Humane local production – a global gain?

Abstract

In modern society globalisation is a fact within all industries, the textile industry included. Due to improvement in areas such as logistics and communication international trade have developed fast. As changes occur rapidly on the global market and companies must adjust and revise their processes in order to stay competitive. Because of the global price reduction consumers around the world expect low-price products, which mean that the companies have to find new ways to produce in a cost-efficient way. To maximize profit most of the textile production is situated in low-cost countries due to its labour-intensive character. It is crucial for fashion companies to allocate their activities in their value-chain effectively in order to reduce lead-times. Companies must co-operate within the value chain in order to be competitive on the market. Due to the fact that most textile companies produce in geographical distant countries problems occur. The distance makes it more difficult to shorten lead-times and it is also more difficult to control the suppliers. An alternative for the companies is to find a country close-by to produce in. Consumers used to base their purchasing decision on price and quality but today they are more well-informed and have other demands, amongst them ethical production. Because of this many companies have begun to implement CSR in their organisation which is an ethical and environmental way of conducting business. In our thesis we ask how a textile company organize their value chain with a ethical- and environmental perspective, what they may gain from it and how northern Africa is as a productioarea for southern Europe. We have had a hermeneutic approach throughout our essay. The aim is to understand the textile value-chain seen from an ethical and environmental perspective. A qualitative method of research has been applied since we made a case-study at a company called Mango. Secondary data has been obtained from literature and reports. A large part of our empirics has been gathered through interviews and our own experiences from visits in Spain and Morocco. The most distinct conclusion in our thesis is that companies who work with CSR have to implement it throughout the entire value chain. To make CSR efficient the company must have a ethical foundation based upon a well-defined code-of-conduct. Companies who practice an ethical production can gain competitive advantages but they must make their stakeholders aware of it. If they chose to produce in a country close-by they can receive other advantages within the I ethical and environmental area, such as shorter transports. What can be ascertained from our thesis is that there are more advantages than disadvantages for companies to produce in an ethical and environmental correct way.