Apparel Supply Chain Transparency: Where is the Weakness? A Case Study on VF Corporation

Abstract

BackgroundWith the public's increasing demand, fashion companies are making more significant efforts to improve their apparel supply chains' transparency, i.e., mapping where the product is made and knowing suppliers' compliance with social and environmental regulations (Fung, Choi, & Liu, 2020). Researchers have explored the impact of supply chain transparency on consumers' purchasing behaviors or fashion companies' business performance (Sodhi & Tang, 2020;Bhaduri & Copeland, 2021). However, the most vulnerable spots for supply chain transparency remain primarily unknown (Ma, Lee, & Goerlitz, 2016). This study aims to identify the critical weakness of apparel supply chain transparency based on a case study of VF Corporation (VF), one of the most historical and largest U.S. apparel companies operating globally (VF, 2021). Unlike existing literature that focused on finished garments only, we evaluated the transparency of VF Corporation's entire apparel supply chain in 2020, which included 327 suppliers making finished garments or textile intermediaries of all kinds (Modi & Zhao, 2020; VF, 2021). The findings of this study will fulfill a critical research gap and significantly enhance our understanding of the nature of today's apparel supply chain and the opportunities and challenges to improve its transparency. Literature reviewExisting studies suggest that several factors may affect the apparel supply chain's transparency. First, as the apparel production process is lengthy and fragmented, fashion companies typically map their tier 1 & tier 2 suppliers (i.e., garment or fabric manufacturers), but not tier 3 & tier 4 suppliers (i.e., yarn or fiber producers) (Lu, 2020). This suggests that supply chain transparency could worsen toward the supply chain's upper side (H1). Second, studies indicate that suppliers in different segments of the apparel supply chain may have their respective transparency priorities (Desore & Narula, 2018;Cai & Choi, 2020). In general, textile mills may prioritize environmental and sustainability-related transparency, whereas garment factories may focus more on social compliance (H2). Third, because of stricter government regulations and more effective enforcement, vendors located in developed countries could perform better than those from developing ones regarding supply chain transparency (Nayak, Akbari, & Far, 2019) (H3). MethodsGiven the nature of VF suppliers' data, we used the MANOVA technique to test the hypotheses (Huberty & Olejnik, 2006; VF, 2021). The dependent variables include three items that measure a supplier's transparency performance, namely: 1) Information: if VF indicates that a supplier provided its environmental or social compliance information =1; if VF indicates that the supplier was unresponsive to VF's request for environmental or social compliance information=0 (VF, 2021) 2021 Proceedings