This report details the third study undertaken within the research project “Resilient supply chains for local textile and clothing production in small series” with funding from Sparbanksstiftelsen Sjuhärad.

Specifically, this report summarizes the results of a feasibility study focused on understanding the perspectives of practitioners operating within the Sjuhärad region in Western Sweden regarding how feasibility it currently is to implement and scale local textile and apparel manufacturing supply chains. These results are based on the perceptions of representatives from five case companies that have had experience with local sourcing, that are diverse in their company characteristics and local sourcing products/projects.

Feasibility is assessed in this study through a multidimensional approach, that seeks to cover different aspects of configuration, including products, technology/processes, supply chains/business models, as well as cost/financial feasibility and dynamic capabilities (proactive and reactive capabilities to implement and scale local supply chains). This multidimensional feasibility assessment targeted answering the two questions addressed:

■    What is the feasibility of local textile and apparel supply chains (for small-series production)?

■    How can the feasibility be enhanced to scale local textile and apparel supply chains?

In answer to the first question about the feasibility of local textile and apparel supply chains (for small-series production), the results highlight mixed/conflicting assessments of the five cases studied-some of which represent more than one local product or project. While the results show that the scaling/scalability of local activities is even more challenging than implementation, two cases do show interest or in-progress efforts to scale up and/or continue their local activities. Such scaling is most often with a combination of at least two product/business model characteristics that maximize value with higher costs, like customization focused on simple or standardized products, or remake products that have some customization on-demand.

In answer to the second question, regarding how to improve the feasibility and thus scalability of local textile and apparel supply chains, the results suggest the crucial need to overcome supply chain and business model challenges (supplier/customer), as these were faced by all five cases studied. Such challenges include dependence on customer demand, communication/marketing to customers, logistics challenges and sourcing risks both globally and locally, and designing scalable business models for repair or remake. Within such business models, cost and financial feasibility is mostly challenging, and technology and process difficulties remain to be overcome. However, despite challenges related to balancing higher costs with higher value for end-customers, one company still intends to scale up or replicate projects in the future because of sustainability goals/drivers. This case, and the other one continuing local sourcing and looking to scale up, show the importance of investing in internal resources and capabilities to enable scaling of local activities, and targeting slow growth and learning from experimentation (in other words, dynamic capabilities).

The cases studied in this report show different approaches to such local supply chain opportunities and suggest various drivers or motivations for implementation. However, despite the potential for co-location to enable higher levels of resilience in supply chains, these benefits are not as often discussed as motivations as compared to sustainability/circular economy goals. This suggests that companies may not yet understand or see the benefits of local supply chains for proactive and reactive resilience capabilities, or that the multidimensional challenges found are barriers to scaling up and achieving these benefits. Such challenges include local sourcing being considered to be, or found to be, higher risk than global sourcing, which requires efforts to reduce these risks, for example, through enhanced collaboration (among suppliers and/or with brands). Additionally, the promise of local sourcing to reduce overproduction (and overconsumption) is not widely identified, suggesting this perspective can be strengthened in the future. 

The findings show that dynamic capabilities are already frequently available to the brands studied, as they seem to have high readiness to implement such local activities. Thus, to achieve further sustainability and resilience benefits, companies can seek to replicate local activities-to balance their efforts focused on learning/development with their use of this knowledge gained from previous projects.