What is a circular supply chain?
Supply chain: the “backbone” of process fluidity and success for any business. Simply, it is defined as the “the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer” (Rouse). The main goal of any business is to provide a product or service to the consumer to make a profit. That is why the traditional supply chain model can also be known as a linear economy. However, in the fashion industry, we are seeing supply chain processes adapting and becoming more sustainable; introducing us to recycling and circular economies.
Linear Economy: Vertical Integration
To keep up with rapid consumer demand, many larger fashion corporations have adopted vertical integration. Vertical integration includes “shortening supply chains and securing direct control over design, production, and logistics, if not raw material supply” (Logistics Bureau). Essentially, the business has control over all of the supply chain elements: plan, develop/source, make, deliver, and return. Some advantages are short inventory turns (which means new and fresh inventory), improved agility (quickly responding to consumer demand), and most importantly, a responsive supply chain. Responsiveness allows the supply chain to adapt to new trends and speed up production times. Fashion designers used to showcase the newest collections twice a year. Now, it seems like the only way to stay profitable in the fashion industry is if you are continually creating new trends—what was popular last month is irrelevant the next. This has resulted in the industry producing at an all-time high. “The world now consumes about 80 billion new pieces of clothing every year. This is 400% more than the amount consumed just two decades ago” (The True Cost).
The problem with vertical integration, or a linear supply chain, is that product is made for continual consumption and ultimately, disposability.
Recycling Economy: Secondhand
The recycling economy can be best described as the secondhand model. In a recycling economy, clothing can be given a second lifespan and worn again. There has been an incremental rise in this supply chain process, as secondhand shopping has grown in popularity. The desire to have an ever-changing wardrobe has continued to be an important aspect to consumers; this is inevitable with how quickly trends surface, submerge and reemerge. Before the introduction to resale, it seemed that it was impossible to shop consciously while consistently adding to your wardrobe. However, the fashion resale market has disrupted this connotation and has been able to satisfy the wants of their consumer. The resale industry not only consistently provides a fresh inventory, due to the numerous amounts of sellers, but shopping secondhand is one solution to keeping used textiles in circularity and out of our landfills. The large transition to shopping secondhand has helped many other brands revamp their business strategy; they are recognizing the need to appeal to the changing consumer demand; sustainably conscious while providing fresh trends. The CEO of thredUP states “the resale customer is no longer somebody else’s customer, they are everybody’s customer. Mass market or luxury, if people can find a high-quality product for much less, they’ll choose used” (James Reinhart).
However, the problem with the recycling economy is that is does not solve the problem of clothing inevitably ending up in our landfills. Although clothing is given a second life, it will eventually become unwearable and be discarded as waste.
Circular Economy: Closing the Loop
A circular economy encompasses a closed loop supply chain; keeping minimal amount of clothing waste out of our landfills for as long as possible. A circular economy utilizes the recycling economy, by giving clothing an additional lifespan, but also repairing when possible. Businesses adopting models that offer repairs, such as Patagonia, will help people reuse their garment, instead of trashing it. One of the most important aspects of a circular economy is the sourcing of materials. Using high quality textiles that last longer than synthetic fibers will help lengthen a garment’s lifespan. However, with the continual production of clothing, there will always be residual waste. Therefore, sourcing natural materials that biodegrade and compost will help keep harmful waste out of our eco-system.
Moda Verde is dedicated to help you find brands that source the best materials, utilize the most sustainable supply chains, and offer fashion forward pieces that you can feel good buying!