Sustainable Procurement

Introduction

The sustainable practices are facilitated, monitored and controlled by the brands with the purpose of ensuring the overall growth and development of the same while operating as per the changing needs and priorities in the markets. In most situations it was observed that businesses fail to facilitate the sustainable practices as per the societal needs or concerns as it might increase their costs of operations. Armitage, Roberts and Sekhon (2017) opined stated that sustainable procurement and sourcing activities dynamically supports the businesses in ensuring the continuity of growth and operations while ensuring the fulfillment of the societal and environmental responsibilities. In this connection, the discussion would be identifying the procurement and sustainable supply chain activities of the fashion retailer brand Gucci while detailing on the different areas of operations of the business related to supply chains and sourcing of the fabrics. The purpose of the research would be to identify the challenges that are being faced by Gucci while suggesting different recommended activities that might be considered by the organization in order to facilitate their growth in the markets.

Sourcing

The fabric that is being used by the concerned organization Gucci is specifically Pima Cotton. The concerned organization sources its fabric from a non- profit organization named Supima, which consists of around 200 family farms in the Southwestern and Western United States. The group is specifically responsible for providing license to different textile mills, brands and retailers for utilizing their trade mark on the US grown Pima products (Armitage & Roberts, 2021). The utilization of quality fabric materials has been supportive towards the growth and development of the business while ensuring the strategic growth and development of the businesses (Cai & Choi, 2020).

The use of superior pima cotton as the primary fabric has supported the business in improving the quality of their offerings. It has been observed that the concerned organization holds a list of certifications that has significantly supported the business in maintaining congruency through guidance and regulation based assistance in developing their operations. It has been observed that Gucci holds certifications like SA8000, ISO 14001, ISO45001 certification, ISO20121 certification and the like which has not only supported the business in determining the quality of their propositions but also address the sustainable parameters for environmental and societal concerns (Shen et al., 2020).

The concerned organization has developed means of sustainable procurement in their supply chain operations. The sustainable supply chains of the organization are capable of providing the same with opportunities for removing the impacts on the societal and environmental aspects. It has been observed that the organization has developed policies towards addressing the wellbeing and healthcare based needs of the people engaged in the farming of pima cotton. The policies that are enforced by the organization acts towards reducing the work load among the people while addressing their health and wellbeing based needs.

On the other hand, the organization has taken the initiative of monitoring over the activities of Supima and controlling the nature of the activities so that the same might not have a huge impact on the environment. Placella (2020) stated that businesses act responsibly towards the suppliers while ensuring that the suppliers do not take to different unethical activities with the purpose of increasing their productivity. In this connection, Gucci has taken the initiative of developing protocols for the farming and labors with the purpose of addressing the societal and environmental sustenance related aspects. It has been observed through research that most of the fabric developers work in extreme conditions while supporting the increasing work pressure (Preuss., 2020). In this connection, the organization has taken the initiative of developing the supplier contract with Supima while making the same aware of the hours of work that the labors might undertake and the different environmental protection related agendas with the purpose of ensuring the sustainable procurement activities of the venture.

However, the increase in the cost of operations and the raw materials has been acting as a limiting force for Gucci while ensuring the environmental and societal responsibilities. The increased cost of raw materials has been affecting the business with lower margins and forcing the same to increase the price of their propositions. Feng, Tong and Zhu (2020) stated that the adherence to the environmental interests often increases the cost of raw materials for the businesses which significantly limits their scope of accruing better profit margins. On the other hand, the labor related provisions that are devised by the organization has significantly affected their cost of operations. The increased costs of operations and raw materials that are procured by the business has curtailed their capability of making huge profit margins and thereby acting as limiting factors towards the CSR activities of the firm (Mintel Store., 2019).

Manufacturing

The concerned organization, Gucci officially has established their production units in Italy where the organization acclaims that 100% of their production are undertaken. However, it has also been observed that the organization holds contacts with around 3000 sub contracted suppliers from where the organization sources their produces. Erhun, Kraft and Wijnsma (2020) stated that businesses take on outsourcing activities with the purpose of reducing their risks, costs and improve the quality or productivity through contracting with the experts. In this connection, there are speculations that Gucci sources their produce from Spain, France, China and Bangladesh as well along with that of Italy with the purpose of reducing their costs of operations and thereby make an increase in their produces.

The diverse areas of sourcing have enabled the business sin empowering the degree of their operations while addressing the strategic needs and requirements. In this connection, the nature of change in the organizational operations is specifically reliant on the efficient functioning of the systems while addressing the strategic needs and requirements. The organization has developed manufacturing units in 487 locations which has significantly contributed towards the growth and development of the business in the international markets (Marefat. 2019). General methods of transportation are used as per the availability. However, it has been observed that the organization is making a move towards empowering electronic vehicles for transporting the propositions from one place to another. The activity of the organization has significantly encouraged the growth and development of the same in the global markets (Zijm et al., 2019).

Gucci takes the initiative of developing efficient controlling and monitoring activities in order to ensure the ethical backgrounds while manufacturing the propositions. It has been observed from the corporate website that the organization has devised strict standards on the quality of the operations and output before making the offerings available to the customers. However, it has been observed that there are several sweatshops through which the organization sources their offerings (Mintel Store., 2021). As per the reports it has been witnessed that the extreme working conditions and the lower wages that are offered to the labors affected the capability of the organization in maintaining the ethical aspect of their manufacturing unit while addressing the higher demand of their customers. Chen, Chung and Guo (2018) stated that organizations operate ethically with the purpose of fulfilling their responsibilities certain ethical goals and s towards the society and the environment.

However, the profitability related needs of the businesses force the same to initiate operations on the basis of certain social and environmental obligations. In this connection, it has been witnessed that the organization has significantly failed to uphold their ethical aspects while empowering the degree of operations among the employees in order to maintain standards of their social and environmental responsibilities. The organization has taken the initiative of outsourcing their manufacturing operations to different suppliers which operates through sweatshops which has significantly affected the brand image and potentiality of the business to address the environmental and social causes. On the other hand, the organization’s need for sourcing lower priced proposition in order to maintain a standard margin has led the organization to operate in close collaboration with suppliers working through the sweatshops. The incapability of the business in restoring efficient communication with the suppliers might act as an extensive cause for limiting the efficiency of monitoring over the activities of the suppliers.

However, the organization’s own manufacturing units are bound by different environmental and social interests in order to adhere to the standards. It has been observed that strict observation of resource and controlled water usage are facilitated by the business with the purpose of ensuring the growth and development of the business while adhering to the environmental needs. On the other hand, it has been observed that the developments in the human resource memorandum are made with the purpose of ensuring the efficiency and growth. Training and development opportunities are provided to the human resource along with different amenities in order to encourage the active participation of the employees while ensuring the health and wellbeing of the same.

However, the lack of sufficient monitoring and control over the activities that are being undertaken by the suppliers has drastically affected the capability of the business in ensuring the efficiency of the business processes while addressing the social and environmental needs. Therefore, the concerned organization must take the initiative of developing relevant policies and procedures for the suppliers with the purpose of ensuring the fulfillment of the social and environmental responsibilities. The policies, laid down during the contract with the suppliers, and follow up sessions would allow the business in monitoring and controlling the activities of the suppliers and thereby devising efficient growth related policies (Khan & Yu, 2019).

Impact of garment use

According to a survey, more than 49% of the wastes that are dumped in the open yards are specifically from the textile manufacturing units (Jaegler & Goessling, 2020). Moreover, it has been observed that the color of the fabrics and different chemical compactions and toxins are released in the water bodies which has been affecting and depleting the environment. In this connection, the organization has taken up the responsibility of recycling their wastes while encouraging the users to dump their fabric wastes in the accredited areas of the business from where they are collected and reused. AT the end of every product lifecycle, the apparels and clothes were initially dumped by the customers in different open areas.

However, through the organizational policy of recycling the wastes in a return of trivial discounts on their purchases, Gucci successfully encouraged the customers to get involved in their environmental projects while ascertaining that the organization reduces their impact on the environment efficiently. The reduction in the dumping and waste generation related efforts of the business has significantly supported the continuous growth and development of the venture. The discount strategy that was devised by the business has worked efficiently towards attracting the attention of their target customers to get involved in the initiative of reducing the wastes while recycling the apparels and the products (Jestratijevic, Uanhoro & Creighton, 2021).

The strategy has continuously allowed the business in empowering the growth of their environmental initiative towards reducing waste. The strategies of the organization have worked perfectly towards improving their capability of reducing wastes and controlling the resources. However, the differences in the approach of the organization towards treating their own manufacturing and supply chain or procurement activities have been affecting the brand image. Therefore, the concerned organization might take the initiative of developing efficient strategic interventions with the purpose of addressing the sustainable procurement based needs.

Conclusion

Therefore, from the above assessment it might be stated that Gucci has been abiding by the environmental and social aspects while undertaking operations through their own manufacturing units. However, the organization lacked a severe capability of ensuring efficient monitoring and controlling activities on the activities of the suppliers. The aspects has significantly limited the ability of the business in influencing their brand image among the existing business players in the different markets. The discussion identified several shortcomings on the part of the organization while sourcing manufacturing and reducing the impact of their operations on social and environmental setting.

Recommendations

The organization must take the initiative of undertaking:

A detailed monitoring activity over the suppliers in order to understand and control the type of unethical practices that has been affecting the interests of the social and environmental interests

The organization must take the opportunity of devising relevant policies and procedures during the formation of contractual agreements with the suppliers which would support the business in controlling the different areas of operations that are undertaken by the suppliers

The organization must develop efficient contact with different other suppliers with the purpose of reducing the dependency of the same on the same suppliers

References

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