference on Sustainable Manufacturing, Berlin, Germany, 23rd - 25th September, 2013. - Berlin: Universitätsverlag der TU Berlin, 2013. - ISBN 978-3-7983-2609-5 (online). - http://nbn-resolving.de/urn:nbn:de:kobv:83-opus4-40276. - pp. 49–53.Companies are aware of long term benefits of sustainability, and that in the future the competitive landscape will change. However, financial concerns slow down the sustainability development process. This article aims to explore how companies move toward long term benefits of sustainability without compromise in their financial objectives in short term. This study focuses on investigating how companies use sustainability index tool as a component of short term strategy. Findings indicate that companies try to simplify the sustainability assessment and combine it with other decision making tools. This simplification is toward finding potential improvements in the product level. Results are summarized in a model which corresponds to the short term strategy development process toward sustainability. This model describes how company identifies critical products based on financial, strategic and sustainability aspects. The investigation has been performed at children’s IKEA in Sweden

Demystifying process-level scalability challenges in fashion remanufacturing: An interdependence perspective

Abstract The purpose of this paper is to determine how process-level challenges can be solved in order improve scalability of fashion remanufacturing. In order to do so, and prescribe solutions, the paper first conducts a systematic literature review to reveal three categories of process-level challenges that are related to sourcing of input material, process throughput time, and skillset requirement. These categories further guided us in conducting case study with a Swedish charity-owned fashion remanufacturer for exploring how the challenges are addressed and solved in order to achieve process-level scalability. First, our study reveals a systematized approach to determine product-process categories defined by production volume and degree of remanufacturing. Second, by exploring the process-level challenges of six different remanufactured product groups in the case study organization we identify process-level requirements for scalability, and challenges when these are unmet. The findings show that in fashion remanufacturing (particularly disassembly and reassembly), low degree of coupling, high level of formalization of activities and low skill specificity can be ways to attain process-level scalability. Overall, this highlights the need to build lower interdependence between disassembly and reassembly during fashion remanufacturing

EPR-SYSTEMS AND NEW BUSINESS MODELS FOR SUSTAINED VALUE CREATION : A STUDY OF SECOND-HAND CLOTHING NETWORKS IN SWEDEN

The paper aims to explore and map diverse business models and their core drivers in the used clothing network in Sweden followed by identification of the emerging patterns and their differential degrees of value creation. Information was gathered through desktop survey and semi-structured interviews. 14 different operating business models were identified, out of which 8 each can be categorized as service-based and resell-based, either with or without product ownership. Some business models were common to both categories. The paper contributes to the understanding of environmental and economic gains of each business model - the key to value creation of responsible business models.Re:textil

Organizational resilience through crisis strategic planning

Resilience, in an organizational sense meaning the ability to withstand crises and disturbances, has become a keyword during the last ten years. It is associated with established activities like risk and crisis management and business continuity planning or with strategic management, but it allows for new perspectives and insights into the conditions for doing business. Applied to the whole supply chain it also provides tools for managing and aligning the logistics flows in an appropriate way. But why is resilience essential for success or survival? In context to the Swedish textile and clothing (T&amp;C) industry, the average number of firms that went bankrupt during the recent crisis (2007-09) escalated twofold compared to the average over 2000-10 due to tremendous pressure on the Swedish credit system. The structural industrial statistics also plummeted in these crisis years aggravating other inherent or internal problems as a ’ripple effect’. The small and medium sized enterprises (SMEs) were the most affected of all, facing major threats to their financial performance and ultimately to their survival, at times of economic crises. In such a context, study of organizational resilience (ORes), to survive and thrive becomes increasingly significant. To address this issue the thesis concentrates on understanding the resilience development process through crisis strategic planning in context to Swedish textile-related SMEs amidst economic crises. It investigates and answers how resilience development can be considered as a precursor for business success, how to develop and monitor resilience, and identifies its antecedents and key strategic initiatives and their differential degrees of influence. No prior studies describing organizational resilience and crisis strategic planning in an integrated processual approach using both short-term and long-term strategies through planning and adaptation were found in the literature. The thesis adopts a critical realist-grounded theory (CR-GT) approach along the metaphysical level as the structure for the resilience development process follows a causal relationship between the object (the organization), its structure (competences and strategies), the causal power (crisis strategic planning) for attaining an event/outcome (resilience) in a particular context (economic crisis). For addressing this issue of devising an outcome-based processual approach, a multivariate financial indicator called the Altman’s Z-score (used basically for calculating bankruptcy potential in firms) was used for quantifying resilience. For investigating the causal mechanism epistemological relativism along the grounded theory approach was chosen for theory generation. A mixed methodology was adopted based on quantitative statistical analyses, at first, followed by a detailed qualitative work based on surveys, interviews, case studies and secondary data for data triangulation. Analysis of data was conducted through certain thematic coding principles. A four-step hermeneutic spiral was followed by systematically combining the pre-understanding, empirics and extant literature to develop a theoretical framework through constant modification. Overall, the resilience development was highlighted along a processual framework adopted along the CR-GT view of causation. The findings are manifold. Firstly there is a need to develop economic resilience in SMEs to shift from just component-view to a more holistic systemic view of organizations, upheld by an integrated crisis strategic planning (CSP) approach, for facing dynamic environments. Secondly, the CSP process prescribed in the thesis is quite integrated and holistic, taking a view from all angles, viz. organizational structure (capabilities and strategies), processual approach etc. Such a resilience development process through CSP is based on a six-step process: (i) identification of environmental context, (ii) impact analysis, (iii) leadership analysis, (iv) capability analysis, (v) formulation/selection and implementation of strategies, and (vi) evaluation and review of strategic options, utilizing a suite of strategic tools and techniques and is particularly simple for application in an SME setting. Third, operationalization of such a causal mechanism based upon implementation of strategic tools is based upon using a multivariate financial indicator like Altman’s Z-score to outline the relation between ORes and business ‘health’, thus quantifying it. Finally, in order to develop a resilient organization it is important to engage and utilize effectively the key resources and assets (financial, material, social, networks) by developing dynamic capabilities (strategic and operational flexibilities, redundancy, robustness) and organizational learning (culture, employee wellbeing, attentive leadership and decision-making). These competences must be employed for the appropriate strategy development (selection, implementation, and evaluation) framed on both growth and continuity strategies, both planned and adaptive in nature. The research develops a holistic analytical framework of organizational structure for resilience development based on these two criteria. It also tests this framework for Swedish textile-related SMEs amidst economic crises. The findings in this contextual delimitation suggest that the resilient SMEs possess better financial resources, relational networks, operational &amp; strategic flexibilities. The economically resilient firms mostly showed planned resilience in economic crises based on long-term strategies through business continuity planning (BCP) and in terms of growth strategies through market penetration, diversification and transformational initiatives. These firms also showed better short-term crisis management (CM) through higher operational flexibility while the less resilient ones lacked in strategic readiness due to resource scarcity. This is beneficial for firms to understand the key areas in which to invest and develop a multistrategic CSP model, categorizing firms along different resilience types – planned or adaptive.Thesis for the degree of Doctor of Science in Technology to be presented with duepermission for public examination and criticism in Festia Building, Auditorium Pieni Sali 1, at Tampere University of Technology, on the 11th of October 2013, at 12 noon.</p

Identifying organizational competence in global textile complex

The paper develops a matrix for organizational competence mapping according to some inherent common pattern identified to lead success, based on innovation and specialization – along three-dimensional domain of product, process and supply chain. Organizational distinctive competences are, hence, related to how they generate organizational critical success factors (CSFs). Survey conducted on Swedish Textile, Clothing and Fashion enterprises reveals that product quality is considered to be the most important for organizations followed by higher service level, supply chain coordination and flexibility. Cost and price reduction is apparently of lesser significance

Applying 3DCE for value creation in second-hand clothing chain : a Swedish study

Second-hand clothing value chains in western countries are fragmented and complex affecting value generation. In this context, various attributes of product, process and supply chain design decisions are essential to enhance value creation; for example, new product take-back schemes, process reengineering, reuse and redesign, closer coordination, etc. These activities need to be synchronized to redesign products, processes and associated value chains independently and more necessarily simultaneously thus calling for three-dimensional concurrent engineering (3-DCE) as a critical lens to explore the existing value creation activities. The paper explores the antecedents of value creation in second-hand clothing value chains in Sweden along 3-DCE perspective. The research adopts a mixed method where data is collected through desk research and semi-structured interviews twelve actors in the second-hand clothing network.  The paper identified value generating stages as collection, sorting, refurbishing, reselling of used clothes and redesigning. These stages have various enablers and challenges at the intra-organizational and value chain levels. At the intra-organizational level, key antecedents are strategic logistics infrastructure for collection, sorting, transportation as well as creative retailing. Effective merchandise planning is another critical enabler for reuse and redesign, while right market knowledge is yet another essential enabler. At the value chain level, key antecedents are process integration, well-designed collection network and collaborative collector-sorter partnerships along with product design for durability. Further, supporting sustainability communication also enables higher value generation in the organization. These antecedents were further mapped in the paper along 3-DCE drivers to identify their foci.Re:textil

Identifying Organizational Distinctive Competence by Business Mapping in a Global Textile Complex

The three-dimensional perspective along product, process, and supply chain, of any organization is essential for providing a holistic perspective for mapping business competency. Organizational business success, in terms of economic performance, for any company in the Global Textile Complex, is a resultant of its distinctive competencies – innovation and/or specialization along the fundamental blocks of 3-DCE (product, process and supply chain). The paper develops a matrix for business competency mapping to streamline the organizations according to their pattern of distinctive competence deconstructed along the 3-DCE domain. 18 of the 25 surveyed companies recording a profit build-up (2005-09) had their economic success deconstructed along different combinations of product, process and supply chain attributes. It is also argued that innovation and/or specialization are the routines or pathways to be successful and statistical models are developed to validate the hypothesis. Any firm not adjudged to be innovator and/or specialist in some respect cannot be successful long term. This is critical in identifying myriads of distinctive organizational competencies and success factors for all business architectures and deduce success pattern in it. A failure to do so can essentially lead firms running out of long term success as the seven of the responding firms reflected. The research seems to be viable to identify and relate firm strategies to their critical success factors and devise solutions for the future.Sponsorship:University of Borås</p

Resilient Local Manufacturing In Sjuhärad : A Delphi Study To Identify Enablers And Challenges

This report details a Delphi study undertaken within the ongoing research project “Resilient supply chains for local textile and clothing production in small series” with funding from Sparbanksstiftelsen Sjuhärad-No.20221947.  Specifically, this report summarizes the results of a Delphi study-designed to capture the level of agreement among practitioners operating within the Sjuhärad region in Western Sweden regarding the enablers and challenges of resilience within local textile and apparel manufacturing supply chains. These results are based on the perceptions of representatives from diverse companies that have had experience with local manufacturing and/or sourcing, which undertake activities within one or more value chain stages (textile manufacturing; garment manufacturing; retail). The two main steps of the Delphi study were, first to identify issues that are enablers and/or challenges-relevant to at least two companies within an interview round, and then to evaluate those issues using an online questionnaire to analyze and visualize levels of agreement.  A key argument of the study and larger research project is that both localization opportunities and challenges are significant within the textile and apparel industry, due to having high risk exposure with complex global supply chain structures. So, there is a need to understand the complexity of such location decisions in this context, including associated trade-offs for resilience. On one hand, localization can lead to enhanced flexibility, responsiveness, and customization due to reduced complexity and shorter supply chain distances, but on the other hand local supply chains can reduce adaptability related to global network structures and can be challenged by cost trade-offs. To understand this complexity, the supply network configuration approach can be helpful-to show structures that underpin resilience. By addressing the supporting structures and capabilities required for resilience, this report can support development of more resilient supply chains by highlighting what is required for improved resilience outcomes (Competitiveness; Growth; Reduced risk exposure; Reduced recovery time) and what challenges must be overcome. The key results of the Delphi study show moderate levels of resilience in the context, which is supported by several enablers, which can be challenging with insufficient levels. Agreement is found with enablers related to: Capabilities and performance priorities (situational awareness; quality; delivery/short lead times; sustainability) Processes (flexibility and agility; competence) Relationships (close and long-term relationships; transparency and communication) The only two challenges with high levels of agreement are competence limitations and high costs/cost trade-offs. However, the lack of both strong opinions and high levels of agreement about resilience indicates opportunities for improvement. The suggested need for managers to have strong situational awareness can be a key area to develop. In contrast, there were more mixed opinions found among respondents about other enablers/challenges, including location as either an enabler or challenge for resilience, and challenges related to exposure to external risks/disruptions. This suggests diverse experiences related to localization in a context of increasing external challenges. Additionally, the lack of strong opinions about digital tools/automation as an enabler suggests additional development is required, although several respondents emphasize significant recent investments as crucial. The lack of strong agreement about product-related enablers/challenges suggests different perspectives on small-series production, although the majority of respondents consider focusing on small volume, high value products to be more an enabler of resilience than a challenge. Overall, these findings indicate that managers must carefully consider localization with respect to cost trade-offs, limited industry know-how and varying levels of exposure to other challenges in high-cost contexts.  Looking forward, such insights related to enablers/challenges of resilience should be taken into consideration within decision-making processes-that define supply network configuration (products, processes, relationships, supply chain structures), with respect to implementation and scaling goals. Notably, the findings suggest companies are likely to need to invest in competence development, including process and technology-related skills, as well as sensing skills (awareness). However, careful consideration of cost trade-offs is required within such decision-making processes, which should be addressed throughout the supply chain from the perspective of actors with control over supply chains. Such decision-making considerations will be addressed in the following report within this research project.Funder: Sparbanksstiftelsen SjuhäradProject No.20221947Resilient supply chains for local textile and clothing production in small serie

Extended responsibility through servitization in PSS: An exploratory study of used-clothing sector

Purpose – The global textile-fashion industry is resource inefficient thus requiring higher product- service systems (PSS) intervention. Further, insight of how PSS extends corporate responsibility is rather limited; knowledge of which may contribute towards increased PSS viability. The purpose of this paper is to explore how companies operating with used-clothing PSS extend their responsibilities through servitization. Design/methodology/approach – An exploratory study of seven companies operating with various used-clothing PSS is conducted through semi-structured interviews and supplementary document studies. Findings – Six dominant ways through which servitization drives responsibility in used-clothing PSSare identified. These are through: value-adding services, product leverage, collaborative partnership, information transparency, awareness and platform-enabled networking. Two trade-offs exist in terms of their focus on physical process or digitalization, and developed by honing core competency or collaborative partnership. Further three differentiating attributes underlie these mechanisms for: raising awareness and/or improving transparency, collaboration in value creation and/or in promoting consumption, and product ownership and/or leverage. Research limitations/implications – A wide range of used-clothing PSS exists each in its own way extending responsibility. In-depth studies are required to investigate the relationship between servitization and extended responsibility for diverse PSS-types and on type of responsibilities they address. Practical implications – By identifying the key mechanisms or ways and their underlying characteristics companies can identify new servitization forms and ways to extend their responsibility, identify best practices and establish viability beyond the traditional measures, e.g. financial. Originality/value – So far no studies have investigated the role of servitization in PSS and how it extends corporate responsibility, especially in industries like textile-fashion, where both resource efficiency and responsibility is low