Modeling the Supply Chain Sustainability Imperatives in the Fashion Retail Industry: Implications for Sustainable Development

Abstract

The resilience of established business strategies has been tested in the wake of recent global supply chain upheavals triggered by events like the COVID-19 pandemic, Russia-Ukraine armed conflict, Hamas-Israel war, and other geopolitical conflicts. Organizations are compelled to integrate sustainable practices into their supply chains to navigate the complexities of the post-COVID-19 era and mitigate the far-reaching consequences of such disruptions. However, exploring supply chain imperatives from sustainability dimensions still remains underexplored, presenting a significant research gap, particularly in the fashion retail sector. In response, this study aims to pioneer an innovative approach by amalgamating Pareto analysis, Bayes theorem, and the Best-Worst Method to evaluate sustainability imperatives comprehensively. Focusing on emerging economies like Bangladesh and its fashion retail industry, this methodology synthesizes insights from literature reviews, expert feedback, and Pareto analysis to curate a definitive set of influential imperatives. Finally, the Bayesian Best-Worst Method is applied to examine them. The results reveal the availability of government support schemes to promote sustainability, developing strategic supply chain interventions to ameliorate the impact of disruptive events, and digitalizing the supply chain as the most monumental imperatives under economic, social, and environmental perspectives, respectively. The study's innovative methodology and its implications for sustainable supply chain management offer valuable insights for both academic research and practical application, presenting a strategic blueprint for the fashion retail industry to navigate and thrive in the post-COVID-19 era.

1. Introduction

Global supply chains (SC) have encountered several phases of chronic disruptions, starting from the COVID-19 pandemic to the recent Russia-Ukraine war and war in Middle-eastern Asia, resulting in intermittence or halt in the production process and interrupted raw material supply [1, 2]. Wars have always brought adverse effects on the SC, fueled by production disruption, transportation outages, and supply disruptions [3]. Major fashion brands, e.g., Zara, Nike, and H&M, withdrew their operation from Russia in March 2022, which caused worry to fashion clothing manufacturers in Asia, including Bangladesh and Vietnam, where Asian nations will lose close to $1–2 billion or more in export profits [4]. The rising costs of crude oil and fuel have caused detrimental effects on the fashion SC as labor costs have increased due to inflationary pressures. The Russia-Ukraine war and the precedent of COVID-19 are leading to a global slowdown in the fashion industry [5]. The emergent energy crisis disrupted the fashion or clothing SC as 58% of executives think that the fashion market will weaken due to re-routing of trade, delay in delivery to European markets, use of sea instead of water, increase in freight expenses caused by sanctions on using seaports, and overall rising of cotton and cashmere prices by 30% to 45% [6].

From Bangladesh's perspective, the war is feared to reduce the export-import business with Russia. In the fiscal year 2020–2021, Bangladesh exported goods worth USD 665.3 million to Russia, of which clothes were the most [7]. The disruption in the SC is expected to impact the Bangladeshi manufacturers due to the collapse in the SC resulting from heightened oil, gasoline, and ship fare costs. Because of the global value chain's interconnected nature, disruption in one country has far-reaching effects on the overall international SC. More than 190,000 US and 109,000 European companies have tier-three Russian or Ukrainian suppliers [8]. Due to the sanctions, there have been widespread adverse effects on the SC operations of these suppliers. For example, the supply chains of electronics retailers have seen prices rise due to the reduced availability of rare earth metals from Russia and Ukraine. Supply chains of car retailers have also been impacted due to a reduction in the availability of palladium, which is used to produce vehicles' catalytic converters [9]. The soaring cost and reduced energy availability have mostly affected energy-based supply chains [10]. These non-munificent, i.e., unfavorable environmental contingencies, require an enhanced emphasis by academicians and SC policymakers to ensure sustainability in the face of rampant SC disruptions [10]. In this respect, maintaining sustainability by accommodating a triple bottom line, e.g., social, economic, and environmental sustainability, can help firms maintain resilience and long-term viability [11]. Though several studies have been formulated in recent years considering the emergence of COVID-19, the imperatives leading to sustainability in the fashion retail SC have received very little attention. Primarily due to the new global paradigm shift resulting from the Russia-Ukraine war and recent SC adversities, it is time to focus on the imperatives contributing to sustainability, especially in the fashion retail industry.

2. Literature Review

2.1 Recent Studies on Supply Chain Disruptions and Sustainable Supply Chain

SC disruptions can be described as risks and undesirable phenomena that emerge from natural or man-made disasters such as weather turbulence, economic crisis, and the recent COVID-19 pandemic, or global wars such as the Russia-Ukraine conflict, Hamas-Israel war that affects supply chain performance [30, 31]. SC interruptions intervene in the flow of manufacturing and distribution of goods or generate complexity in the firm performance [2, 23]. Some of the expected outcomes of disruptions encompass the price spiral, reduction in global trade, value creation, and delivery of an organization [32, 33]. Recent SC disruptions, such as the Russia-Ukraine war and the COVID-19 pandemic, have exposed the vulnerability and ripple effects in the SC [34, 35]. Due to wreckage caused by the Russian war and COVID-19, there have also been chronic impacts on international trade.

The outbreak of war and pandemic has worsened the management of logistics providers and even complicated the process of upholding their contractual obligations to customers. Organizations came under intense pressure from COVID-19 and ensuing disruptions to deliver core and non-core services [36]. Most industries were significantly impacted by the COVID-19 pandemic [37, 38]. For instance, the World Trade Organization (WTO) predicted the COVID-19 pandemic might cause a 13–32% decline in global trade in 2020 [25]. The coronavirus had a significant economic impact in addition to direct and indirect value-added damages. For instance, China's industries were considered exceptional in terms of SC segments. Still, when COVID-19 outbreaks occurred, it impacted most of these businesses' SC networks [39]. Moreover, Due to globalization, SC disruptions have affected both large and small and medium-sized enterprises (SMEs) in developed and developing economies.

2.2 Imperatives of Sustainable Supply Chain in the Context of Recent Disruptions

Increased awareness of sustainability dimensions is necessary to navigate SC disruptions, such as wars and pandemics, by addressing social and environmental concerns towards creating final products or services [44]. The organization's internal and external variables may influence how sustainable SC management is implemented. These elements can significantly affect the adoption of SSC and improve performance and reactivity [45]. The Famental aspects of sustainability from the social, economic, and environmental viewpoints enhance organizational performance. Additionally, it guarantees risk management and economic success [46]. Investigating the elements of sustainability is necessary, mainly when dealing with war and pandemic-like effects on supply chains. These elements support businesses in enhancing sustainability initiatives and increasing sustainability's overall efficacy.

3. Method

3.1 Survey Design

The study employs a structured, innovative five-phase methodology, meticulously designed to address SSC imperatives in the fashion retail industry of emerging economies, particularly against the backdrop of global disruptions. This approach begins with an exhaustive literature review, which is crucial for establishing a comprehensive foundation by identifying SSC imperatives and integrating a broad array of scholarly insights. This step goes beyond traditional methods by ensuring a deep, contextual understanding of the SSC field, tailored to the unique needs of emerging markets. Distinctively, the methodology engages Bangladeshi fashion retail industry experts in its second phase, ensuring the findings are not only relevant but also infused with local expertise, a step often overlooked by generic approaches.

A combination of Pareto analysis and the Bayesian BWM was used in this study to efficiently prioritize and allocate resources across the identified supply chain sustainability imperatives. Pareto analysis was applied first to filter the imperatives, focusing on the top 20% that contribute to roughly 80% of the overall impact. This step simplified the decision-making process by removing less critical imperatives. After applying Pareto analysis, Bayesian BWM was used to assign precise weightings to the remaining imperatives, providing a detailed ranking based on expert input. Therefore, in short, these two methods were used in this order to ensure the accuracy and practicality of the prioritization process of the imperatives and their subsequent assessment. Due to the high efficiency of this methodological approach, a similar approach was adopted in several previous multiple-criteria decision-making (MCDM)-based studies [2, 59].

4. Results

4.1 Prioritization of SCS Imperatives using Pareto Analysis

Twelve of the eighteen imperatives were considered for further analysis depending on the cumulative percentage score, which collectively encompasses 80% of the overall score. Twelve most significant imper