A Sustainable Supply Chain in Clothing Industry
The paper addresses the issues of sustainable supply chains in the clothing industry. It points out the main threats in the areas of social and environmental risk, resulting from the location of production in the low production costs countries, i.e. Southeast Asia. The biggest social risk related to this it is the failure of manufacturers located in the Far East to comply with human rights, labor law, health and safety rules, etc. After the tragedy at the Rana Plaza clothing factory in Bangladesh, global clothing companies ordering clothing production in the Far East, including the largest Polish company clothes from LPP SA, have started to take action to improve work safety in Bangladesh. The article presents simulations carried out by the authors regarding the impact of the amount of expenditure incurred in improving the security of suppliers in Southeast Asia on the profit margins of enterprises in the clothing industry. Two options were studied - increase in expenditures, which had little impact on the reduction of profit margin, and not incurring such expenditures (hence - deterioration of opinions about the company and a decrease in revenues), which had a large impact on the profit margin. The authors presented recommendations for clothing industry companies ordering production in countries with low production costs, concerning the reduction of social risk in global supply chains.(original abstract)
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