Policy 6. Eliminate excess product manufacturing by balancing supply to demand.
Surplus production is wasteful and has negative impacts on the environment as well as the financial performance of companies, thus impacting two dimensions of sustainability. Ideally, companies would make exactly the right amount of merchandise that can be sold at full price. When this does not happen, a company may offset some of the negative financial impact by selling its excess production at an extremely low price to get rid of the garments, but when an entire industry is creating too much product, something is going to end up in the landfill—whether it is the new, unsold garments or garments that were prematurely replaced.
In addition to the materials that are now wasted and unused, the resources, such as water and energy, were also wasted in the production of this unnecessary product. Energy is used to initially ship the garments to the sales location, but further shifts across the country are likely to use even more energy as the company looks for ways to get rid of the merchandise. By matching supply to demand, less money is wasted in the production, transportation, and storage of unsold merchandise.
Balancing supply with demand might be accomplished through just-in-time production methods, which are part of lean manufacturing. In the book LeanThinking (1996), James P. Womack and Daniel T. Jones proposed lean principles that involve understanding what the customer values in the product or service, understanding the value stream for the product, identifying the waste produced, and making the product flow seamlessly from concept to consumer. Finally, lean production reduces the number of steps, the time, and the information required during the manufacturing process.1
Working to balance supply with demand will require more accurate forecasting, advanced replenishment strategies, and redefinition of objectives and rewards in terms of matching production and sales, rather than in terms of total sales. The Spanish retailer Zara is well known for its “fast fashion” strategies where a limited volume of product is often created in facilities located geographically close to the market. This quick delivery of products results in less waste since products are designed to meet current consumer demands. The Zara example provides ideas for how to balance supply with demand for fashion products; however, the possible negative effect of “fast fashion” is that it may foster a culture of disposable fashion where fashionable garments are quickly discarded for the latest offering.2
Automatic replenishment systems have been used by leading retailers for decades and they address the balance of supply with demand for basic products.3 Lean production methods are being adopted by sports product companies such as the adidas Group and Nike, Inc.4 While these methods can create efficiencies in manufacturing and potentially eliminate waste, care must be taken to assure that the methods do not create problems with worker health and safety.5
- Womack, J.P., & Jones, D.T. (1996). Lean thinking. New York: Simon & Schuster. [↩]
- Fasanella, K. (2007, April 10). Is fast fashion sustainable? Available at http://www.fashion-incubator.com/archive/is_fast_fashion_sustainable/ [↩]
- Abernathy, F.H., Dunlop, J.T., Hammond, J.H., & Weil, D. (1999). A stitch in time: Lean retailing and the transformation of manufacturing—lessons learned from the apparel and textile industries. New York: Oxford University Press. [↩]
- http://www.adidas-group.com/en/sustainability/_downloads/statements/adidas-response-to%20ITG-CCCreport-210408.pdf; http://www.nikebiz.com/responsibility/documents/3_Nike_CRR_Workers_C.pdf [↩]
- Brown, G.D., & O’Rourke, D. (2007). Lean manufacturing comes to China: a case study of its impact on workplace health and safety. International Journal of Occupational and Environmental Health, 13, 249-257.
Allwood, J.M., Laursen, S.E., Rodriguez, C.M., & Bocken, N.M.P. (2006). Well dressed? The present and future sustainability of clothing and textiles in the United Kingdom. Cambridge: University of Cambridge. Available at http://www.ifm.eng.cam.ac.uk/sustainability/projects/mass/UK_textiles.pdf. [↩]
