FBUY3000 Sourcing and SupplySustainable Report

Word Count: 3819 words

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AbstractThis report will analyse a lace insert midi dress for Missguided AW21/22 and discuss its critical path process across the supply chain process. Justification for sourcing the product from Turkey will be deliberated. Logistic, quality management, and product lifecycle management are addressed to ensure the product is delivered on time with the desired quality. Secondly, will analyse Missguided current CSR policy and recommend an improved sustainable and efficient method of bringing the product to market.

While cost, leadtime and quality are important for a fast-fashion company like Missguided, Turkey is an important sourcing country to meet these requirements. Sustainability which is a key aspect in the fashion industry currently should be prioritised to improve TBL. Missguided must list clear goals and commitments within their CSR policy. Greenwashing must be avoided and collaboration between different companies is key to develop sustainability. This report has recommended Missguided to invest in recycled-polyester, zero waste pattern cutting and AR virtual try-on to improve sustainability practices. Although the cost of production may increase at the beginning while investing, the resources saved through these circular business model will be reflected in the long term.

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Contents

1. Introduction 31.1Retailer Introduction 31.2Target Market and Market position 4

2. Product and Packaging 62.1Product 62.2Care Label 72.3Packaging 9

3. Sourcing Decisions 103.1China VS Turkey VS UK 103.2Critical Path 113.3Logistics 113.4Quality Management and PLM 12

4. Costing 145. Corporate Social Responsibility (CSR) 15

5.1CSR Comparison 155.2Care Label 175.3Packaging 18

6. Recommendations 206.1Material 206.2Zero Waste Pattern Cutting (ZWPC) 226.3Augmented Reality (AR) Virtual Try-On 26

7. Conclusion 298. Figure List 309. Table List 3110. Reference List 3111. Appendix 36

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1.IntroductionThis report will analyse a lace insert midi dress for Missguided AW21/22 and discuss its critical path process across the supply chain process. Secondly, will be recommending an improved sustainable method of bringing the product to market.

1.1 Retailer IntroductionMissguided is a UK-based online fast fashion retailer which launches up to 1000 new products every week. The brand mission is to empower females and commit to produce affordable, but not disposable products. The brand is working towards sourcing ethically and sustainably therefore has established a team that is dedicated to developing their supply chain and reviewing their suppliers’ operations, and has set up CSR policy to follow. (Missguided, 2021)

Fig.1 Sabanoglu, Gross profit of Missguided Limited worldwide 2013-2018, 2020

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Fig.2 Sabanoglu, Operating loss/profit of Missguided Limited worldwide 2013-2019, 2020

In 2016, Missguided opened its first physical store in London and has soared sales by 75% (Jahshan, 2017) and rose profit in 2017 (Fig.1). Although stores attracted customers, revenue generated is inadequate to cover the operating cost, resulting in a significant loss in 2018 (Fig.2). Therefore Missguided announced to shut down the store in 2019 and shift focus back to the online market. (Jahshan, 2019 and Nazir, 2019)

1.2 Target Market and Market positionMissguided heeds global influences, social media, street style and popular culture to provide fast, young and edgy fashion to the millennials, including tall, petite and plus-size ranges, at a low price. (Fig.3)(Missguided, 2020)

The brand has a range of competitors (Fig.4) including traditional high street brands as most retailers have operated in e-commerce. While online competitors such as PrettyLittleThing and Nastygal will be seen as main competitors in terms of price, speed to market and style. High street brands

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with stores, allowing customers to try and see the quality of the products, are also important competitors. (Wood, 2016)

Fig.3 Chan, Customer Profile, 2020

Fig.4 Chan, Market Position Matrix, 2020

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2.1 Product

2.Product and Packaging

Since lockdown is gradually lifting in the UK and less restriction in some countries, this report will plan to source a trend-lead occasional dress (Fig.5), suitable for Halloween and prom dress, from Turkey. It will be a small trial order (750 pieces) launching online on 11-Oct-2021 for 3 weeks to test the market reaction on party dresses. Missguided often offers UK4-18 or UK6-14. As a trial product, UK6- 14 will be ordered. If ROS is high, may consider to repeat or buy other sizes. £31 is a mid-modal price for midi dress in Missguided (Missguided, 2020) and the cost will be discussed later in Section4. This product will be made from polyester which is a strong fabric at low cost.

Fig.5 Chan, Product Specification of Lace Insert Midi Dress, 2020

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2.2 Care Label

Fig.6 Chan, Care Label of Black Lace Insert Dress, 2020

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1. Brand Name MISSGUIDED First Page2. Size In UK, EU, US, AUS First PageCare Instruction

3. 30 GINETEX wash care symbols (Appendix 1)

Cut down text in different languages Sustainable messages: Advise to wash at 30°c and line drying to

lower carbon footprint GreenEarth Cleaning: dry cleaning

process uses pure liquid silicone, a safe natural by-product of sand. 100% non- toxic, reduce consumption of steam,water and electricity, better for clothes and the environment.

First Page

4.

7.GreenEarth Cleaning– End of First Page (GreenEarth label will be change to Clevercare, see Section 5.2 for details)

5. Flammability ‘Keep away from fire’ in red block capitals (Compulsory to state on care label)

First Page

6. COO Turkey English: First Page

Other Languages1: Second Page Onwards

6. Fibre Composition 100% Polyester (Compulsory to state on anywhere of the product)

6. Written Care Instruction

Wash with similar colour

8. Traceability Product Number, Supplier Code and Head Office Address

Ending Page

Table.2 Chan, Care Label Content, 2020

Flammability performance is legally required to state on the care label to protect consumer rights and safety. According to UK Government Guidance, it is adequate to indicate fibre content on the packaging, swing tickets or gummed labels. However, stating it on sewn-in label makes it easier to recycle an end-of-life product. Including care instruction for the garment is important although it is not legally required in the UK or the EU. It allows customers to maintain the garment appropriately. Retailer also avoids liability for the cost of repairing or replacing wash damaged if the customer washes it improperly. (Gregory, 2020) GreenEarth/Missguided is advertised on the label although the dress is not appropriate for dry cleaning because it does not only indicate the location of GreenEarth dry cleaner worldwide but also offer tips and advises on home laundry to reduce the impact on the environment. (Missguided, 2020)

1 Including Arabic, Chinese, Danish, Dutch, Finnish, French, German, Norwegian, Polish, Spanish, Swedish

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2.3 PackagingMissguided employ despatch sacks and polybags as packaging for all garment products. Missguided has committed to implement a closed-loop recycling process for the plastic packaging wastes through partnership with Mainetti (UK) Ltd. ‘All returned plastics will be re-processed at their Wrexham recycling centre at North Wales, the final result of which are polyethylene pellets ready to be used in the extrusion of new bags.’ (Missguided, 2020) Despatch sacks are now manufactured from 100% recycled plastics, while polybags are at least 50% recycled content. Both are printed with solvent free water based inks. (See Section 5.3 for details on comparison with other brands and recommendation on improving)

Fig.7 B, Packaging of a Missguided Dress, 2019

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3.Sourcing Process3.1 China vs Turkey vs UK

Table.3 Chan, Sourcing Destination Suitability, 2020

Table.3 illustrates the main factors when considering which country to source this product from. The final decision of sourcing from Turkey is based on a balance between cost and leadtime, which are the sourcing priorities for the retailer. Jackson and Shaw (2001) point out it is vital to assess the benefits of overseas sourcing and quicker local suppliers for fast fashion. The UK and Turkey have signed a Free Trade Agreement allowing duty-free trading. Turkey has saved cost on duty and freight, making cost-competitive. The Iceberg Theory suggested by Hines (2000) (Fig.8) shows clearly the range of hidden costs for sourcing overseas. Jackson and Shaw (2001) note the most damaging risk is the cost of lost sales due to late delivery and the loss is very hard to calculate accurately. Late delivery lost sales are rarely recovered as customers will simply go to the competitor’s website. While Turkey has transportation options of one week by truck or 3 days by fast truck, there is greater flexibility on transport leadtime. Robson (2020) discuss the importance of keeping stock controlled for online brands. Sourcing from Turkey allows shorter leadtime and quick response manufacture to maintain minimal stock. Turkey government is also supporting sustainable manufacturers. Most manufacturers have established a CSR department for ethical, sustainable and clean production. (Bearne, 2017) (Refer to Appendix 2 for detailed SWOT analysis)

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Fig.8 Hines, The Iceberg Theory of Cost Comparison, 2000

3.2 Critical Path

Table.4 Chan, Critical Path Template, 2020This product is expected to launch on 11-Oct-2021. As Missguided is an online retailer, a week on allocation is saved. Hence, it should arrive into the UK DC 1 week before the launch for quality check. Sourcing from Turkey will take 1 week by truck; production for 750 pieces will take around 1.5 weeks; approved fabric and trims will take 5 days to arrive factory for production. As it is a small quantity, it will take 2 weeks for fabric production and all approvals; 1 week for choosing fabric and confirming fitting; 1 week ahead for booking. Thus, leadtime for this product is 6 weeks in total.

3.3 LogisticsFree carrier (FCA) is the most common shipment term for sourcing from Turkey by truck. Cost is flexible that buyer arranges the main carriage while seller responsible for export clearance and loading the goods onto the truck. However, buyers need to manage all risks and insurance. (Incoterms, 2020)

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Jackson and Shaw (2001) point out International freight are often complex and retailers employ an in-house expert to control all aspects or outsource the responsibility to a specialist agency. Outsourcing agent is often more expensive. Therefore, Missguided will employ an in-house expert.

Fig.9 Incoterms, Free Carrier (FCA), 2020

3.4 Quality Management and PLMDesign of the product is agreed in the head office design team. Designers transmit design specification electronically to the supplier for manufacturing. 3D design software CLO will improve and speed up buying decisions and processes. (Jackson and Shaw, 2001 and clo3d.com, 2020)

Fig.10 CLO, 3D Virtual Sampling, 2020

Missguided is trying to develop a more focused supplier base to improve reliability in quality and delivery and have more effective management and communication. Since Turkey is not one of the company’s focus sourcing destination, sourcing through an agent may be needed. (Missguided, 2020) Since factory visit cannot be made during Covid, Missguided can utilise the relationship built with Next and ASOS as a third party brand on their websites. Both Next and ASOS have developed sourcing offices in Turkey with developed CSR policy, Missguided can source this trial product through their sourcing office as an agent for standardisation of administrative procedures

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and quality control following the product specification provided. (Jackson and Shaw, 2001) Payment of the order will be the most common method - letter of credit and open account of 30 days from delivery into the DC.

Missguided is working with Galaxuis Systems Ltd which provide cloud-based software with real-time production management information. The system also includes related pay for production workers, gives true visibility of manufacturer location, preventing unauthorised subcontracting. This software will improve production efficiency by eliminating production bottlenecks and reduce costs by increasing production volume from fixed overhead. The implementation cost and maintenance charges for this cloud-based software are extremely low and therefore even small manufacturers will be able to install one. (Missguided, 2020)

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4.Costing

Fig.11 Chan, Costing Elements, 2020

Fig.10 illustrates half of the cost contributed to fabric. It is a plain woven fabric which is cheap. As UK6-14 are relatively small sizes, fabric rating is 3 and fabric usage is 85%. The garment is slightly complex, estimating 20 minutes to make one and Turkey’s labour fee is high. However, sourcing from Turkey enjoys 0% duty, cheaper transportation fee for truck and buy in GBP advantage. Margin is 53.62% for this product. (Refer to Appendix 3 for detailed costing sheet)

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5.Corporate Social Responsibility (CSR)5.1 CSR Comparison

Missguided ASOS H&MTransparency Pledge Factory Name Parent Company Product TypeWorker Numbers

✓✓✓✓✓

✓✓

alignment in 2020✓✓

✓✓✓✓✓

Factory List Fully Listed Tier 1 Fully Listed Tier 1,2,3Partially Listed Tier 4,5

Fully Listed Tier 1Partially List Tier 2

OAR (Open Apparel Registry) x x ✓ETI (Ethical Trade Initiative) ✓ ✓ ✓SAC (Sustainable Apparel Coalition) x ✓ ✓PST (Partnership for Sustainable Textile) x x ✓BRC (British Retail Consortium) ✓ ✓ xGLAA (Gangmasters & Labour Abuse Authority) ✓ ✓ xSedex x x xSGS ✓ x ✓Future Fashion Factory ✓ x xSustainable Clothing Action Plan (SCAP) x ✓ xBCI (Better Cotton Initiative) x ✓ ✓Use Recycled Material x ✓ ✓Clothing take-back or recycling scheme ✓ ✓ ✓Reuse or recycles unsold stock ✓ ✓ ✓Action, Collaboration, Transformation (ACT) x ✓ ✓Fashion Revolution’s Fashion Transparency Index 2020 n/a 54.8% 72.8%Good on you (Rating) We avoid (1/5)

Planet (1/5) People (1/5)Animal (3/5)

Not good enough (2/5) Planet (2/5) People (2/5)Animal (4/5)

It’s a start (3/5) Planet (3/5) People (3/5)Animal (3/5)

Gender EqualityHourly wage pay gap (women vs men) Proportion of women in highest pay quarterProportion of women in lowest pay quarter Bonus pay gap (women vs men)

(gov.uk, 2019)46% lower

50.6%85.2%

27% lower

(gov.uk, 2020)26.6% lower

44.5%67.8%

91.4% lower

(gov.uk, 2020)1.8% lower

74.6%82.5%

19% lowerTable.5 Chan, CSR Comparison, 2021

Missguided has developed CSR team with several improvement since 2017 when Channel 4 dispatches the issue with Leicester workers. However, more development has to be done. Table.5 demonstrates Missguided is not sustainable enough comparing with ASOS and H&M. Both of which both have listed policies, goals and achievements, comparing with UNSDG within the company report. (Fig.12 and Fig.13) Whereas Missguided is merely mentioning UNSDG under member of BRC section claiming goals are met. (ASOS, 2021, H&M, 2021 and Missguided, 2021) Beddall (2021) points out lack of company targets and objectives, mainly focus on compliance and reactive rather than proactive are the issues for slow development CSR. Hence, it is vital for Missguided to state clear goals and commitments.

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Fig.12 H&M, 2019 Highlights, 2019

Fig.13 ASOS, UN SDG principles addressed within ASOS, 2020

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The triple bottom line (TBL) suggest by Elkington (1994) is a business strategy that measures not only economic value, but also environmental and social values, focusing on people, planet and profits. Sardana (2017) further explain businesses have to integrate sustainability into their business strategy to survive in the future. While Missguided is already profitable, focus on people and planet need more efforts. Elkington (1994) suggests partnerships between companies and organizations will drive sustainability revolutions. For example, Missguided should collaborate with DPD which provide green delivery service to lower carbon emission. (Whelan, 2020)

Textile 2030 which aim to accelerate the whole fashion and textile industry towards circularity and system change in the UK, is initiated by the government and wrap.org.uk. The agreement is based on the success of SCAP 2020, which Missguided did not join. This is a good opportunity for Missguided to join the voluntary agreement to gain knowledge and engage with expertise for collaborative changes on carbon, water and circular textile targets. Government support and direction is needed to help with setting-up circular- based supply chains. The UK government is also involved in this programme to discuss national policy on Extended Producer Responsibility and other regulations. The government has proposed to setup minimum standards for textile products and requirements on textile product labelling to state product longevity, ability to be repaired, recyclability, and the environmental effects of its output. This provides transparency to the customers and leads customers to better buying behaviour. This may also lead to new business opportunity as repairing is recommended. (Fish and Wadham, 2021 and Wrap, 2021)

5.2 Care LabelGreenEarth label is added to the care label to provide home laundry tips. (See Section2.2, Fig.6) However, as GreenEarth is about dry cleaning, this may cause misunderstanding when the garment is not suitable for dry cleaning. Hence, this report will recommend Missguided to collaborate with

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clevercare.info (Fig.14) to use their label for home laundry and fabric care tips. Only garments available for dry cleaning add GreenEarth label.

5.3 Packaging

Fig.14 clevercare, clevercare label, 2020

ASOS has a leading achievement in packaging policy. They have reduced the amount of plastic used in each bag by reducing the thickness of the bag, saving around 583 tonnes of plastic per year since 2017. In 2020, the amount of recycled content in their bags increased to 90%. They aimed to eliminate 50% of packaging by 2025, but they already achieved reducing almost 40%. Therefore the goal has adjusted to a higher target to reach further. (ASOS, 2020)

Fig.15 ASOS Packaging Goals, 2020

While H&M has similar achievement, clear goals (Fig.16) were listed in their packaging policy to show authenticity in achieving a true circular model. Whereas Missguided is merely describing what has been achieved.

Fig.16 H&M Packaging Goals, 2020

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Missguided should further develop and invest in Mainetti (UK) Ltd. to achieve a higher percentage of recycle content in polybags and list their achievement data and future goals on the CSR page to show authenticity.

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6.1 Material

6.Recommendation

Fig.17 CO, What Are Our Clothes Made From?, 2018

Currently, the product is made of polyester, the most widely used synthetic fibre obtained from oil. It has surpassed the use of cotton in 2002 and accounts for more than 65% of fibres used in the textile industry. Polyester has been in high demand for a long time. In 2015, the production of polyester and other synthetic fabric used more than 330 millions barrels of oil, which account for more than 21,000 Olympic swimming pools. (CO, 2018)

Polyester was revolutionary when it first appeared in the 1970s. It is light, durable, dyeable, easy-to-wash and wrinkle-free, can be woven or knitted and can blend with other fibres easily. Fast fashion's growth has been driven by low-cost easy-to-care fabric. The fabric is made through the chemical reaction of coal, petroleum (oil), air and water. The production of polyester requires less water usage and produce less wastewater compare to natural fibres, but the energy required and greenhouse gases emitted during the production process is much higher than cotton. A wastewater treatment system is needed to prevent dangerous substance dioxide into the environment. Fibres will shed and enter waterways and oceans as microplastic fibres during the wash. Over a third of microplastics released into the world’s ocean are from synthetic textiles and polyester sheds six times more than nylon. These microplastics are affecting the food chains as marine life ingested them. Furthermore, polyester is not biodegradable. When a garment is thrown-away, it will stay in the landfill for hundreds of years. (CO, 2018 and Lissaman, 2019)

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Fig.18 Avsar, How Recycled Materials are Repurposed?, 2020

Sourcing sustainable polyesters (recycled and bio-based) are the new market opportunities as there is growing consumer concern about climate change and pollution. Recycled polyester (Fig.18) which made from other waste plastic or textile waste is a sustainable alternative to polyester. The idea of melting down bottles and spinning them into textiles is an innovative concept that contributes to the circular fashion model. It reduces plastic wastes and diverts wastes from landfills. Production is less polluting with a smaller carbon footprint of 54% less CO2 emissions and 70% less energy required. However, this process degrades the fibres’ quality to shorter and weaker fibres. Hence, they can only be recycled once. Furthermore, the base colour of the plastic bottles can make dyeing difficult and cost of production will increase. (Chua, 2020, CO, 2020 and sustainyourstyle.org, 2020)

‘It is important to look for a fully circular fibre alternative and reduce the amount of polyester in the collection rather than relying on recycled polyester to greenwashing.’ (Chus, 2020) Sustainyourstyle.org (2020) reports chemically recycled polyester, which breaks down the plastic molecules and reforming them into yarn, allows polyester to maintain the quality and be recycled infinitely. However, it is expensive and market share is scarce. Further investment needs to be made for this technique to be accessible economically. It is also important to note recycle polyester is still non- biodegradable and takes years to decompose after being discarded.

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6.2 Zero Waste Pattern Cutting (ZWPC)The fashion industry is generating wastes from the production stage since fabric usage is only up to 85% in current practices. 15% to 25% of the fabric remain unused and are thrown away to landfills resulting in significant environmental footprints, including waste of fibres and yarns, dyes and chemicals, time, labour and money invested. Traditional pattern cutting process cannot utilise the full length and width of a fabric spread because each pattern pieces are in irregular shapes. ZWPC is a design philosophy that aims to use the whole area of the fabric. Applying the concept of ZWPC into mass production of garments will eliminate about 60 billion square meters of scarp fabrics produced annually. Result in a much leaner and cleaner production strategy. (Ramkalaon and Sayem, 2020 and ASBCI, 2020)

Ramkalaon and Sayem (2020) study five different design practices including McQuillan’s (2011) tessellation (repeat and fit regular shapes with no gaps), jigsaw (fit traditional pattern pieces next to each other like a jigsaw puzzle), embedded jigsaw (share the same cut line with no fabric waste) and multiple cloth approach (make use of the shapes of leftover fabric pieces) and Carrico and Kim’s (2014) minimal cut (design practice to limited cuts on fabric). They applied and tested these design practices on two styles of garments in multiple sizes. Digital pattern cutting and marker making techniques were used to design and cut pattern pieces. 98% of fabric utilisation was achieved for both styles (Fig.18 and Fig.19). Proving ZWPC is achievable for high street brands’ mass production.

Fig.19 shows the strategy to execute ZWPC for multiple sizes of garments. The results (Fig.20 and Fig.21) show that the strategy developed by Ramkalaon and Sayem (2020) is effective. Their study establishes two key strategies for ZWPC to be adopted by mass production: ‘multiple size approach’ and ‘inverse negative space approach’.

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Fig.19 Ramkalaon and Sayem, Strategic Framework for implementing ZWPC, 2020

Fig.20 Ramkalaon and Sayem, Lay plan of sweatpants with 98.35% fabric utilisation, 2020

Fig.21 Ramkalaon and Sayem, Lay plan of hooded t-shirts with 98.51% fabric utilisation, 2020

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Fig.22 Ramkalaon and Sayem, ZWPC Paradigm, 2020

‘Multiple size approach’ is developed from multiple cloth approach. Fabric is cut for three different sizes of the same style. It is expected to work for any other sizes combinations that are multiple of three. ‘Inverse negative space approach’ is utilising the unused spaces in traditional pattern cutting for different small components. Negative space from large size patterns was found to be useful for making small components for small size garment and vice versa. It is also useful for making brand labels and binding to save costs on extra trims and labels. Fig.22 remarks all the factors to address when applying ZWPC for mass production. All the factors should be taken into account simultaneously and synchronously in order to achieve success in ZWPC. Therefore, the collaboration between pattern cutters and designers (Fig.23b) are vital to achieving the desired ZWPC prototypes that are not too different from traditional garments. Making process also has an important role in ZW as the 2-4 mm trim-off by overlocking contributed to wastes. 5mm seam allowance with no trim-off is needed to produce a truly ZW product, but this requires highly skilled garment workers to operate. (Ramkalaon and Sayem, 2020)

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Fig.23 Ramkalaon and Sayem, Conventional vs proposed apparel design process, 2020

Ramkalaon and Sayem (2020) point out the limitations of their proposed process (Fig.23b) compare to the current process (Fig.23a) are lack of cooperation between designers and pattern makers, extra digital pattern cutting skills are required, and the ability to deliver mainstream designs. Sahwini Deshpande, a Fashion Design and Development student at London College of Fashion, investigated ZWPC and won the Mayor of London’s Entrepreneur Awards in 2020 for her business, Art-Z. She found one simple solution to overcome the complex, manual and time-consuming ZWPC, is using technology. Art-Z is a creative solution to reduce fabric wastage. It is a software that uses artificial intelligence (AI) to minimise waste in pattern cutting. Designers will be able to create garments and then consult their zero-waste expert, Art-Z, with a single click to reduce waste. (ASBCI, 2020)

In order to achieve ZWPC, Missguided needs to recruit people with such skills and willing to invest in digital software. Investment in ZWPC can help to reduce the cost of switching to recycled polyester in precious section.

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6.3 Augmented Reality (AR) Virtual Try-OnLu and Smith (2008) point out e-commerce and online shopping are still unable to overtake onsite shopping, especially for the fashion industry, because physical stores provide direct interaction with the product, allowing consumers to engage and experience the texture, appearance or quality of a product before purchasing. While e-commerce often fails to offer such details about a product for customers to make an informed decision prior to checkout. Cadoux (2020) further report that online returns have been an issue of online shopping as customers lack understandings of size and fit. According to Ng (2021), a Chinese e-commerce seller, around 40% of the products will need to return or exchange. The lack of interaction of traditional e-commerce has to be overcome for consumers to make the right purchase decision. Many scholars suggest AR as the solution for enhancing e-commerce systems.

AR is an emerging Human-Computer Interaction technology, which aims to merge computer-generated 2D or 3D virtual objects with real-world scenes. There are two different AR applications: optical see-through AR and video see- through AR. Optical see-through uses a semi-transparent screen to project virtual objects into the users’ environment while video see-through AR uses cameras to capture the live scene process and add the virtual object into the video. Video see-through is more common as devices needed are more common. In other words, customers can ‘try’ a product by bringing the virtual product into the physical environment. Such experiences are engaging and interactive, enhancing human perception of reality to help consumers make better purchase decisions. Resulting in reduced return rates by 36%. It is also used for brand building and marketing campaigns, such as virtual fashion show, digitised 3D prototypes on avatars, and digitally redecorate users camera. Designers can showcase and test out ideas before producing the physical product, boost sales for the right product. AR virtual try-on will greatly minimise carbon emissions by reducing travel to stores, lowering the return rate, producing the right products that are in demand. It is a profitable way to

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increase the effectiveness of e-commerce. Studies also show a high level of interest and preference for using AR virtual try-on. (Lu and Smith, 2008; Kannaiah and Shanthi, 2015; Bhageria, 2020; Hackl, 2020; Morgan, 2020;Rosanensi, 2020)

Although AR e-commerce system is proved to have positive impacts on aiding customers to make better purchasing decisions, there were limitations when using AR due to technical issues. Cadoux (2020) discern there are still technical problems for cameras to accurately distinguish different body shapes, size and poses to apply lifelike clothes. However, Google, Snapchat and Facebook already have significant progress in recognising several body parts. Kapfunde (2019) reports Gap Inc. already collaborated with Google. Customers can customise an avatar based on their own body and see how different pieces of clothes fit on them from various angles using their app’s Dressing Room. (Fig.24)

Fig.24 Kapfunde, Dressing Room by Gap Inc., 2019

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Several brands have already adopted AR features in their app, it is important for Missguided to develop and invest in this emerging market. Makeup, glasses and hats available for AR virtual try-on are successful examples. Both Bhageria (2020) and Rosanensi (2020) suggest retailers to collaborate with social media companies such as Facebook and Instagram to enhance technological progress. Or collaborate with AR specialised company such as Demodern (2021) which provide advance optimisation for mobile devices. Since Missguided is famous for the Tinder-like app feature and styles are greatly influenced by social media, it is relevant for Missguided to further develop their app with social media features.

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7.ConclusionOverall, this report has discussed the sourcing process of a lace insert midi dress for Missguided AW21/22 and has critically analysed the CSR policy of Missguided. Recommendations to improve Missguided sourcing strategies regarding sustainability and efficiency were also given. While cost, leadtime and quality are important for a fast-fashion company like Missguided, Turkey is an important sourcing country to meet these requirements. Sustainability which is a key aspect in the fashion industry currently should be prioritised to improve TBL. Missguided must list clear goals and commitments within their CSR policy. Greenwashing must be avoided and collaboration between different companies is key to develop sustainability. This report has recommended Missguided to invest in recycled-polyester, zero waste pattern cutting and AR virtual try-on to improve sustainability practices. Although the cost of production may increase at the beginning while investing, the resources saved through these circular business model will be reflected in long term.

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8.Figure ListFig.1: Sabanoglu, T. (2020) Gross profit of Missguided Limited worldwide 2013-2018. [Online Image] Available at: <https://www.statista.com/statistics/883851/gross-profit-worldwide- missguided-limited/> [Accessed 18 March 2021]Fig.2: Sabanoglu, T. (2020) Operating loss/profit of Missguided Limited worldwide 2013-2019. [Online Image] Available at: <https://www.statista.com/statistics/883857/operating-loss- profit-missguided-limited/> [Accessed 18 March 2021]Fig.3: Chan, T. (2020) Customer Profile [Original Image] Fig.4: Chan, T. (2020) Market Position Matrix [Original Image]Fig.5: Chan, T. (2020) Product Specification of Lace Insert Midi Dress [Original Image] Fig.6: Chan, T. (2020) Care Label of Black Lace Insert Dress [Original Image]Fig.7: B, E. (2019) Packaging of Missguided Dress. [Online Image] Available at:<https://www.shpock.com/en-gb/i/XKEIG7NGFVOPP7G9/mustard-midi-dress-missguided- size8-10> [Accessed 18 March 2021]Fig.8 Hines, T. (2000), The Iceberg Theory of Cost Comparison [Illustration] in: JACKSON, T & SHAW, D. (2001) Mastering fashion buying and merchandising management, London, Macmillan.Fig.9: Incoterms. (2020) Free Carrier (FCA). [Online Image] Available at:<https://www.incotermsexplained.com/the-incoterms-rules/the-eleven-rules-in-brief/free- carrier/> [Accessed 18 March 2021]Fig.10: CLO. (2020) 3D Virtual Sampling. [Online Image] Available at:<https://www.clo3d.com/> [Accessed 18 March 2021]. Fig.11: Chan, T. (2020) Costing Elements. [Original Image]Fig.12 H&M. (2020) 2019 Highlights. [Online Image] Available at:<https://sustainabilityreport.hmgroup.com/wp- content/uploads/2020/10/Sustainability_Peformance_Report_2019.pdf> [Accessed 18 March 2021].Fig.13 ASOS. (2020) UN SDG principles addressed within ASOS. [Online Image] Available at:<https://www.asosplc.com/corporate-responsibility/fashion-with-integrity/un-global- compact> [Accessed 18 March 2021].Fig.14: clevercare. (2020) clevercare label. [Online Image] Available at:<https://www.clevercare.info/en> [Accessed 18 March 2021]Fig.15: ASOS. (2020) ASOS Packaging Goals. [Online Image] Available at:<https://www.asosplc.com/corporate-responsibility/our-business/packaging-and-waste> [Accessed 18 March 2021].Fig.16: H&M. (2020) H&M Packaging Goals. [Online Image] Available at:<https://sustainabilityreport.hmgroup.com/wp- content/uploads/2020/10/Sustainability_Peformance_Report_2019.pdf> [Accessed 18 March 2021].Fig.17: CO. (2018) What Are Our Clothes Made From? [Online Image] Available at:<https://www.commonobjective.co/article/fibre-briefing-polyester> [Accessed 18 March 2021].Fig.18: Avsar, B. (2020) How Recycled Materials are Repurposed? [Online Image] Available at: <https://www.linkedin.co/feed/update/urn:li:activity:6732222641140203520> [Accessed 18 March 2021].Fig.19: Ramkalaon, S. and Sayem, A. (2020) Strategic Framework for implementing ZWPC. [Online Image] Available at: <https://www-tandfonline-

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com.proxy.library.dmu.ac.uk/doi/full/10.1080/00405000.2020.1779636?scroll=top&needAcces s=true> [Accessed 18 March 2021].Fig.20: Ramkalaon, S. and Sayem, A. (2020) Lay plan of sweatpants with 98.35% fabric utilisation. [Online Image] Available at: <https://www-tandfonline- com.proxy.library.dmu.ac.uk/doi/full/10.1080/00405000.2020.1779636?scroll=top&needAcces s=true> [Accessed 18 March 2021].Fig.21: Ramkalaon, S. and Sayem, A. (2020) Lay plan of hooded t-shirts with 98.51% fabric utilisation. [Online Image] Available at: <https://www-tandfonline- com.proxy.library.dmu.ac.uk/doi/full/10.1080/00405000.2020.1779636?scroll=top&needAcces s=true> [Accessed 18 March 2021].Fig.22: Ramkalaon, S. and Sayem, A. (2020) ZWPC Paradigm. [Online Image] Available at:<https://www-tandfonline- com.proxy.library.dmu.ac.uk/doi/full/10.1080/00405000.2020.1779636?scroll=top&needAcces s=true> [Accessed 18 March 2021].Fig.23: Ramkalaon, S. and Sayem, A. (2020) Conventional vs proposed apparel design process. [Online Image] Available at: <https://www-tandfonline- com.proxy.library.dmu.ac.uk/doi/full/10.1080/00405000.2020.1779636?scroll=top&needAcces s=true> [Accessed 18 March 2021].Fig.24: Kapfunde, M. (2019) Dressing Room by Gap Inc. [Online Image] Available at:<https://fashnerd.com/2019/02/augmented-reality-transforming-fashion-industry/> [Accessed 18 March 2021]

9.Table ListTable.1: Chan, T. (2020) Size Breakdown [Original Table] Table.2: Chan, T. (2020) Care Label Content [Original Table]Table.3: Chan, T. (2020) Sourcing Destination Suitability [Original Table] Table.4: Chan, T. (2020) Critical Path Template [Original Table] Table.5: Chan, T. (2021) CSR Comparison [Original Table]

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NAZIR, S. (2020) Boohoo accused of slavery practices in Leicester factory. Retail Gazette, [online] 05 Jul. Available at: <https://www.retailgazette.co.uk/blog/2020/07/boohoo- accused-of-slavery-practices-in-leicester-factory/> [Accessed 18 March 2021].O’CONNOR, S. (2018) Dark factories: labour exploitation in Britain’s garment industry | Free to read. Financial Times, [online] 17 May. Available at: <https://www.ft.com/content/e427327e- 5892-11e8-b8b2-d6ceb45fa9d0> [Accessed 18 March 2021].RAMKALAON, S. and SAYEM, A. (2020) Zero-Waste Pattern Cutting (ZWPC) to tackle over sixty billion square metres of fabric wastage during mass production of apparel. The Journal of The Textile Institute, [online] pp.1-11. Available at: <https://www-tandfonline- com.proxy.library.dmu.ac.uk/doi/full/10.1080/00405000.2020.1779636?scroll=top&needAcces s=true> [Accessed 18 March 2021].ROBSON, J. (2020) Live Seminar – In conversation with Jane Robson, from FBUY3000 Sourcing and Supply. De Montfort University, Blackboard on 15 Oct. Available at Blackboard [Accessed 18 March 2021].ROSANENSI, M. (2020) Improving E-Commerce Effectiveness Using AugmentedReality. MATRIK : Jurnal Manajemen, Teknik Informatika dan Rekayasa Komputer, 19(2), pp.214-222. Available at:<https://journal.universitasbumigora.ac.id/index.php/matrik/article/view/659/470> [Accessed 18 March 2021].SARDANA, A., (2017) Collaboration is key to sustainability - by Ajay Sardana. [online] Fibre2fashion.com. Available at: <https://www.fibre2fashion.com/industry- article/7998/collaboration-is-key-to-sustainability> [Accessed 18 March 2021].SUSTAINYOURSTYLE.ORG. (2020) Recycled Polyester — SustainYourStyle. [online] SustainYourStyle. Available at: <https://www.sustainyourstyle.org/en/recycled-polyester2> [Accessed 18 March 2021].THE STITCH TIMES. (2011) China Garment Sourcing,Garment Exports China,Sourcing Clothes from China,Clothing Sourcing China. [online] Fibre2fashion. Available at:<https://www.fibre2fashion.com/industry-article/5528/the-changing-face-of-garment- sourcing> [Accessed 18 March 2021].UYSAL, K. and VENES, N. (2021) Syrian refugees working in Turkey’s garment sector | Ethical Trading Initiative. [online] Ethicaltrade.org. Available at:<https://www.ethicaltrade.org/programmes/syrian-refugees-working-turkeys-garment- sector> [Accessed 18 March 2021].WHELAN, G. (2020) DPD rolls out green delivery service across UK. Drapers. [online] 05 Oct. Available at: <https://www.drapersonline.com/news/dpd-rolls-out-green-delivery-service- across-uk> [Accessed 18 March 2021].WOOD, Z. (2016) Young, quick and very hip: Missguided and PrettyLittleThing hit the big time. [online] the Guardian. Available at:<https://www.theguardian.com/business/2016/dec/17/missguided-pretty-little-thing-hit-big- time-fast-fashion-generation-z> [Accessed 18 March 2021].WRAP. (2021) Textiles 2030 | WRAP. [online] Wrap.org.uk. Available at:<https://wrap.org.uk/taking-action/textiles/initiatives/textiles-2030> [Accessed 18 March 2021].

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11. AppendixAppendix 1 : Ginetex, Ginetex care symbol meaning, 2020 (Section 2.2)

Appendix 2 : SWOT analysis of 3 potential sourcing country (Section 3.1)China

Strengths China has been famous for export-orientated

factories since 1980s due to high efficiency and high quality of Chinese labour. Workers are trained to handle all types of products, casual and formal, including complex garments, pay attention to details, follow the specification and self-managed to have consistent quality. This has helped to save lots of time on quality check process and made China reliable for providing good quality products. (Brooks, 2015, Merrall, 2020 and Robson, 2020)

‘Sourcing from China now means that the products are likely to be made in a factory which may well be an America joint venture, with German equipment and a British production manager.’ (Jackson and Shaw, 2001, p117)

Intertextile fabric fair in Shanghai twice a year. Huge producer of fabric, world biggest fabric mills, vast array of fabrics, trims and accessories and specialist in lace production (but can be expensive)(Merrall, 2020)

Can source direct or through agent (Merrall, 2020)

Good level of English Communication from established factories, easier than other Asia country. (Merrall, 2020)

Established supply base, very reliable. reflected in increasing cost. (Merrall, 2020)

Diverse and breadth. (Robson, 2020)

Weaknesses Long leadtime. (4 weeks by ship; 15-24 weeks

for design and development) (Merrall, 2020 and Robson, 2020)

China has become less price competitive owing to the soaring costs in terms of labour, land, resources and energy. (The Stitch Times, 2011, Merrall, 2020 and Robson, 2020)

12% duty and 5% freight additional to the cost price. (Merrall, 2020)

USD exchange rate uncertain and fluctuate can have huge impact on cost. (Merrall, 2020)

Different time zone (8 hours ahead) can only communicate through emails. (Merrall, 2020)

There may be communication barrier in smaller companies. (Merrall, 2020)

13 hour flight time, not able to visit factory for QC checks; nor buying office for product development. (Merrall, 2020)

Ideas (direct design) must come from retailer. (Merrall, 2020)

No direct control for flexibility to amend, cancel or re-prioritise orders. (Merrall, 2020)

High minimum order quantities (3000 pieces), but negotiable if balanced out with other large quantities. (Merrall, 2020)

Rely on the factory management to invest in new machinery or new raw material sources but working against long established networks relationships. (Merrall, 2020)

Opportunities Threats

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Supportive of CSR initiatives by Chinese government (Domoney, 2007)

Code of conduct: CSC9000t (the China Social Compliance 9000 for the textile and apparel industry) was launched by the China National Textile and Apparel Council in 2005. Includes general principles, detailed regulations on labour conditions and a process for self-assessment. (Domoney, 2007)

Working with Clean Clothes Campaign on training, investigation and democracy. (Domoney, 2007)

Retailers working with factories to improve working conditions for the employee but takes time to implement and embed (Merrall, 2020)

Management and design center for the new manufacturing counties in Southeast Asia. (Jackson and Shaw, 2001)

Orders could be sub contracted without knowledge. (Merrall, 2020)

Cheating and falsification of records in auditing systems. (Domoney, 2007)

Workforce is mainly young women, as there is significant discrimination against women over35. (Domoney, 2007)

Long hours and poor working conditions. (Domoney, 2007)

Right to strike is removed from Chinese constitution in 1982 (Domoney, 2007)

Heatwaves in China can be too hot for workers and reduced output. (Merrall, 2020)

Trump has dispute with China hits out with steep tariffs on China imports, increasing cotton price and oil price (Merrall, 2020)

One month holiday (Chinese New Year) in February. (Merrall, 2020)

China shifting production focus to technological field. (Li, 2018)

Emerging cheap labour countries in Asia (The Stitch Times, 2011)

TurkeyStrengths

Duty-free (Merrall, 2020 and Robson, 2020) No currency variation. (Buy in GBP) (Merrall,

2020) Clear and timely communication. (Only 2 hours

ahead) (Merrall, 2020) Able to visit mills to select fabric and negotiate;

visit factories to explore new sources and techniques, visit sample room for design inspirations. (Only 4 hours flight) (Merrall, 2020 and Robson, 2020)

Short and flexible leadtime. (8 days by truck, 3 days by fast truck; 4-10 weeks for design and development) (Bearne, 2017, Merrall, 2020 and Robson, 2020)

Speed to market. (Quick Responds) (Merrall, 2020)

Accept small order quantity and repeat for quick turnaround. (Bearne, 2017 and Merrall, 2020)

Skilled labour specialised in multi-product in high quality. (Bearne, 2017 and Merrall, 2020)

Huge breadth of fabric. Well-developed supply chain and compete with European supply base (Bearne, 2017, Merrall, 2020 and Robson, 2020)

Reliable factories, vertical integration, strongheritage in textiles – remain a top 10 producer of polyester. (Bearne, 2017)

Weaknesses Higher fabric cost than Far East. (Bearne,

2017 and Merrall, 2020) Higher labour cost than Far East -

minimum wage for a single person will be 2,826 Turkish liras a month. (£1.61/h)(Bearne, 2017, Girgin and Sahun, 2020 and Merrall, 2020)

Labour cost account for 30% of total cost. (ISPO.com, 2018)

38

Opportunities UK-Turkey Trade Agreement signed before

Brexit deal is decided. (GOV.UK, 2020) Turkey government targeted to expand the

manufacturing industry. (ISPO.com, 2018) Turkey start lifting Covid curbs in March.

(Guven, 2021) Ideal for fast fashion and capsule collections as

it is flexibility to repeat orders, make changes, or trial new trends and products. (Bearne, 2017)

Established supply chain allowing production produced in one country in a smooth and easy sourcing journey. (Bearne, 2017)

Turkey takes constructive approach to supply chain sustainability issues to comply with EU standards, record on CSR is improving. Able to visit and audit frequently (Bearne, 2017)

‘ETI member brands have significantly improved their policies and practices.’ ‘law and decentwork’ agenda for Syrian refugees. (Uysak and Venes, 2021)

Threats Weak labour legislations resulting modern

slavery of Syrian refugees and child labour in some poor working condition fast fashion factories. (Barrie, 2019; Houerbi, 2019, Bennett, 2020)

Legal minimum wage not enough for household expenses (CleanClothes.org, 2013)

Lack adequate auditing, some companies continue to use a number of environmentally harmful processes. (Behind the Scenes, 2017)

Serious water pollution in Turkish textile industry caused by the discharge of effluents. Textile industry responsible for 15% of the water consumption. (Behind the Scenes, 2017)

UKStrengths

Save cost on duty, freight and exchange rate. (Merrall, 2020 and Robson, 2020)

Short lead time in transportation and communication. (Jackson and Shaw, 2001, Merrall, 2020 and Robson, 2020)

No language barrier. (Merrall, 2020) Flexibility for quick responses to trends,

catwalk, social media, customer feedback or weather. (Jackson and Shaw, 2001, Merrall, 2020 and Robson, 2020)

Hidden advantage of hold back open to buy budget to react to sales. Late decision making and short product lifecycle for high volatility and low predictability demands. (Jackson and Shaw, 2001and Robson, 2020)

Speed commitment and mutual understanding as new UK retailers / supplier relationships. (Jackson and Shaw, 2001, p117)

Find suppliers on your doorstep and able to monitor and audit suppliers. (Merrall, 2020)

Marketing tool to add value to products. (Merrall, 2020)

Weaknesses Expensive cost in labour and material.

(Jackson and Shaw, 2001, Merrall, 2020 and Robson, 2020)

Minimum wage of 23 and over is £8.72 (GOV.UK, 2020)

Limited skilled workforce and lack new workforce. (Merrall, 2020)

Lack quality. (Merrall, 2020) Scale and volume is small. (Merrall, 2020) Not as much of a manufacturing ‘story’.

(Merrall, 2020) Bad publicity. (Merrall, 2020) Lack of transparency and have

outsourcing risk. (Ahmad, 2017 and Merrall, 2020)

Opportunities ‘New economic forces have started to

blow on the embers of Leicester clothing industry.’ (Connor, 2018)

ETI member retailers uses new audit system. (ETI, 2018)

Threats Modern slavery garment workers in

Leicester paid £3-3.5/hour. (Ahmad, 2017, O’Connor, 2018, Duncan, 2020, Nazir, 2020,)

Audit and subcontracted without knowledge(Ahmad, 2017)

39

Government initiated voluntary agreement - Textile 2030 to improve UK supply chain. (Fish and Wadham, 2021 and Wrap, 2021)

Fire risk working condition – flammable materials filled factories, hot machinery vulnerable to fire. (Ahmad, 2017 and O’Connor, 2018)

Textile firms in Leicester breaches health and safety at work since lockdown concerning Covid-19 control workers are forced to come into work while sick with Covid-19 (Busby, 2020 and Duncan, 2020)

Government fails to enforced laws (Fish andWadham, 2021)

Appendix 3 : Costing sheet (Section 4)

40

Assignment Title – Sustainable Global Sourcing Report for MissguidedMarking Criteria Assessment

component weighting

100-90%Grade A*

89-80%Grade A+

79-70%Grade A

69-60%Grade B

59-50%Grade C

49-40%Grade D

39-30%Grade F

29-0%Grade F

Research 25% x

Discussion of Sourcing Procedures 30% x

CSR and Recommendations

35% x

Structure 10% x

Overall - 78

Self-Assessment Form

Student Name: Tong I Chan (Tracy) Module: FBUY3000 Sourcing and Supply Tutors: Siobhan Merrall / Lianne Lewin / Rachel Higginbottom