For modern shoppers, they are now starting to hope that their outfit reflects their morals as well as their personal style. The dopamine rush that can be felt from a new purchase can instantly be followed by guilt due to the carbon footprint that the item likely carries. However, it could be said that the real conflict is not between style and sustainability, but between outdated systems and the future. Technology is arguably the invisible hero behind the fashion industry, and it can help it move to a place where the high environmental cost will be removed from the price tag.

How ERP Technology Cuts the Waste

When thinking of a fashion brand as a human body, the designers would be the heart and the marketing team the face, with the ERP being the brain that keeps everything from collapsing under its own weight. To simplify, an ERP is a digital hub that connects every moving part of a business, whether this is where raw materials are sourced to where the product made with this material sits on a shelf. 

The fashion industry has historically used a ‘guess and stress’ model. Brands will guess what is popular, overproduce this so that they do not risk running out, and then stress when whatever fails to sell ends up in landfill. Using a modern ERP can help to change this in several ways:

• Real-time inventory – an ERP will track each SKU, so when something sells the warehouse will know immediately.
• Predictive analytics – through analysing historical data, the ERP can predict when there will be a surge in demand, meaning that a brand can produce exactly the right amount needed.
• Waste reduction – by avoiding overproduction, this will also help to reduce the industry’s environmental impact as well as financial losses.

By using integrated technology, a brand can see delays in real-time, change logistics to lower-carbon transport routes and ensure that all of their suppliers meet ethical standards. Through automating back-end logistics, brands can ensure that the right garment reaches the right person at the right time.

Why Ethical Fashion Starts with HR

A brand cannot claim to be ‘green’ if the people making its clothes are being exploited. Sustainability has three main areas, environmental, economic and social, and if the social area is failing, then this can make the whole thing fail too. For many years, it was easy to hide labour abuses in sub-contracted factories within fashion supply chains. However, today technology can be used as a digital whistleblower, ensuring that the people behind clothing are treated correctly. 

A powerful tool for worker empowerment is the transition between untraceable cash payments to using digital payroll systems instead:

• Verifiable wages – digital transfers can create a paper trail that cannot be altered. Brands will be able to audit factory records, ensuring that workers are receiving at least the minimum legal wage and overtime pay.
• Financial inclusion – receiving pay through mobile wallets or bank accounts can mean that workers gain autonomy over their finances, making it more difficult for any ‘middlemen’ to skim off the top. Having a ‘financial identity’ allows workers to save, get credit and achieve independence .
• Transparency – using a blockchain backed payroll ensures that once a payment has been recorded, it cannot be deleted or forged to hide underpayment.
• Proof of employment – a digital pay stub can be used as more than just a receipt, as it is legal proof that allows workers to claim government benefits or labour rights that they may have been previously denied.

Modern HR technology is also helping this as it has now moved beyond just filing paperwork, becoming a platform for worker advocacy. A cloud-based HR system allows workers several things:

• Reporting grievances anonymously – workers can report safety concerns or harassment via specialised channels directly to the parent brand, bypassing any potentially corrupt local management.
• Tracking hours – digital time clocks can help to prevent forced overtime, which can be a common issue when workers are forced to meet impossible quotas.
• Certification tracking – technology platforms can track and verify factory certifications. This includes verifying that a facility’s physical infrastructure, such as its underground drainage and waste management systems, meets environmental regulations to prevent local water pollution.

Previously, ethical sourcing was a promise often only based on the occasional site visit. In the digital age, it is a continuous stream of data. This means that brands are moving from trusting that workers are being treated well to knowing that they are instead.

The Digital Thread

How these systems help in the fashion industry can be seen through following the journey of a linen shirt:

1. The journey of the shirt does not begin with a factory, but with a data point. A brand’s ERP system will analyse current trends and monitor real-time stock levels. If it notices that linen shirts are trending, it can trigger a ‘lean’ production run of a lower number based on regional demand, instead of ordering a massive amount of units and hoping for the best. This prevents overproduction and wasted materials.
2. The order will hit a certified factory. Every worker assigned to this project can scan in using their ID. The ERP will know exactly which station the shirt is at, while the HR system can track workers to ensure that the person making the shirt is not exceeding their safe number of working hours. 
3. After the shirt has completed production, the workers involved will be paid accordingly. A digital payroll system will send the exact wage over to them, notifying the brand that the labour cost was paid directly to the person responsible for the work.
4. As the shirt is boxed, it will be assigned a unique identity, such as an RFID tag. When it arrives at the store, it will be scanned into the ERP to update global inventory.

Arguably, the most stylish brands of the future are those that will use the smartest back-office systems. This is because they can help brands fully commit to being sustainable, ensuring that they are sustainable environmentally, economically and socially, meaning customers can buy their clothing without needing to feel guilt.