Sustainable Supply Network Operations: An Indonesian Textile and Apparel Perspective

Indonesian textile and apparel supply networks are customer-driven. The majority of customers reside in developed nations and have sustainability embedded within their organisational goals. In contrast, the suppliers reside in developing nations such as Indonesia. Typically, each customer organization has its own code of conduct for suppliers that includes sustainability requirements. The codes of conduct are used by customers when selecting suppliers and in monitoring the delivery of contracts. As a result, small and medium-sized enterprises in Indonesia need to improve their ability to deliver sustainability goals in customers’ codes of conduct while also maintaining the efficiency and effectiveness of their operations. The aim of this research was to improve understanding of sustainable supply network operations in the Indonesian textile and apparel industry with a view to identifying ways in which small to medium-sized enterprises in low-middle income economies such as Indonesia might comply with emerging sustainability indicators. Data gathered from multi-national and small to medium-sized enterprises provided insights on current implementations of environmental and social sustainability practices in the Indonesian textile and apparel industry. This led to the design of a questionnaire that was used to elicit stakeholder perceptions of how sustainability requirements are addressed. This was supplemented with data collected through field site observations and semi-structured face-to-face interviews that captured real-life experiences of the phenomenon of sustainability. In parallel, data was gathered from industry stakeholders (including customers, regulators, and non-governmental organizations) on drivers for and challenges of adopting sustainability practices in accordance with customers’ codes of conduct. From the fieldwork, sustainability practices, while desirable, are perceived as having a detrimental impact on performance indicators such as time and cost. Supply network maps were used to visualise the flow of materials and information through case study networks. A key characteristic identified from the maps was the industrial cluster whose agents act as interfaces between Indonesian suppliers and their ultimate customers. Early results from a social network analysis indicate that these agents are dominant actors and agents of change in critical to the adoption of sustainability practices by Indonesian suppliers.