What is digital supply chain management?

How can it help the leather supply chain in the fashion industry?

According to Johnson “it can either refer to managing the digital aspects of a physical supply chain, or managing the supply chain of digital products.”

In the first case the team responsible for digital supply chain management is the same as the team responsible for any supply chain functions (which could be sales, manufacturing, logistics, etc.); and also with the same main goals as improving efficiency and increasing margins.

But with an added layer of digital technologies as for example predictive analytics, robotics, IoT, etc.

In the second case, digital supply chain management includes also the technology companies involved in the delivery of any digital product. For example, the digital supply chain of an e-commerce website includes the website’s developers, its administrators, the cloud services company that hosts the website’s data, the CMS provider, the devices that consumers use to access the website and every third-party technology provider whose code provides functionality to the website (e-commerce plugins, personalized recommendation engines, advanced analytics services, inventory tracking solutions, custom product builder, chatbots).

The definition proposed above provides a first idea of ​​the concept of Digital Supply Chain Management (DSCM) but it is rather summary and simplistic.

5 steps-model to successfully transform the supply chain in a digital one

Actually, according to P.Farahani et al., developing a mature Digital Supply Chain Management level also requires an organizational change process that reaches every corner of the internal and external supply network, and Supply Chain Managers have to find answers on the question on how to make use of new technological innovations and how to bring them on a cohesive agenda and roadmap.

Robinson suggests a 5 steps-model for those companies who wish to achieve a truly successful transformation of the existing supply chain into a digital one: 

1. Understand the starting position and the risk involved, in particular assess the maturity of the suppliers and the overall risk posed;
2. Define the strategy and be open from the outset;
3. Have a sustainable, long-term approach by taking proactive steps to ensure system stability over time and in varying business and financial conditions;
4. Proper research and analysis defining expectations and mutual obligations;
5. Segmented rollout and capability development: after the digital supply chain management system has been formulated it should be brought into action in phases, starting from the set up of a pilot project. After a successful pilot, the rollout should start with those supply chain where expected returns are the highest.

How digital supply chain management can help leather industry through traceability?

Digital Supply Chain Management can be very complex, but when it comes to the supply chain behind leather goods in the fashion industry, things can get more difficult and fragmented. 

Being aware of its stages and key phases is essential to implement fashion traceability.

From the slaughterhouse to retail, leather undergoes a range of treatments in order to become the workable material that makes the final product possible. Let’s start to explain all the steps.

STEP 1

Curing is the first stage of leather manufacturing. During this phase the hides are treated with salt in order to prevent bacterial growth and removing water. Then, the hides are soaked in water to remove the salt and increase the moisture.

STEP 2

Curing, soaking and other preliminary operations lead to tanning. At this stage, the hides are processed in order to alter their protein structure and obtain a durable material.

The process can be carried on using chrome, natural tannins or alternative chemicals such as alum, zirconium, titanium, iron salts, or a combination thereof.
The choice of some chemicals instead of others can have a strong influence on the sustainability of the manufacturing, minimizing its environmental impact, and keeping track of all the used chemicals could also come in handy when it comes to promoting virtuous products.

How does traceability affect social responsibility?

As far as social responsibility is concerned, traceability plays a key role in assessing the sustainability of the whole leather chain and spreading good practices such as the ones related to raw material issues (eg. animal welfare).

Despite traceability meets both commercial requests and the ethical concerns of consumers, implementing it is not an easy issue to deal with. 

The lack of compulsory certifications along the chain, the number of involved operators and the variability in tools (eg. tags, marks, paper or electronic documents) make the whole chain fragmented and hard to keep track of.

This can affect sustainability, in a sector such as fashion industry could be a serious problem.

CITES products, which are covered by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington Convention), are an example of the degree of transparency that can be achieved by implementing accurate traceability protocols.

Getting to know where the animals come from, how they were bred, and how they were taken care of would improve animal welfare and reassure concerned consumers, while keeping track of all the substances involved in the manufacturing would encourage the use of sustainable chemicals instead of polluting ones.

Conclusion

As we have seen in this articles, Digital Supply Chain Management especially in the leather and fashion industry, can be very difficult and a full-time job. But it’s necessary if we want to build a trustful relationship with our suppliers and with our final customers.

This is the only possible way to build a solid and efficient value chain.