Purpose of this paper:

The concept of closed loop value chain maximise the utilization of product. There are different ways to close the loop, reuse is most sustainable ways to do. Purpose of this paper are twofold; first to understand the activities of reuse based closed loop clothing value chain in Norway, Sweden and UK; and second to explore, how multinational charities and organizations in reuse based business can extract maximum values from discarded clothes.

Design/methodology/approach:

The present study adopted a single case study approach to understand the reverse logistics of clothes in three countries. Multiple sites were studied in different cultural environments to enhance the robustness of case study approach (Lau, 2012). Direct observation was made to understand the process in seven organizations. Eight face to face interviews were conducted with operation heads to understand the practices in-depth. These visits and interviews were made between September 2015 and February 2016. All interviews were transcribed and analysed with help of qualitative analysis software Nvivo 10. Different themes of value creation were categorised and used for cross-comparison of findings. Theoretical lens of resource based view has been used to understand to capability of a firm to extract maximum value from discarded clothes. In addition, we also examined the benefits of outsourcing different operations to supply chain partners in the absence of in-house facilities.

Findings:

Organizations endeavour to invent, re-invent and implement new ways to collect, sort and reprocess the used clothes. Collection events are organised in the different shopping malls to create awareness and increase the amount of collection. Contracts are signed with schools, local municipality, companies and postal departments to improve collection quality and quantity. After collection, the used garments are sorted and segregated into different categories. Sorting may be considered as one of the crucial stage which can provide competitive advantage to an organization in the second-hand clothing business (Ruiz-Torres, Ablanedo-Rosas, & Mukhopadhyay, 2013). Several firms had state-of-the-art machineries to simplify and handle the material management during sorting process efficiently. Some of the organizations are trying to have sensor based sophisticated technologies to reduce manual material handling. In contrast, a few companies have moved back to manual system to achieve high quality and productivity. Also, we observed that there is a scarcity of reprocessing facilities. As a result, a garment having small defects also gets mix up with discarded clothes. Some firms have small facility of washing and ironing, which is generally used for vintage garments.

Success of an organization depends upon its ability to extract value from collected garments. Most of the firms are selling best quality of products in their own shops in the domestic markets while exporting inferior quality to developing counties. The second hand clothing companies are redefining their stores as an exclusive for vintage or redesign to improve domestic sales. Private labels have emerged to sale completely redesigned garments. Concept of selling products on the basis of weight in comparison to pieces has been adopted to move normal quality goods from retail stores. Some organizations have strengthened their own business network, hence they could get good price for the exported items. On the other hand, most of the selected firms export the used garments with the help of mediators located in Netherland, Belgium and Germany. The defected and damaged clothes are transported to energy station for incineration by paying small amount of user fees. A few organizations down cycle the damaged clothes to new products on their own or with the help of their supply chain partners. The reason that may be attributed is the lack of chemical and mechanical recycling facilities. A proper integration with recycling and rag making companies would enable organisations to obtain more value from textile waste and increase the revenue.

Relevance/Contribution:

The present study is an attempt to enhance the understanding of clothing reuse business in Norway, Sweden and UK. Every organisation try to acquire valuable and rare resources, like ‘one touch’ or sensors based sorting facility to get competitive advantage. The research also suggested that multinational charity and organisation performance mainly depends on its organizational ability to exploit resources available inside and outside the firms. Paras, Ekwall, and Pal (2015) case study focus on the local charity organisation those who have limited resources and organization skill. Resultantly value creation from collected goods is much less compare to value created by multinational charities and organisations. This can be implied that used clothing firms should focus on acquisition of valuable and rare resources to do effective collection and sorting. Firms should also organized resources within and outside firms by developing network throughout supply chain to maximise the revenue. This study is carried out in three European countries. It can be extended to other geographical region or more number of empirical evidence to achieve saturated result.

References:

Lau, K. H. (2012). Demand management in downstream wholesale and retail distribution: a case study. Supply Chain Management-an International Journal, 17(6), 638-654. doi:10.1108/13598541211269247

Paras, M., Ekwall, D., & Pal, R. (2015). Testing a conceptual model of circular clothing value chain with product reuse in Swedish contest. Paper presented at the Global Cleaner Production & Sustainable Consumption Conference.

Ruiz-Torres, a. J., Ablanedo-Rosas, J. H., & Mukhopadhyay, S. (2013). Supplier allocation model for textile recycling operations. International Journal of Logistics Systems and Management, 15(1), 108-124. doi:10.1504/IJLSM.2013.053241