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Sustainability Integration in Luxury Fashion Supply Chains: an Empirical Investigation of Leather and Textiles in Italy

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Sustainability Integration in Luxury Fashion Supply Chains: an Empirical Investigation of Leather and Textiles in Italy EUROPEAN DOCTORATE IN INDUSTRIAL MANAGEMENT (EDIM) Universidad Politécnica de Madrid Escuela Técnica Superior de Ingenieros Industriales Politecnico di Milano Dipartimento di Ingegneria Gestionale SUSTAINABILITY INTEGRATION IN LUXURY FASHION SUPPLY CHAINS: AN EMPIRICAL INVESTIGATION OF LEATHER AND TEXTILES IN ITALY 2018 The Author: Ph.D. Candidate Hakan Karaosman The Supervisory Team: Assistant Professor Gustavo Morales-Alonso, UPM – Thesis supervisor Associate Professor Alessandro Brun, POLIMI – Thesis Supervisor Professor Raffaella Cagliano, POLIMI – Thesis Discussant Senior Lecturer, Patsy Perry, The University of Manchester – External Collaborator This research was conducted within the framework of the European Doctorate in Industrial Management (EDIM) funded by the European Commission’s Education, Audio-visual and Culture Executive Agency (EACEA) under Erasmus Mundus Action 1 programs. The research was carried out under the supervision of Universidad Politecnica de Madrid and Politecnico di Milano. Furthermore, the Consejo Social de la Universidad Politecnica de Madrid financially supported the research during a four months long visiting period at the University of Manchester School of Materials. Preface The candidate has published the following scientific contributions during his four year long double degree PhD studies funded by the European Commission and hosted by Universidad Politecnica de Madrid and Politecnico di Milano. Parts of this PhD thesis have been utilised in the academic outcomes listed below. Karaosman, H., Perry, P., Morales-Alonso, G. and Brun, A. (2017), “Integrating Sustainability in Luxury Fashion Supply Chains: Empirical Investigation of Leather and Textiles in Italy, submitted to Journal of Business Research Karaosman, H., Brun, A. and Morales-Alonso, G. (2017), “Vogue or Vague: Sustainability performance appraisal in luxury fashion supply chains”, in Gardetti, M.A. (Ed.), Sustainable Management of Luxury, Springer, Singapore, pp. 301–330. Karaosman, H., Morales-Alonso, G. and Brun, A. (2017), “Strike a pose: Luxury for sustainability”, in Gardetti, M.A. (Ed.), Sustainable Management of Luxury, Springer, Singapore, pp. 145– 162. Karaosman, H., Morales-Alonso, G. and Brun, A. (2016), “From a Systematic Literature Review to a Classification Framework: Sustainability Integration in Fashion Operations”, Sustainability, Vol. 9 No. 1, p. 30. Karaosman, H. and Brun, A. (2016), “The myth of sustainability in fashion supply chains”, in Vecchi, A. and Buckley, C. (Eds.), Handbook of Research on Global Fashion Management and Merchandising, IGI Global, pp. 481–509. Karaosman, H., Brun, A. and Morales-Alonso, G. (2016), “Slow fashion and sustainability: The luxury impact”, in Vecchi, A. and Buckley, C. (Eds.), Handbook of Research on Global Fashion Management and Merchandising, IGI Global, pp. 468–481. Karaosman, H., Morales-Alonso, G. and Grijalvo, M. (2015), “Consumer Response to CSR in a Cross Cultural Setting”, Cogent Business&Management, Vol. 2 No. 1, pp. 1–18. Karaosman, H., Morales-Alonso, G., Grijalvo, M. and Brun, A. (2015), “The impact of ethical fashion on Spanish consumers”, Direccion y Organizacion, Vol. 57, pp. 63–73. Karaosman, H., Mermod, A.Y. and Yuksel, U. (2014), “Corporate social responsibility in the European Union: An assessment of CSR strategy”, in Idowu, S.O., Frederiksen, C.S., Mermod, A.Y. and Nielsen, M.E.J. (Eds.),Corporate Social Responsibility and Governance: Practice & Theory, Springer, Berlin, 1st. ed., pp. 317–337. This work is dedicated to the loving memory of two angels who taught me to be a person that is to be guided by ethical and moral principles. Thank you GÜNAY KARAOSMAN & İSMAİL KARAOSMAN Acknowledgements ‘There is no beauty in the finest cloth if it makes hunger and unhappiness’ – Gandhi My intention was to create a body of work that would use scientific research as an instrument to capture the profundity of sustainability in fashion by giving a voice to some of our struggles and by learning from the past not to repeat the same mistakes. This work invites everyone to the act of empathy and to start changing our minds to spread sustainability, accountability, love and kindness across fashion supply chains. There exist many people whose support, faith and kindness have been pivotal to allow me to successfully finish this journey. First and foremost, I would like to thank Paolo Trucco whose vision of the researcher that I could be made everything happen. I also thank Raffaella Cagliano whose wisdom and constant support enabled this work to deepen its significance. I am indebted to Alessandro Brun for his trust, guidance, vision and support for my work that has become one of my biggest achievements. I am grateful to Gustavo Morales Alonso for being the person who came along when I needed support the most. I am also indebted to Patsy Perry that brilliantly helped me to improve my skills in many ways and that guided me to think big, dream big and work hard to make things possible. Furthermore, I thank to Cali Nuur and Mats Engwall for letting me to be part of the EDIM network and for their truly inspiring dedication. I am also thankful to Ruth Carrasco and Joaquin Ordieres for their generosity and kind support during my academic journey. I would like to particularly thank Ebru Susur. Nobody knows me better and I am eternally grateful for her existence in my life. I am so privileged to be the little brother of my wonderful sisters, Semra Karaosman Vatansever, Nurcan Karaosman Gül and Necla Karaosman whom I love very much. Special thanks to my dearest friends Merve Tunalı, Lusin Hıdıroglu, Sehnaz Kılıç, Hande Baybar, Duygu Ergenç and Emrah Karakaya for their continuous support and endless love. There is no way for me to explain what Martina Sani, Francesca Panzeri and Susana Moreno mean to me. I confronted some of my biggest fears and learnt to emerge as a stronger person with the help of to their light. I would very much like to acknowledge my dear friends Veronica Leon, Giovanni Pirovano and Elena Pellizzoni, and my wonderful colleagues Isaac Lemus, Isabel Herran, Federica Ciccullo, Filomena Canterino, Laura Grassi, Violetta Cannas, Claudia Manca and Raul Pulido. Thank you all for being there for me! I do want to sincerely thank Laura Catellani whom I am honoured to call a friend. Additionally, I am grateful to Elena Cortiana, Marta Re Ferre, Mirko Beduzzi and Mirja Calgaro for their kindness, patience and great professionalism to help me make the magic happen at Politecnico di Milano. I would like to specially thank Mauro De Piazzi whose encouragement has been the most significant component of anything and everything that I dare to accomplish. This work is yours as much as it is mine. Lastly, I should thank to the city of Milano where I have found my voice. I am glad to share my message with you all and to know that this is only the beginning… Love beyond forever, Hakan Karaosman Table of Contents 1. Introduction 1 2. Theoretical Background 11 2.1. Sustainability Development 11 2.2. The Evolution of SSCM 16 2.3. Luxury Fashion: A Historical Outlook 29 2.4. Luxury Fashion and SSCM 38 3. Research Design 43 3.1. Research Objectives 43 3.2. Research Framework 45 4. Research Methodology 46 4.1. Research Design and Methods 46 4.2. Sampling 51 4.3. Data Collection 54 4.4. Data Analysis 58 5. Results 61 5.1. Study I: Systematic Literature Review Taxonomy: Sustainability in Fashion Operations 61 5.2. Study II: Qualitative Multiple Case Study Sustainability Integration in the Luxury Fashion 72 5.2.1. Within Case Analysis Case 1: Sustainability in the Textiles SC 72 Case 2: Sustainability in the Leather SC 111 5.2.2. Cross Case Analysis 136 Category 1: Sustainable Product Design Category 2: Operations Management Category 3: Sourcing Management Category 4: Organizational Commitment 5.3. Barriers, Enablers and Critical Issues of Sustainability in Luxury Fashion SCM 155 6. Theoretical Discussion 161 7. Conclusion 169 7.1. Theoretical Implications 173 7.2. Practical Implications 174 7.3. Social Implications 174 7.4. Limitations and Future Research Avenues 176 References 178 Appendixes 187 1. Theoretical Constructs and Topic Guide 2. Sustainability in the Textiles SC – Product, Process, SC 3. Sustainability in the Leather SC – Product, Process, SC 4. Comparison of Sustainability in the Textiles and Leather SCs – Product, Process, SC 5. Philosophical Stance Abstract This study explores the extent to which both environmental and social sustainability is integrated in luxury fashion supply chains producing textile garments and leather shoes in Italy. Firstly, a systematic literature review was conducted in order to categorise environmental and social sustainability practices implemented in fashion operations. Subsequently, from a natural resource-based view perspective, a multiple case study method was adopted, covering ten companies located at multiple stages of Italian textiles and leather supply chains. To investigate sustainability integration in luxury fashion supply chain management, industrial practices were systematically decomposed into product, process and supply chain levels in accordance with the three dimensional concurrent engineering framework. Hazardous chemical elimination and organic material use appeared to be the emergent product-level practices that deliver operational benefits such as cost reduction and market benefits such as improved product quality. Process-level practices, on the other hand, mainly focused on water and energy reduction due to cost reduction
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