Blockchain For A Traceable Circular Textile Supply Chain A Requirements Approach

EMERGING TECHNOLOGIES
Blockchain for
Globalized markets allow retailers to pro-
vide consumers with inexpensive garments,
creating a reinforcing supply and demand
a Traceable,
dynamic. Buyers trade off traceability for
low prices, resulting in opaque supply chains
where natural biogeochemical cycles, social
ethics, and principles of economic prudence
Circular
are systematically transgressed—making tex-
tiles an unsustainable industry. Blockchain as
a new technology provides an opportunity to
increase traceability and, subsequently, sus-
Textile Supply
tainability. This study examines the feasibility
of using blockchain in textile supply chain
management to increase traceability and
sustainability by examining the requirements
Chain: A
for this kind of system from multiple stake-
holder perspectives. It integrates different
bodies of knowledge into a framework that
Requirements
stakeholders can use to holistically address
sustainability issues in textile supply chains.
Results demonstrate how innovative industry
leadership, consumer behavior, policy, and
Approach
technology all can converge to support a
new paradigm of collaborative and sus-
tainable textile supply chain management.
This research is important because industrial
blockchain use cases only solve traceability
issues up to the product use phase—missing
circular economy opportunities to recapture MELISSA J. RUSINEK, HAO ZHANG,
material value at the end of consumer use. AND NICOLE RADZIWILL
The proposed framework can help stake-
holders proactively design traceability and
sustainability into systems by specifying
appropriate requirements.
INTRODUCTION
KEY WORDS
Corporations are facing increasing obligations from government
blockchain, circular economy, closed-loop,
and customers to enhance the traceability of their products. A
corporate social responsibility, feasibility,
GDPR, life cycle, requirements, requirements
comprehensive survey of the textile industry designed to measure
engineering, supply chain, sustainable fash- environmental and social impacts found that there is a large gap
ion, textiles, traceability in the traceability of Tier 2 suppliers (processers), which ripples
through the supply chain. Textile processors treat raw materials
with chemicals and energy-intensive processes to get them ready
for manufacture. Minimum industry standards require that com-
panies are able to identify 50 percent of their Tier 2 suppliers, and
best practice dictates 100 percent traceability (GFA and BCG 2017).
Supply chain traceability means corporations have the ability
to follow material and production flows from raw material extrac-
tion until it reaches the customer (UNECE 2017). The ability to
trace a product throughout its life cycle supports risk manage-
ment, fraud mitigation, quality assurance, worker rights, informed
management decisions, and establishes direct responsibility for
each link in the product life cycle. To determine which phases in
a particular product life cycle have the greatest impact, a life-cycle
sustainability assessment (LCSA) can be carried out. LCSA is
an approach that analyzes economic, environmental, and social
4 SQP VOL. 21, NO. 1/© 2018, ASQ

Blockchain for a Traceable, Circular Textile Supply Chain: A Requirements Approach
impacts of a product throughout its life cycle including traceability afforded by blockchain can facilitate keeping
the extraction phase, production phase, use phase, and materials in closed-loop systems, avoiding landfills and
end of life. Unfortunately, due to overwhelming complex- incineration (Ellen MacArthur Foundation 2016; Project
ity in industrial systems, lack of firsthand data collection, Provenance Ltd. 2015).
data inconsistencies, and the tendency for supple chain Although the need for transparency and efficiency in
partners not to collaborate, such analysis is subject to supply chains has been established, and blockchain has
many limitations and uncertainties (Chkanikova and been proposed as a software solution (Benton et al. 2018),
Kogg 2015). there is a gap in the extant literature indicating how
Opaque supply chains prevent consumers and other blockchain could be used as a traceability mechanism
stakeholders from obtaining information that may be of to facilitate closed-loop supply chains. It is this gap that
concern, such as environmental impacts, “sweat shop” this article seeks to fill.
working conditions, and product authenticity and safety
(New 2010). While corporations may desire to have fully
traceable products, most simply do not. Actors in a
Literature Review
supply chain wishing to make educated and sustainable The need for supply chain traceability is often attrib-
purchases must collaborate and innovate ways to share uted to globalization as companies shift from in-house
information safely and efficiently. To manage risks to all manufacture to global suppliers that have less expensive
stakeholders—including noncompliance and reputational labor and varying raw material availability (Kumar,
risks for corporations—products must be traced from Hallqvist, and Ekwall 2017; Nakasumi 2017). General
raw material extraction to final products (or garments). textile industry studies show that raw material produc-
Addressing the problem of supply chain traceability tion has the greatest impact on water use and is the
requires collaboration among stakeholders and deploying third largest contributor to energy emissions (GFA
technical solutions to aid the transition. Blockchain is and BCG 2017). A recent case study examines the
a nascent technology with a lot of hype that promises benefits of implementing corporate transparency and
to disrupt status quo operations in many industries and concludes that efforts to make supply chains more
supply chains (O’Leary 2017). As a distributed (decentral- transparent— sustainability reporting, certifications,
ized), immutable, verified, trusted, secure transaction and disclosure — can be beneficial in some instances,
ledger, blockchain platforms can record and store infor- but will always be subject to trade-offs, so is not always
mation pertaining to raw material harvest, production, an aspiration in and of itself (Egels-Zandén, Hulthén, and
product use, end of life, sustainability certifications, and Wulff 2015). Nakasumi (2017) explores how blockchain
vendor contracts. It is not a lynchpin solution; however, applications can mitigate supply chain risks specific to
its distributed network protects consensus (verified, manufacturers, but does not expand the analysis to how
audited) data with cryptographic user keys and cre- risks could be addressed systemically or holistically.
ates trust in a complex, dynamic, and interdependent Another recent article proposes a framework for a dual
system (Kshetri 2018). Radio frequency identification approach utilizing blockchain technology to address
tags (RFIDs) and quick response (QR) codes also offer the shortcomings of current supply chain information
inconspicuous technological solutions that can enhance systems— one that is private for enterprises and another
supply chain traceability (New 2010). Cutting-edge public ledger (Wu et al. 2017).
manufacturers have developed smart circuits that can A United Nations Economic Commission for Europe
be embedded into any textile and track data that users 2017 draft report on transparency in textile value chains
control (Lederer et al. 2018). Such technologies lay the emphasized that traceability is critical for legal compli-
foundation for industry collaboration and are beginning ance as well as corporate social responsibility (CSR). The
to engage users in a new way where the applications are report acknowledged blockchain’s capacity to monitor
only as limited as designers’ imaginations. supply chain transactions in real time; however, for
Many studies examine use cases where blockchain these transaction records to be useful, life-cycle analysis
enhances supply chain traceability—for example, food (LCA) methods and standardization of key performance
tracking, port logistics, pharmaceuticals, and automotive indicators (KPIs) should be advanced (UNECE 2017).
supply chains (Deloitte 2017; Francisconi 2017). However, Confidence in worker safety and responsible chemical
only a few studies broadly mention that the product and material use throughout a product’s life cycle cannot
www.asq.org 5
be taken for granted without adequate documentation. As Policy makers can use this framework to implement
corporations lose the ability to trace their supply chains, circular economy solutions (preserve resources) and
they face mounting pressure to assume responsibility facilitate compliance; businesses can use it for proactive
and bridge the gap to achieve best standards (Kim and supply chain management, and consumers can use it
Davis 2016). Consumers are concerned with where their for education about the impacts of consumption, care,
clothes are coming from in light of tragedies (Jacobs and and disposal choices. All stakeholders can use this
Singhal 2017). In an effort to protect brand reputation, framework for long-term management, risk reduction,
companies take on voluntary CSR standards that aim to and to contribute to sustainability efforts.
improve the safety of workers upstream with agreements
(Rahim 2017; Jacobs and Singhal 2017).
A 2017 report on the “Pulse of the Fashion Industry”
METHODOLOGY
recognizes efforts toward developing KPIs (GFA and BCG In this study, a framework was developed using the case-
2017). This report makes reference to the Higg Index, study methodology to employ blockchain for circular
which is a tool that rates the social and environmental and sustainable textile supply chain management (see
impacts of specific materials and processes used in Figure 1). This framework is designed to account for the
garment manufacture from cradle to gate. This index is interests of all stakeholders in a textile supply chain and
available to the public and is similar to other LCA tools, brings together five key aspects. First, the life cycle of
but specific to garment manufacture. The index platform a garment and a closed-loop supply chain were defined.
allows companies to import their LCA data and virtually Second, the sustainability metrics to be stored on the
blend materials to see the potential impacts of their blockchain are described from a practical perspective.
material and processing choices (GFA and BCG 2017). Next, transaction details are articulated to demonstrate
There are companies offering a range of blockchain
solutions for producers, retailers, and customers to FIGURE 1 Framework model used in this
increase product traceability and customer satisfac- study
tion. Platforms offer businesses a way to communicate
Supply Chain
their sustainability certifications and product sourcing Life Cycle
information to customers, as well as manage their own Waste reduction,
data on the blockchain platform (Project Provenance Ltd. remanufacture, reuse
2015). Such platforms offer businesses the opportunity

to present supply chain information as a story that Information and
ends at the use phase. This study goes beyond those Physical Flows
Sustainability metrics,
requirements and also addresses barriers to reuse, selecting data to
remanufacture, and recycle textiles at end of consumer record on blocks
use. Specific objectives include:
• Develop a framework integrating blockchain Secure Transactions
Goal
Using blockchain
into textile supply chain management to Transaction for circular,
understand how information flows could be requirements sustainable supply
and mechanisms chain management
captured and used by various stakeholders.
• Understand the system and policy
Long-Term Policy
requirements for long-term management of and Management
textile supply chains using blockchain. Regulatory
requirements,
• Understand how innovative industry governance,
leadership, consumer behavior, policy, and strategic planning
technology all can converge to support a new
paradigm of collaborative and sustainable
System and Technology
textile supply chain management. Use a case Requirements
©2018, ASQ
study to demonstrate implementation of the User interface,

data management
proposed framework.
6 SQP VOL. 21, NO. 1/© 2018, ASQ

how assets can be securely exchanged. This is placed in environment (Nakasumi 2017; Ngai et al. 2014). Figure 2
the context of long-term goals to demonstrate why proac- shows a closed-loop textile life cycle that could be real-
tive environmental management is important. Finally, the ized by integrating tracing mechanisms from a garment’s
system and technology requirements to engage customers incipiency; closing the loop through reuse, recycling,
and build an effective user interface are discussed. remanufacturing, and composting of textiles. The most
preferred closed-loop system is textile reuse (and repair)
because it avoids landfilling and incineration with the least
Life-Cycle Supply Chain extra supply chain steps and consequent energy demands
By tracing the life cycle of an individual garment in terms (Ilgin and Gupta 2009). The second preferred option is
of its components, opportunities for enhanced sustain- textile remanufacture where second-hand garments in
ability can be identified at various stages using integrated good condition are consigned by designers who draw up
technology. In a typical textile supply chain there are plans to deconstruct them and transform them into newly
dynamic and complex relationships between stakehold- designed pieces (Dissanayake and Sinha 2015). Finally,
ers. Integrated technology that uses decision support textile recycling takes post-consumer or post-industrial
systems and tracing devices can mitigate sustainability waste and mechanically processes it to become feedstock
challenges if implemented holistically in a collaborative for new fibers (composting is considered another form of
FIGURE 2 A closed-loop life cycle of textiles.
Raw
Compost/ material
Biodegradable extraction Raw
Avoided burden material
Closed loop processing
Recycle Recycle
Second-
hand
Landfill and Staple fiber
logistics
incineration production
Consumer
responsible
disposal
Yarn
production
Consumer
use
Remanufacture Finishing and

coloring
Reuse
Retail
Apparel Design
Distribution
manufacture
©2018, ASQ
Adapted from (Muthu 2015)
www.asq.org 7
recycling) (Muthu 2015; World Health Organization n.d.). TABLE 1 Categorical metrics of information
These closed-loop systems can be catalyzed by emerging to include on individual blocks
second-hand markets eager to capitalize on opportuni-
ties from traceable and recoverable resources. This is Metric Information to include on block
all premised on close stakeholder collaboration and the a. Smart contract—executed
transactions (e.g., payments and
responsible disposal of garments by consumers (Muthu deliveries) [3, 4, 7, 8]
2015) who are empowered by information availability. b. Bank access to network [3]
Economic
c. Insurance information [1]
Sustainability Metrics d. Age of material or resource

e. Market resources and commodities
Recorded on Blocks prices

a. Relevant environmental certifications
Managing the information stored on a blockchain system (e.g., EU Ecolabel, FSC certification,
should be relevant to the economic, environmental, chemical certifications like OEKO-
TEX, GOTS, Cradle to Cradle) [5]
social, and functional metrics of individual garments. b. LCA impact data
Storing economic information using blockchain-enabled c. Higg MSI impact data [6]
smart contracts has been demonstrated to increase Environmental d. Raw materials used [2]
e. Chemicals used
supply chain efficiency and can therefore result in cost
f. Amount of water used
savings for transacting supply chain partners (Chen g. GHG emissions
et al. 2017). When economic information is captured h. Waste, byproducts, and coproducts
using blockchain at each supply chain step, an auditable produced
i. Biodegradability, compostability
chain-of-command for materials and resources becomes
a. Relevant certifications (e.g., Fair
available. Environmental metrics are important to track Trade, GOTS, OEKO-TEX, SA8000)
and store to holistically evaluate negative impacts and pos- b. Living wages (120 percent of
sible mitigation strategies, especially since environmental minimum wage) [6]
Social c. Worker age and hour restrictions;
impacts accumulate throughout a textile’s life cycle. Social
freedom to organize [6]
aspects concerning garments can be made available in a d. Gender equality [5]
transparent manner to ensure corporate codes of conduct e. Responsible care instructions [5]
are being upheld upstream and consumers have agency f. Responsible disposal instruction [5]
over the downstream impacts they cause. Functionality a. Intended use [2]
b. Capabilities (e.g., heating, cooling,
metrics are important to include on the blockchain for data tracking, water resistant,
consumer and post-consumer ease of reference. All these antimicrobial, UV protection) [9]
parameters are suggested to be included practically (see Functional c. Design for X (e.g., environment,
disassembly; privacy) [10]
Table 1). The specific parameters logged on the blockchain d. Warrantee information [1] ©2018, ASQ
network will depend on which stakeholder is inputting e. Repair information
the data. Materials and final garments will be traced at f. Quality control information
the unit level by each stakeholder in the system (Deloitte [1] (Marr 2018);
2017). As information is captured at each step in the [2] (Project Provenance Ltd. 2015);
[3] (Francisconi 2017);
supply chain, the chain of command for products, their
[4] (Jeppsson and Olsson 2017);
components, functions, and concomitant impacts will [5] (Muthu 2015);
be compiled, creating traceability and opportunities [6] (GFA and BCG 2017);
for more sustainable decision making. Comprehensive [7] (IBM Corporation 2018);
[8] (Ethereum Blockchain App Platform 2018);
management of these physical and informational flows [9] (Kiekens et al. 2014);
can provide a range of assurances for all stakeholders. [10] (Fabiano 2017)
Economic metrics access to network implies that a financial institution

A smart contract is a coded document detailing the involved in the supply chain is granted access to the
terms of an agreement that executes automatically once blockchain network via the smart contract in order to
terms such as payments and deliveries are verified and read and write information such as letters of credit, and
met (He et al. 2016; Jeppsson and Olsson 2017). Bank processing payments between parties as stipulated in an
8 SQP VOL. 21, NO. 1/© 2018, ASQ

agreement (Francisconi 2017). Insurance information access for stakeholders. There could be market demand
can be stored on a blockchain network so it is easily for certain types of textiles (denim, UV protection,
accessible to stakeholders who require this information antimicrobial, and so on), in which case quickly acces-
from their supply chain partners (Marr 2018). The age of sible and tracked materials would facilitate second-hand
a material or resource is important to include because markets. If a product is designed for disassembly, it
of the cascading value of materials (Ellen MacArthur may command a higher market price from second-
Foundation 2016). By knowing the age of components, hand markets. Warranty, repair, and quality control
value can be ascribed by second-hand markets. Links information will be useful to customers and retailers by
to market prices of resources and commodities allows enhancing efficiency and consumer protections. Storing
a variety of procurement decisions to be compared in these metrics encourages customer loyalty (good for
real time. retailer) and customers to take advantage of warranty
and repair programs to extend the life of products (good
Environmental metrics for customer).
Storing relevant environmental certifications on the
blockchain network makes this information easily acces-
sible to stakeholders who require or are interested in this
Secure Transactions
information. LCA and the Higg Material Sustainability Using Blockchain
Index (MSI) are tools for assessing the environmental and Transactions in a blockchain ecosystem are com-
social impacts that result from product design, material, monly and simply described as exchanging assets on
and processing choices (Sustainable Apparel Coalition a decentralized ledger database that stores immutable
2018b). Access to these impact data allows all actors and auditable information using the most secure technol-
across a supply chain—from raw material producers to ogy available on the market. The design of blockchain
consumers—to see the full impact of their choices with systems is such that stakeholders can access trusted
reference to specific calculations that can serve as a basis and verified information in real time (Deloitte 2017;
for exploring alternative procurements. Tracking waste, Fabiano 2017; Francisconi 2017; Kim and Laskowski
byproduct, co-product, information allows second-hand 2016; Kshetri 2018). The mechanics of blockchain
markets to compete for these resources. Degradability/ systems are discrete and must not be conflated: first,
Compostability information enables consumers to there are distinct blockchain platforms, applications, and
responsibly dispose of garments. services, offering clients a variety of options depending
on needs, uses, and permission preferences; second,
Social metrics there are “four Ps” of blockchain technology—public,
Storing relevant social certifications on the blockchain private, permissioned, and permissionless, which can
network makes this information easily accessible to be mixed and matched to create a system dictating the
stakeholders who require or are interested in this infor- level of information accessible by stakeholders (who can
mation. Living wages are defined as having the ability read and who can write data) (Francisconi 2017). What
to meet basic necessities without working excessive makes blockchain transactions unique when compared to
overtime (OECD 2018). By proactively monitoring worker traditional ledger databases and IT systems is the secure
age, hour restrictions, freedom to organize, and gender transaction process and the decentralized network on
equality metrics, brands can reduce reputational risks which these transactions take place (Project Provenance
and advertise their commitment to human rights and Ltd. 2015). Cybersecurity is managed by the use of sepa-
equity (GFA and BCG 2017; Muthu 2015). Responsible rate public and private keys for cryptographically signing
care and disposal information can empower consumers and accepting transactions, and the use of algorithms
to understand their impacts in this system and modify for validating transactions, which are explained next
their behavior (Muthu 2015). (Jeppsson and Olsson 2017; Kshetri 2018).
The peer-to-peer transaction process is as follows:
Functional metrics transactions are initiated by a user; a transaction is then
Storing the type of textile and its capabilities adds an authenticated by members within the network; a block
extra layer of transparency and ease of information (time-stamped data) is created; then blocks are validated
www.asq.org 9
using different algorithmic mining mechanisms (such a transaction is verified by the peer that properly solves
as proof-of-work, proof-of-stake, hybrid models, and so the algorithm, and this peer then updates the ledger. To
on) to find the correct place to store this block; once manipulate or change any information on a block after
validated, the block is “chained” (linked in chronological it is verified, the entire chain of blocks would need to
order) to previous blocks in the system. A user will have be modified, which is exceedingly difficult because all
a public key and a private key. The former is shared blocks are time-stamped, and writing data requires
with other users in the network; the latter is not shared consensus algorithms to be solved. Information could
externally and functions as a digital signature to authen- also be manipulated if any entity controls more than 50
ticate ownership of goods and information. Both keys percent of the network (Francisconi 2017; Jeppsson and
use encryption technology and the validation algorithms Olsson 2017). See Figure 3 for simplified demonstration
to keep transactions secure. When a user initiates a of transactions (Madhwal and Panfilov 2017).
transaction, it is broadcast to the entire network and Throughout the life cycle of a garment, transac-
addressed to another user’s public key using one’s own tions coupled with the appropriate metrics outlined in
public key. Typically, all peers in the network start solv- Table 1 would be added to blocks. Although the physical
ing algorithms to decrypt the transaction. Authenticity of information network is decentralized, entities that are
FIGURE 3 Simplified blockchain transaction process—public permissionless ledger.

Source: (Francisconi 2017; Jeppsson and Olsson 2017; Nakasumi 2017). Distributed network image source: (Nair 2017)
Update ledger
Don’t update ledger
Organization
• Each organization has a public key and private
α
key that use encryption to perform transactions.
• Every organization has several peers.
• All peers are within the same network. Yes? No?
Transaction
document
Organization α initiates a transaction. By hashing
the transaction, a code is generated that will create Hash match?
Hash a block. Blocks are linked together starting with
transaction
the hash code of a genesis transaction, n. All
subsequent transactions build upon this unique
Private key Peer X Peer Y
hash code, n + 1, n + 2 ... once demonstrated to be
valid. Organization α uses its private key to
cryptographically sign the transaction and sends it Public key
to the distributed network of peers.
Peer 1 Peer 2
A distributed network of peers validates Decrypt

transactions. Each peer calculates algorithms—the transaction
ability to solve a complex problem allows a peer to
Cryptographically update the ledger. Hash
sign
(This is typically the most energy intensive part of received
the system.) transaction
Transaction All peers receive a copy of the digital signature

document (which has the encrypted hash code) and hash and Receive digital signature
decrypt the transaction themselves with their and transaction
public key. If the decrypted hash code matches
Public key that in the digital signature, the transaction is
committed to the ledger.
Peer Peer
A C Peer
Peer
©2018, ASQ
B D
10 SQP VOL. 21, NO. 1/© 2018, ASQ

consumer-facing, namely retailers, could take on a facili- The implications of the blockchain transaction
tator role to harmonize the process and effectuate smart system are truly revolutionary because of the deviation
contracts (Francisconi 2017) (see Figure 4). A critical from centralized networks that are prone to errors and
precursor for a retailer to use blockchain is its ability fraud. Another game-changing feature is that blockchain
to trace all upstream organizations in the supply chain flips the script of traditional linear transactions from
and that all actors have the necessary IT infrastructure data push to data pull (Francisconi 2017); rather than
to support this new paradigm (Bonanni 2018). Assuming being sent a piece of data that could or could not be
a retail initiative and the requisite infrastructure is in real, stakeholders can pull trusted, verified, real-time
place, the transactions would flow as follows, with each information from the network. Unlike traditional IT
separate stakeholder being a different user of the system. systems, blockchain systems can provide access to
A genesis transaction creating a hash value for future important stakeholders outside of the direct network,
blocks to be built upon (Wu et al. 2017) is initiated by such as consumers and banks that rely on data being
the company harvesting and processing the raw materials pushed out to them. In a blockchain system, banks would
and validated by the recipient of these raw materials; be included in the smart contract to expedite clearings
when raw materials are turned to fibers, transactions and other important financial transactions (Francisconi
are initiated by the fiber producer and verified by the 2017). Because banks are increasingly concerned with
yarn producer once received; yarn producers initiate fraud, clearing times are delayed to provide extra time
another transaction to be confirmed by finishing and to validate transactions – an unnecessary constraint in a
coloring agents; then apparel manufacturers begin the blockchain system where transactions are automatically
unit-level authentication once they receive final fabrics. verified (Korpela, Hallikas, and Dahlberg 2017).
The apparel manufacturer incorporates a smart device Blockchain systems can provide immutable, secure,
into the garment, either into the physical fabric or authentic, verified, agile, and real-time data to all
the garment label, importing the legacy supply chain stakeholders, which is a significant divergence from the
data. Distributors also document their activities on status quo (Deloitte 2017; Francisconi 2017; Jeppsson
the blockchain network. Consumers can scan a smart and Olsson 2017; Project Provenance Ltd. 2015). Such a
device embedded in the garment to see provenance system can promote a circular supply chain, because with
and impact data, which is curated by the retailer but digitized components second-hand logistics providers
verified using blockchain. Once users no longer want can automate the distribution of garments to appropri-
a garment, information on the blockchain can assist ate second-hand markets. Such a system can promote
with responsible disposal, matching the garment with sustainable supply chain management because of the
an interested second-hand party. economic efficiencies, and because all actors involved
FIGURE 4 Textile retailer facilitating blockchain ecosystem

Actors traditionally outside the supply chain—users, second-hand collectors, banks—are engaged to promote closed-loop
systems. Smart contracts increase overall efficiency.
Source: (Francisconi 2017)
User
Retailer
Present clean
data to user
Second-
hand
Smart contract logistics
Raw Fiber Finishing Apparel Banks

material production and coloring manufacture Distribution
©2018, ASQ
www.asq.org 11
in the supply chain—from raw material producers to onto labels (GFA and BCG 2017). On the other hand, the
consumers— can see the full environmental and social few labeling requirements, as in the case with organic
impacts of their choices and use this information as the labels, would be streamlined in a blockchain system that
basis for exploring alternative procurements. could store certificates of inspection on the ledger. Many
brands are already disclosing voluntary information via
System Requirements their garment labels, such as the relative carbon, water,
and waste footprints compared to the industry standard,
and Technology and responsible care instructions. Finally, companies
Finally, system requirements in terms of human capital, use blockchain technology in different industries to
labeling, and consumer behavior were addressed to trace product provenance and share information with
determine implications for technology implementa- customers in innovative ways. Customers can scan a
tion. The joint requirements of data security and legal QR code to “discover the unique journey behind this
compliance were also taken into account: product” in a textile example displayed in Figure 5.
Human capital FIGURE 5 Garment label with QR code linked

The blockchain textile supply chain ecosystem is to blockchain displaying story map
designed to educate and empower consumers to
responsibly care for and discard their clothing, devel-
oping more robust second-hand circular markets.
Any team of developers and coders can access open-
source information to build the components of a
blockchain ecosystem; alternatively, well-established
and start-up private enterprises can be hired to build
custom blockchain applications, platforms, or services
(Vankov 2017a).
Labels
The link between tracing unit-level garments and the
©2018, ASQ
blockchain network can be the limiting factor of the
system. IoT devices (devices collecting data that connect
to the internet) embedded in garments will interface Source: Project Provenance Ltd. 2018
with users to tell the story of a product, its provenance
and impact, and provide consumers with the necessary Consumer behavior
information for responsible care and disposal (Project Because of the heavy environmental impacts that
Provenance Ltd. 2015). Utilizing QR codes on garment occur during the use and disposal life-cycle phases of
labels or other tech mediums embedded in garments, textile supply chains (GFA and BCG 2017; Muthu 2014),
brands engage customers to stay ahead of the curve. addressing these issues is of chief concern. While it is
EU regulation requires textiles to be labeled with their understood how consumer behavior changes can benefit
fiber composition. This regulation does not require any sustainable supply chain management, it is unclear how
additional information to be included on the label (such to directly motivate behavior change or gauge what types
as country of origin or care instructions) (European of impact and care information they would want to see.
Commission 2011). A 2016 regulation requires that all Consumer care and disposal behavior can offer water,
products labeled as organic imported into the EU or energy, and eco-toxicity savings. By washing clothing
traded among member states must be registered in the in cool water and line drying, up to 80 percent of a
TRACES database and accompanied by certificates of garment’s greenhouse emissions can be avoided (Muthu
inspection (European Commission 2016c). Despite the 2015). Responsible care also includes implementing
few direct labeling requirements, companies seeking strategies to reduce microfiber pollution, which occurs
a competitive advantage are increasingly disclosing from washing acrylic, nylon, and polyester fibers. These
voluntary environmental impacts of garments directly strategies include short, cold, full laundry loads that use
12 SQP VOL. 21, NO. 1/© 2018, ASQ

liquid soap rather than powder soap, short revolution individual garments (Know the Origin 2018b). The
spin cycles, and, of course, reducing consumption of particular garment selected for this case study is a pair of
these fabrics in the first place (Italian National Research black leggings. They are made from 100 percent Lenzing
Council 2014). As consumers increasingly have access modal fabric (Know the Origin 2018a). The retail brand
to data like these, it can reinforce demand on retailers provides some explicit information that is used in this
to provide them. In Figure 6, a hypothetical textile label case study. The remaining information needed to imple-
user interface using a QR code is drawn to expand the ment the framework properly is assumed and denoted
current model for information that can be harnessed accordingly. The supply chain for this garment starts
using blockchain and IoT tracking devices. with raw material extraction in Austria, where wood is
harvested from an integrated pulp mill that creates and
FIGURE 6 Hypothetical textile label QR code processes cellulosic textile fibers into colored fabrics. A
—user display U.K. retailer designs the garment and contracts with an
apparel manufacturer in India to assemble the garment
Product provenance using the aforementioned fabric. Then, the garments are
distributed to the retailer and purchased by a consumer.
Impact data To close the loop for this garment, various end-of-life
strategies are outlined. See Figure 7 on the next page for
Responsible care and the proposed closed-loop supply chain of this garment.
©2018, ASQ
disposal information
Managing Information
Incorporating responsible care information on the and Physical Flows
garment label educates customers about the impacts There are numerous stakeholders in this garment’s
of the choices they make. Furthermore, responsible supply chain, and each has its own preferred metrics
disposal will help clothing avoid landfill and incinera- that it would record on the blockchain platform (detailed
tion. Certain textile materials are more favorable for in Appendix 1). As metrics are captured on the per-
recycling than others and all materials have a cascading missioned ledger and become available to parties in
recycling value; some garments are biodegradable and the system, certain private information pertaining to
compostable (Pavarini 2017), and some clothing may prices and proprietary data does not need to be added
retain a high consigning value. As individual garments to the ledger. Private chaincode channel connections
become traceable in terms of their specific component demonstrate how segregated transactions can take place
materials and processing, second-hand markets can among subsets of private parties within a larger supply-
become more efficient—creating a win-win-win scenario chain network. Final garments have unique unit-level
for customers consigning garments after use, retailers provenance, care, and disposal information available
that can gain increased customer loyalty and supply via a QR code. There are several ways to establish what
chain efficiencies, and governments eager for closed-loop exactly a customer will see when he or she scans the
solutions, data security, and legal compliance. QR code. When a retailer sells a garment that makes
verified blockchain data available, it is at this stage that
CASE STUDY OF EXEMPLAR traceability becomes transparency.
GARMENT: LEGGINGS Secure Transactions on

This section applies the proposed framework to a case
study garment. The selected garment is a pair of ath- Blockchain Platform
letic leggings sold in the United Kingdom to a German The Hyperledger Fabric Framework is a Linux Foundation
customer that are traced throughout their life cycle Project. Hyperledger Fabric (Fabric) is a permissioned
using blockchain. blockchain platform that implements new approaches to
Fashion retailers that aim to enhance sustainability executing permissioned peer-to-peer transactions in a
and ethical practices in their supply chains may provide distributed ledger where transacting parties are known.
customers with information about the provenance of This framework manages members (peers, nodes, and
www.asq.org 13
FIGURE 7 Proposed closed-loop supply chain for exemplar garment
Raw material
Compost/ extraction—
Biodegradable lenzing Raw material
Avoided burden processing—
Closed loop lenzing
Equivalent roles Recycle
in supply chain Textile
recycler—
Second-
SOEX
hand logistics— Staple fiber
Landfill and
I:CO production—
incineration
lenzing
Consumer
responsible
disposal
Yarn
production—
lenzing
Consumer Remanufacture
use—German
citizen
Finishing and
coloring—
Textile
lenzing
Reuse remanufacture—
SOEX
Retail—
know the origin
Apparel Design—
Distribution— know the
manufacture—
DHL
©2018, ASQ
fair clothings origin
Adapted from Muthu 2015
ordering services) with membership service providers are known and permissioned in the system)—agree that
(MSP) and offers modularity— often described as a a contractual provision has been met and is consistent
“plug-and-play” system—making it highly customizable with the endorsement policy that has been established
and versatile. Fabric uses smart contracts, which it calls ahead of time. This is opposed to proof-of-work systems,
“chaincode,” where members have access to specific, where transactions can be validated only after all
separated private channels to execute their contractual nodes have participated in validating transactions to
obligations confidentially while only broadcasting compensate for the fact that in public blockchains users
selected information to the entire blockchain network. are not known. The consensus protocols (how nodes
Fabric’s architecture separates transactions into three in the system order information to be added to the
steps: execute, order, validate, diverging from most other chain) of Fabric are unique because users are known
blockchain smart contract-capable systems that follow and permissioned, and different endorsement policies
dual order-execute structures, which rely on energy- can be established depending on the circumstances
intensive consensus mechanisms such as proof-of-work. (Androulaki et al. 2018; Hyperledger 2017).
The fabric three-tiered transaction mechanism allows There can be several or many MSPs in a network
transactions to be executed as long as the endorsing that issue keys (public and private) and enrollment
parties (parties to the specific chaincode channel who certificates that allow parties to transact on the network.
14 SQP VOL. 21, NO. 1/© 2018, ASQ

The MSPs dictate who does what and when, signing off endorsement policy, then the validated transaction goes
on transactions if they are within an endorsement policy. to the ordering service. The ordering service creates
Each MSP will have at least two peers for redundancy a new block with the chronologically time-stamped
purposes. When a member executes a transaction on the transaction data and publishes it to all the peers in the
Fabric network, they are initiating a transaction simula- network, who receive an updated version of the ledger.
tion. The simulated transaction is then sent to the limited Figure 8 demonstrates specifically how these transactions
group of endorsers in the specific chaincode network take place between organizations on the Fabric platform
who agree (or not) that a transaction is valid within the (Androulaki et al. 2018; Hyperledger 2017).
FIGURE 8 Simplified interorganization transaction on proposed private permissioned

blockchain platform.
Organization A Organization B
(abbreviated)
1
SDK Transaction
(software 1 proposal
development kit)
Peer Peer Peer

1 2 3
Peer 1 Peer 2 Peer 3
Endorsement response
3 Orderer
4
Invocation request
2 3
Orderer Invocation ...
Organizations A and B:
• Part of same network
Inter-organization communication
• Part of same channel (separate insulated data exchange)
• Each have at least two or more peer nodes Internal systems
Each peer:
1 4
 Has a separate physical copy of ledger
2 3
 Accepts and executes a proposed transaction (Step 1) 1 4
 Cryptographically signs proposed transactions (Step 2)
2 3
Orderers at Organizations A and B:
 Validate/Verify policies and crypto materials (Step 3)
 Send transactions to be committed to ledger (Step 4)
©2018, ASQ
Source: creative commons adaptation from Hyperledger 2017; Vankov 2017b
www.asq.org 15
This system prevents issues of double spending and consumers will demand assurance that their clothing
eliminates race conditions. (Androulaki et al. 2018; is made in more environmentally and socially friendly
Hyperledger 2017; Vankov 2017b) Most features in Fabric ways, and may not be willing to pay for items that do not
are customizable, and use cases exist where different meet higher standards in the future. Therefore, looking
levels of users outside of the transaction network can forward, all stakeholders are behooved to adopt trace-
query the system. Such an application would be useful in ability solutions sooner than later. To date, blockchain
this case study because this would allow customers and is the best available technology to securely manage and
other stakeholders outside of the transaction network trace all of the variables in this complex supply chain
restricted access to the verified data recorded on the (Deloitte 2017).
blockchain (Androulaki et al. 2018; Hyperledger 2017). As cybersecurity and data security become more
prevalent and serious issues, this framework details
DISCUSSION AND how assets can be exchanged securely using the best
available cryptography and algorithmic validation
CONCLUSIONS technology. Data are stored in a decentralized fashion
There is a pressing need for sustainable solutions in many as opposed to traditional systems where data are vulner-
industries, but particularly in the textile industry. The able due to centralized storage. These state-of-the-art
first step toward implementing sustainable solutions is security features offer technical solutions to comply
to increase traceability and transparency, something with EU GDPR regulations. As IoT devices continue
blockchain technology can address. The proposed to proliferate, the framework of this study details how
framework can help policy makers, businesses, and companies can proactively plan to incorporate tech
consumers avoid risks by proactively designing trace- with textiles in accordance with the guiding principles
ability and sustainability solutions into the system. of privacy-by-design (Fabiano 2017). Without this long-
The case study demonstrates that blockchain can term management strategy, industries will be vulnerable
enhance sustainability, traceability, and transparency, to technological and security perturbations later on
enabling all supply chain stakeholders to evaluate total (Deloitte 2017).
life-cycle impacts and make better and more strategic Governments can actively manage environmental
procurement decisions—proactive rather than reac- risks that arise from practices abroad that conflict
tive. The introduction of blockchain simultaneously with domestic policies. Chemicals that are banned in
can empower consumers to adopt better consumption, Europe (such as NPE) are used in textile processing in
care, and disposal behaviors, and reduces barriers for foreign countries and ultimately imported into Europe,
second-hand markets. causing the same environmental and human health
The proposed framework in this study supports long- problems the domestic policy sought to avoid (European
term management in several ways. First, it allows the Commission 2016a).
industry to comply with existing and future regulations There is a critical need to embrace systems and
in more streamlined and efficient ways. Analyzing the life-cycle thinking. The current paradigm and mindset
public policies listed in the Appendix 2 holistically, it of “take-make-waste” is the root cause of the sustain-
seems that the textile industry needs a way to proactively ability issues discussed in this study. If progress and
manage current and future compliance requirements. risk avoidance are desirable outcomes, then systems and
Textile retailers that facilitate blockchain solutions early life-cycle thinking, as well as interaction design, should
on will be more resilient to industry disruptions because be emphasized as tools for understanding how to begin
they will be able to trace their entire supply chain and to address sustainability challenges (Ellen MacArthur
ensure compliance on the various levels required of Foundation 2016; Ramkumar et al. 2018). Future
them. Organizations will face mounting pressures from research is needed on quantitative and local implementa-
policy makers to address traceability and data security tions, as well as consumer behavior motivations. This
issues, and the ones that do not implement solutions study was conducted from a global perspective; however,
quickly will face compliance risks or be pushed out of waste is managed on a local level and, therefore, a local
the market. Additionally, with the increasing information pilot project to test the implementation and quantify
transparency and credibility afforded by blockchain, the proposed intervention is necessary.
16 SQP VOL. 21, NO. 1/© 2018, ASQ

ACKNOWLEDGMENTS European Union. Available at: https://eur-lex.europa.eu/legal-content/EN/

TXT/PDF/?uri=CELEX:32003L0087&from=EN.
The authors would like to thank James Madison University and University
of Malta, and Dr. Maria Papadakis and Dr. Elisabeth Conrad for their input European Commission. 2004. The EU to lift textiles quotas from
and support. Critical technical and industry perspectives were provided 1 January 2005. Available at: http://europa.eu/rapid/press-release_
IP-04-1470_en.htm.
by Circle Economy, IBM Global Blockchain Labs, UPSTREAM, and Closed
Loop Partners. European Commission. 2005. The EU Emissions Trading System (EU
ETS). Available at: https://ec.europa.eu/clima/sites/clima/files/factsheet_
ets_en.pdf.
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Rahim, M. M. 2017. Improving social responsibility in RMG industries BIOGRAPHIES
through a new governance approach in laws. Journal of Business Ethics Melissa Rusinek has a bachelor’s degree in public policy from CUNY
143, 807–826. Available at: https://doi.org/10.1007/s10551-016-3131-9. Baruch and an international master’s degree in environmental manage-
Ramkumar, S., F. Kraanen, R. Plomp, I. Baer, A. Walrecht, P. Hirsch, and B. ment and sustainability from James Madison University and the University
Edgerton. 2018. Linear risks. Available at: https://www.circle-economy.com/ of Malta. She has eight years of government relations consulting experi-
wp-content/uploads/2018/06/FINAL-linear-risk-20180613.pdf. ence, where she worked with a variety of clients on diverse issues ranging
from sweeping financial legislation, anaerobic digester pilot programs,
Shen, L., and M. K. Patel. 2010. Life cycle assessment of Man-made
electric vehicle market and policy research, and advocacy for social
Cellulose Fibers. Lenzinger Berichte LIFE 88, 1–59.
organizations. Her research interests include social justice, innovative
SOEX Recycling Germany GmbH. 2018. SOEX. Available at: https://www. technology to enhance sustainability, the intersection of public and pri-
soex.de/en/recycling-germany/#a2. vate organizations, sustainable development, the circular economy, and
Sustainable Apparel Coalition. 2018a. Modal COLOR vs GOTS Organic Cotton stakeholder collaboration.
Higg MSI. Available at: https://msi.higg.org/process/101/lenzing-modal- Hao Zhang is an assistant professor in the School of Integrated Sciences
color?return=%2Fsac-materials%2Fdetail%2F209%2Fmodal-fabric. at James Madison University. He received bachelor’s degree in industrial
Sustainable Apparel Coalition. 2018b. Sustainable Apparel Coalition – engineering from Beijing Information Science and Technology University,
Higg MSI. Available at: https://msi.higg.org/page/msi-home. and a master’s degree and doctorate in industrial engineering from
Oregon State University. Zhang’s research addresses sustainable design
Terinte, N., B. M. K. Manda, J. Taylor, K. C. Schuster, and M. K. Patel. 2014.
of product and manufacturing systems, additive manufacturing, energy
Environmental assessment of coloured fabrics and opportunities for value
planning, and life-cycle engineering. He has worked with industrial part-
creation: spin-dyeing versus conventional dyeing of modal fabrics. Journal
ners worldwide including China, Canada, and the United States. Zhang’s
of Cleaner Production 72, 127–138. Available at: https://doi.org/10.1016/j.
work has been published in peer-reviewed journals, conference proceed-
jclepro.2014.02.002.
ings, and book chapters.
Textile Infomedia. 2015. Hofmann-Maschenstoffe Gmbh. Available at:
Nicole Radziwill is quality practice lead for Intelex Technologies in
h t t p s : / / w w w. t e x t i l e i n f o m e d i a . c o m / b u s i n e s s - i n f o / H o f m a n n -
Toronto, Ontario. She is a Fellow of ASQ and is a Certified Six Sigma
Maschenstoffe-Gmbh.
Black Belt (CSSBB) and Certified Manager of Quality/Organizational
The Laundress. 2018. Modal care instructions. Available at: https://www. Excellence (CMQ/OE). She has a doctorate in quality systems from Indiana
thelaundress.com/how-to/modal.html. State University and her research focuses on Quality 4.0 and integrated
UNECE. 2017. Transparency in textile value chains in rela- management systems. She is one of ASQ’s Influential Voices and blogs at
tion to the environmental, social and human health impacts of http://qualityandinnovation.com.
www.asq.org 19
APPENDIX 1 Stakeholder information and material flows for case study

Private
Stakeholder
Identity Location Interests Metrics written on blocks chaincode Source
role
connections
Raw material Lenzing AG* Austria, Streamlined Smart contract; location of resource; B⟺C [1], [7],
extractor and “B” Europe integration; virgin vs. recycled material use; B⟺A [8], [12],
processor reduced EI chemicals used for material processing; [13]
Lenzing safe chemical use certifications;
integrated environmental and social certifications.
pulp and fiber Specifically recorded per kg
plant* • Virgin Austrian beech wood
• Pulp processing chemical disclosure
• Environmental: FSC license
code C041246 (certified audited
responsible forestry practices);
PEFC Chain of Custody Certificate
number NC-PEFC/COC-028625
(sustainable forest management).
Fiber, yarn, Lenzing AG* + Austria, Streamlined Smart contract; chemicals used [1], [2],
and spun- “B” Europe integration; during processing; safe chemical [7], [9],
dyed fabric reduced EI; use environmental certifications; [10], [11],
producer profit environmental certifications; social [14], [17],
Lenzing Modal certifications; Higg MSI score. [18]
COLOR + Specifically recorded per kg/m
• Functional: biodegradable, color
retention, enhanced breathability,
moisture management and thermal
regulation, long-lasting softness.
• Environmental: ISO 14001
(effective environmental
management system), renewable
energy used for processing, EU-Eco
Label AT/016/001 (third-party
certified Type I ISO 14024 for
environmental excellence), USDA
BioPreferred® product.
• Social: OHSA 18001 (reduce
workplace hazards and boost
employee morale), OEKO-TEX®
STANDARD 100 (consumer product
chemical safety)
• Higg MSI score: 23.
Apparel Mila Fair Tamil Nadu, Social Label QR code activation; tracing; C⟺B [1], [3],
manufacture Clothings Pvt India sustainability; smart contract; social certifications C⟺D [7]
Cut and Ltd.* economic Specifically recorded per garment unit
Sew “Lotus” “C” opportunity
• Social: certified Fairtade
leggings (Fairtrade Labelling Organizations
©2018, ASQ
International)
• Functional: add QR label
* indicates information was explicitly provided by retail brand
+
indicates information was assumed for the purposes of this case study
20 SQP VOL. 21, NO. 1/© 2018, ASQ

APPENDIX 1 Stakeholder information and material flows for case study (Continued)
Private
Stakeholder
role
connections
Distribution DHL Tamil Nadu, Profit; Smart contract; record downstream D⟺C [3], [15],
Distribute “D” India efficiency distribution locations D⟺A [16]
to Know the Specifically recorded per garment unit D ⟺ F
Origin retail • Environmental: DHL GoGreen
in U.K. Solutions Carbon Calculator in
accordance with EN 16258:2012
(EU common methodology for
calculation and declaration of GHG
emissions of transport services)
Retail Know the London, Ethical Specifically recorded per garment unit A⟺E [1], [9],
Consumer- Origin* U.K.; brick fashion; On label: A⟺B [14], [19]
facing “A” and mortar product
retail differentiation. • Athletic leggings made of 100% A⟺C
location Lenzing Modal, a bio-based fabric A⟺F
made from Austrian virgin beech
wood, assembled in India at
Fairtrade certified manufacturer.
Higg Material Sustainability Index
score: 23
• Responsible care: Hand or
machine-wash on delicate setting
in cool water. Line dry.
Generated from scanned QR code:
• Responsible disposal: Scan QR
code to find the nearest drop-
off location. This product is also
biodegradable and compostable.
• Environmental: FSC licensed raw
materials (code C041246), PEFC
Chain of Custody Certificate
(number NC-PEFC/COC-028625),
ISO 14001 fiber production,
renewable energy used for fiber
processing, X tons of GHG eq. in
shipping from India.
• Functional: biodegradable,
compostable, color retention,
enhanced breathability, moisture
management and thermal
regulation, long-lasting softness.
• Social: OHSA 18001 (Reduce
workplace hazards and boost
employee morale)
• Higg MSI score breakdown by
impact categories: 23.4
Global warming: 2.8 points
Eutrophication: 2.3 points
Water scarcity: 2.9
Abiotic resource depletion
©2018, ASQ
(use of fossil fuels): 2.7

Chemistry: 12.7
+
www.asq.org 21
APPENDIX 1 Stakeholder information and material flows for case study (Continued)
Private
Stakeholder
role
connections
Consumer German Düsseldorf, Ethical Specifically recorded per garment unit E → F +
citizen+ Germany fashion Optional product registration; optional D⟺E
“E” responsible disposal registration;
incentives from retailers and market
researchers.
Scan QR code for full product details
and responsible disposal information.
Second-hand I:Collect Ahrensburg, Closed-loop Collect garments. F⟺A [4]
textile logistics GmbH+ Germany textile SC Pull data from garment units. F←E
“F” Specifically record downstream F⟺G
distribution. F⟺H
F⟺I
Textile Hofmann- Donzdorf, Profit; Pull data from garment unit. G⟺F [5]
remanufacturer Maschenstoffe Germany quality; Specifically record downstream
Apparel GmbH+ apparel distribution and maintain
manufacturing “G” composition. legacy garment information in
for global remanufactured garments.
modern
fashion;
Design
Textile recycler SOEX Bitterfeld- Profit; Pull data from garment unit. H⟺F [6]
Recycling Wolfen, quality; No metrics written unless recycling
Germany Germany apparel garments into new yarn – then follow
GmbH+ composition. process for yarn/fiber producers.
“H”
Banks Generic Global Profit; Only specified chaincode access All (save J)
“I” anti-fraud
assurance.
Government European Brussels, Waste Request compliance reports from A, B, None
Union Belgium management; F, G, H, I
“J” GhG No metrics written
reduction;
legal
compliance
(chemicals,
water, labels)
Table sources: [10] (ISO 2015)
[1] (Know the Origin 2018a) [11] (BSI 2018)
[2] (Terinte et al. 2014) [12] (FSC and Rainforest Alliance 2017)
[3] (Mila Fair Clothings Pvt Ltd. 2018) [13] (PEFC 2018)
[4] (I:Collect GmbH 2018) [14] (Sustainable Apparel Coalition 2018a)
[5] (Textile Infomedia 2015) [15] (DHL 2018)
[6] (SOEX Recycling Germany GmbH 2018) [16] (European Committee for Standardization 2012)
[7] (Lenzing AG 2013, 28) [17] (European Commission 2017b)
©2018, ASQ
[8] (Shen and Patel 2010) [18] (OEKO-TEX 2018)

[9] (Lenzing AG 2018) [19] (The Laundress 2018)
+
22 SQP VOL. 21, NO. 1/© 2018, ASQ

APPENDIX 2 EU policies that impact the textile industry

EU Policy Description Reference
Category
Trade Quotas removed on imported textiles within WTO countries. Liberalized markets. (European
Opportunity: Free trade allows businesses to capitalize on global markets. Commission
2004; 2016b)
Challenge: Relinquishment of direct control over supply chain.
Consigned plants imported into the EU and within EU member countries—including textile
fibers and cotton—must be registered with accompanying documentation in a centralized
database called TRACES.
Opportunity: Requirement for certificate registration is an opportunity for smart contracts
and blockchain.
Challenge: Reporting requirements can be costly and obtaining upstream information from
supply chain can be difficult.
GHG Cap and trade emissions trading system first implemented in 2003 as part of EU’s energy (European
reduction policy framework. Calls for a 43 percent reduction in CO2 eq. emissions from certain industries. Commission
The textile industry is indirectly impacted by this policy through its connection to oil refining, 2003; 2005)
pulp, and bulk organic chemicals industries that are directly regulated in this directive.
Challenge or opportunity: Compliance requires capital investment and could impact raw
material prices.
Waste Textiles are classified as municipal waste in the EU. (European
Waste policy in the EU follows what is known as the waste management hierarchy— Commission
prioritizing reduction of waste, followed by preparing waste for reuse, recycling (including 2015; 2016e)
composting), recovery (for energy), and finally disposal.
The Waste Framework Directive (WFD) complies with the “Polluter pays principle” and
“Extended producer responsibility.”
A comprehensive Circular Economy Package (CEP) amending the WFD was officially adopted
on April 18, 2018, by European Parliament. The CEP aims to manage waste so as to reduce
its concomitant risks. With this plan, increased resource efficiency is expected to bring
economic benefits.
The following measures will be implemented and impact the textile industry:
• “Member States shall make use of adequate economic instruments to provide incentives
for the application of the waste hierarchy.”
• Waste Prevention: “encourage the setting up of systems promoting reuse activities,
including in particular for … textiles. …”
• By 2025, the “preparing for re-use and the recycling of municipal waste shall be
increased to a minimum of 60% by weight; By 2030, increase of the preparing for
re-use and recycling target for municipal waste to 65%; Gradual limitation of the
landfilling of municipal waste to 10% by 2030.”
Opportunity: Funding and resources available to develop closed-loop systems; industry
leadership can be a competitive advantage. Blockchain for closed-loop supply chain
management.
Challenge: Changing consumer behavior for disposing textiles.
Chemicals Registration, evaluation, authorization, and restriction of chemicals (REACH) is the EU’s (European
regulation pertaining to chemical use. Users and importers of chemicals must adhere to Commission
requirements and register all chemical products. Applies to industrial processes within 2018b)
textile supply chains. (European
In the early 2000s, the EU banned the use of a chemical, NPE, in textile manufacture within its Commission
borders. In 2015, an amendment to REACH expanded the ban to imported textiles containing 2016a; Flynn,
NPE because it poses an “unacceptable risk” as an endocrine disruptor when it runs off into 2015).
waterways. Effective January 2036, imported textiles cannot contain more than 1 ppm of NPE.
Challenge: Tracing upstream textile processing is not always possible in today’s paradigm;
penalties for noncompliance.
©2018, ASQ
Opportunity: Blockchain for supply chain management can store upstream processing
information.
www.asq.org 23
APPENDIX 2 EU policies that impact the textile industry (Continued)

EU Policy Description Reference
Category
Water In 2000, the Water Framework Directive (WFD) was adopted to protect freshwater resources (European
within the EU. Member states are responsible for monitoring and creating management Commission
plans for water basins to achieve “good status” by 2027. Substances on a “watchlist” have 2016d; European
strict restrictions on their concentration limits due to the risks they pose. Parliament 2017)
Certain persistent organic pollutants such as perfluorinated compounds and
polybrominated flame retardants on this watchlist are used as coatings and flame
retardants in textiles. Through the monitoring and management schemes established in the
WFD, human pressures on the environment will be identified to recover costs in line with
the polluter pays principle.
Challenge: Tracing upstream textile processing is not always possible in today’s paradigm;
penalties for noncompliance.
Opportunity: Proactive water stewardship can be a competitive advantage.
CSR In 2014, a directive on non-financial reporting was passed, obligating companies with Binder
Corporate more than 500 employees to produce reports “containing information relating to at least
social environmental matters, social and employee-related matters, respect for human rights,
responsibility anti-corruption and bribery matters … use of renewable and/or non-renewable energy,
(CSR) greenhouse gas emissions, water use and air pollution.”
In 2017, a Flagship Initiative was introduced to enforce mandatory due diligence in the
garment industry in accord with OECD guidelines (not yet a law, but on policy radar).
Challenge: Reporting requirements can be costly, obtaining upstream information from
supply chain can be difficult.
Opportunity: Proactive industry leadership can be a competitive advantage. Blockchain for
supply chain management can store aggregated supply chain CSR efforts.
Labels A 2011 regulation requires textiles to be labeled with their fiber composition. Does not (European
require any additional information to be included on the label (such as country of origin or Commission
care instructions). 2011;2016c)
A 2016 regulation states that all products labeled as organic (including organic cotton)
imported into the EU or traded among member states must be registered in the TRACES
database and accompanied by certificates of inspection.
Opportunity: Digital fiber composition labeling can be a competitive advantage and assist
with closed-loop efforts. Requirement for certificates, registration, and provenance tracing
are opportunities for smart contracts and blockchain.
Challenge: Mechanisms for certifying product provenance are nascent.
Data Effective May 25, 2018, new consumer data privacy laws went into effect, EU GDPR, (European
privacy/ obligating companies to proactively protect and obtain consent from individuals to collect Commission
cyber and use their data. Asserts the notion that digital data is personal property. 2017a; 2018a;
security EU Cybersecurity Strategy adopted in 2013. In addition to security from malicious cyber- Fabiano 2017)
EU GDPR attacks and fraud prevention, the EU prioritizes leadership in industrial technology
innovation e.g., cryptography and privacy by design (PbD). Security must be integrated as a
functional requirement in IoT devices throughout the life cycle.
Challenge: Dynamic and serious security threats.
Opportunity: Customers can be empowered by owning their own data and develop
©2018, ASQ
long-lasting relationships with retailers. Funding and resources available for blockchain
solutions to security issues. Decentralized information management with blockchain.
24 SQP VOL. 21, NO. 1/© 2018, ASQ

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EMERGING TECHNOLOGIES

4 SQP VOL. 21, NO. 1/© 2018, ASQ

2015). Such platforms offer businesses the opportunity

study to demonstrate implementation of the User interface,

6 SQP VOL. 21, NO. 1/© 2018, ASQ

FIGURE 2 A closed-loop life cycle of textiles.

Remanufacture Finishing and

Adapted from (Muthu 2015)

Sustainability Metrics d. Age of material or resource

Recorded on Blocks prices

Economic metrics access to network implies that a financial institution

8 SQP VOL. 21, NO. 1/© 2018, ASQ

FIGURE 3 Simplified blockchain transaction process—public permissionless ledger.

A distributed network of peers validates Decrypt

Transaction All peers receive a copy of the digital signature

10 SQP VOL. 21, NO. 1/© 2018, ASQ

FIGURE 4 Textile retailer facilitating blockchain ecosystem

Source: (Francisconi 2017)

Raw Fiber Finishing Apparel Banks

Human capital FIGURE 5 Garment label with QR code linked

12 SQP VOL. 21, NO. 1/© 2018, ASQ

GARMENT: LEGGINGS Secure Transactions on

FIGURE 7 Proposed closed-loop supply chain for exemplar garment

14 SQP VOL. 21, NO. 1/© 2018, ASQ

FIGURE 8 Simplified interorganization transaction on proposed private permissioned

Peer Peer Peer

Source: creative commons adaptation from Hyperledger 2017; Vankov 2017b

16 SQP VOL. 21, NO. 1/© 2018, ASQ

ACKNOWLEDGMENTS European Union. Available at: https://eur-lex.europa.eu/legal-content/EN/

18 SQP VOL. 21, NO. 1/© 2018, ASQ

APPENDIX 1 Stakeholder information and material flows for case study

20 SQP VOL. 21, NO. 1/© 2018, ASQ

(use of fossil fuels): 2.7

[8] (Shen and Patel 2010) [18] (OEKO-TEX 2018)

22 SQP VOL. 21, NO. 1/© 2018, ASQ

APPENDIX 2 EU policies that impact the textile industry

APPENDIX 2 EU policies that impact the textile industry (Continued)

24 SQP VOL. 21, NO. 1/© 2018, ASQ

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FIGURE 2 A closed-loop life cycle of textiles.

FIGURE 3 Simplified blockchain transaction process—public permissionless ledger.

FIGURE 4 Textile retailer facilitating blockchain ecosystem

Human capital FIGURE 5 Garment label with QR code linked

FIGURE 7 Proposed closed-loop supply chain for exemplar garment

FIGURE 8 Simplified interorganization transaction on proposed private permissioned

APPENDIX 1 Stakeholder information and material flows for case study

APPENDIX 2 EU policies that impact the textile industry

APPENDIX 2 EU policies that impact the textile industry (Continued)