The Fallacies in Chain-of-Custody in Sustainable Supply Chain Management: A Case Study from the Apparel Manufacturing Industry

Abstract

The apparel industry significantly contributes to climate change through its carbon emissions, excessive water usage, and waste accumulation, leading to environmental degradation and social issues such as modern slavery and poor working conditions. Amid increasing customer awareness and demands from international organizations for transparency, traceability has emerged as a critical concept, especially with advancements in technology. This study employs an interpretive case study approach, drawing early observations from a pilot project focused on traceability implementation within an apparel manufacturer and its chain-of-custody. This exploration is timely, as numerous similar initiatives are underway globally. Our research reveals that, even with the best technologies and intentions, achieving true transparency through traceability remains a challenge, often distancing stakeholders from meeting sustainability goals. Developing six (6) propositions along the way, we identify the fallacies of sustainable supply chain arising in relation to the notion of chain-of-custody. This study underscores the necessity of a collaborative approach among stakeholders to enhance traceability efforts and contribute meaningfully to sustainable practices in the apparel sector.

1. Introduction

Sustainability in the fashion and apparel industry extends beyond environmental concerns to encompass a broader perspective aligned with the United Nations Sustainable Development Goals (UNSDG). Fashion and apparel industry is one of the largest environment polluters, contributing 10% of global carbon emissions, consuming the second largest share of the world’s water resources, and accounting for a fifth of the world’s water pollution [1]. Such figures are likely to increase with the rise of ‘fast fashion’, which was valued at USD 106 billion in 2022 and is projected to grow to USD 185 billion by 2027 [2]. As natural resources become scarcer, managing water, energy, waste, and greenhouse gas emissions are essential in minimizing environmental impact and mitigating global climate change. The textile industry significantly contributes to these challenges, with greenhouse gas emissions from textile production reaching an estimated 1.2 billion tons annually, exceeding those produced by all international flights and maritime shipping combined [3]. For every five garments produced, the equivalent of three are either discarded or incinerated each year [3]. Additionally, key cotton-producing regions, including China, India, the U.S., Pakistan, Turkey, and Brazil, face severe water stress [3].

While the apparel industry generates significant employment, it is not without considerable ethical concerns. Worker exploitation persists, exacerbated by the lack of transparency within supply chains, making sustainability goals harder to achieve. Notable instances of modern slavery, particularly in cotton cultivation and harvesting in regions such as Xinjiang (China), Uzbekistan [4], and North Korea [5], have led to heightened scrutiny, prompting major retailers to adopt stricter ethical sourcing standards, such as supplier codes of conduct.

Beyond environmental and social sustainability issues, concerns over misleading sustainability claims and greenwashing have grown, as companies misrepresent their product information and environmental practices. Various certifications have been implemented to verify sustainability claims and ensure transparency. However, instances of manipulated audits and certifications have emerged, further complicating traceability efforts. In response, governments and organizations, including the UN and the EU, have introduced initiatives aimed at enforcing compliance and promoting accountability across industries.

Given the environment, social and ethical damage caused by the apparel industry, there have been recurring calls from industry bodies [6,7], customers [8], and legislative bodies [9] to minimize its impact. Consequently, various initiatives have been proposed, with substantial focus on supply chain optimization [10], transparency [11], and sustainability [12].

Despite the establishment of sustainability standards, including those tied to the UN’s SDG, achieving full transparency remains a challenge. Many companies, despite efforts to meet sustainability benchmarks, often achieve only the minimum required standards, leaving much work to be done in ensuring genuine accountability across the supply chain. A study conducted by the United Nations Economic Commission revealed that only 34% of businesses in the apparel and footwear sector have integrated traceability techniques into their supply chains, and among these, half have visibility limited to their immediate suppliers [13,14]. Academic research echoes similar concerns, illustrating that research in this area remains fragmented, and a comprehensive perspective on supply chain visibility is required. Only a handful of empirical studies have been conducted in the industry [15,16,17], and the transition from pilot projects to full-scale implementation has been slower than anticipated. Specifically, the combined use of digital and physical traceability technologies remains understudied, with most research focusing on both technological implementation and environmental, social, and ethical practices in isolation. Thus, this study seeks to address this gap by exploring how new traceability technologies could enhance transparency and accountability within apparel supply chains, contributing to broader sustainability efforts.

The apparel value chain, stretching from the production of raw materials to the final product, is vast and complex. It involves the exchange of materials, fibers, and accessories from multiple suppliers across different regions, making it difficult to track. These suppliers, varying in size, location, capacity, and processes, impact the environment and society in various ways as the product moves through the chain [18].

The primary aim of this study is to explore how technology driven traceability can enhance transparency to promote broader sustainability in fashion and apparel supply chain management. As businesses face growing pressure to ensure more sustainable and transparent supply chains, they are increasingly held accountable for the environmental, social and ethical practices of their suppliers [19]. To address this, the research employs a qualitative, interpretive case study approach, conducting interviews with experts from a well-established apparel manufacturing company involved in a pilot project implementing both digital and physical traceability trails. This case study aims to bridge the existing research gap by offering an integrated examination of digital and physical traceability systems and assessing their potential to drive sustainability practices across complex apparel supply chains.

2. Literature Review

The literature review explores the evolution and importance of sustainability and traceability in supply chain management. It covers key concepts, definitions, and the rationale behind traceability implementation, and provides an overview of traceability technologies that enable enhanced tracking and transparency in supply chains.

2.1. Sustainability in Supply Chain

The concept of sustainability dates back to the 18th century, initially emerging in forestry management as a principle to preserve natural resources [20]. Although the term “sustainability” was not used, early economic discussions recognized the importance of managing scarce resources [21]. In the context of the apparel industry, sustainability has become a topic of discussion due to its high usage of natural resources such as cotton, wool, water, and energy throughout the sourcing of raw materials, manufacturing process and the overall life cycle of the product, which result in serious environmental problems [22,23]. This concern about resource depletion in the apparel industry aligns with the broader concept of sustainability that has gained traction worldwide. The concept became globally significant with the 1987 Brundtland Report, which defined sustainable development as meeting current needs without compromising the ability of future generations to meet theirs [21,24,25]. Retailers in the apparel industry, responding to rapidly changing consumer demands, contributed to the rise of fast fashion, where the focus was on achieving lower costs and shorter lead times [26,27]. As a result, many manufacturing operations moved to developing countries [28], often leading to poor labor standards, which intensified the focus on sustainability [29,30].

John Elkington advanced the understanding of sustainability with the Triple Bottom Line (TBL) concept, encompassing environmental (planet), social (people), and economic (profit) dimensions. He defined sustainability as the equitable balance of these three areas, with none being sacrificed for another [21,31,32]. This framework influenced the UN SDGs, uniting governments, the private sector, and the public around shared goals that align with TBL principles. It emphasizes that actions in one domain affect others, underscoring the need for balanced social, economic, and environmental development [24,33].

The integration of sustainability into SCM began with the Green SCM concept, as defined by Srivastava [34], which incorporates environmental factors in product design, sourcing, production, distribution, and end-of-life management. Sustainable SCM involves managing resources, information, and finances across supply chains to ensure financial stability without harming environmental or societal conditions [24,35,36]. Stakeholders in the apparel industry have emphasized the necessity of high environmental standards and the urgency of sustainability efforts among clothing companies and retailers [37]. Building on business sustainability and SCM, Ahi and Searcy [38] defined sustainable SCM as the integration of economic, environmental, and social factors with inter-organizational systems. This approach aims to manage materials, information, and capital flows to meet stakeholder expectations and improve financial health, market position, and long-term resilience. However, while much research in SCM has largely focused on social and environmental aspects, there has been limited attention to the integration of all three sustainability dimensions [36].

In business contexts, economic performance often dominates sustainability efforts. However, the UN stresses the need for balance among sustainability pillars. To support this, the Environmental, Social, and Governance (ESG) framework was introduced by the UN Global Compact and financial institutions in 2004, guiding investments with environmental, social, and governance criteria [39,40,41]. Furthermore, the European Commission released its EU strategy to enhance sustainability and circularity through the Digital Product Passport, prioritizing the apparel industry due to its significant production, consumption, and environmental and social impacts. Scheduled for implementation between 2026 and 2030, the passport compiles information on product components, materials, chemical compounds, repairability, replacement parts, and disposal methods, serving as a key initiative in the transition to a circular economy [42]. Thus, improving traceability and transparency is a key priority in enhancing supply chain sustainability [43].

2.2. Traceability in Supply Chain

Traceability originated in 1930 to verify the origin of French champagne [13] and has since become a critical element in supply chain management across various industries, including apparel, where it has been integrated with quality management philosophies like Total Quality Management (TQM) and Just-in-Time (JIT) [24,44,45,46,47]. It was internationally standardized by ISO 9000 [48], which defines it as the capability to track the application, origin, or whereabouts of a product from its material sourcing and manufacturing through to its distribution and post-delivery location [24,49].

Food industry scandals in the 1990s highlighted traceability’s role in health and safety, leading to regulations like the EU’s General Food Law [49,50,51]. Recent high-profile incidents related to modern slavery, particularly concerning cotton sourced from regions such as Xinjiang, Uzbekistan, and North Korea, have reinforced the need for traceability and transparency, particularly ensuring social sustainability in the apparel industry [52]. The apparel industry, in particular, faces considerable challenges due to its highly fragmented global supply chain, with numerous suppliers distributed across various geographic location [26,36,53,54,55], which results in a significant lack of transparency [56,57,58].

The UN Global Compact updated traceability standards to verify sustainability claims, covering aspects like human rights, employee welfare, environmental impact, and anti-corruption measures [13], which are often exploited in the apparel industry due to the lack of traceability and transparency. Moe [44] defined traceability as tracking product batches through production stages, with emphasized tracking materials from farm origin across the supply chain [59]. Tavernier [60] described it as documenting products from producers to consumers [49]. Regattieri [61] and Van Rijswijk and Frewer [62] highlighted the importance of tracking product history, properties, and ingredients through various processing stages [49,59]. Skilton and Robinson [63] emphasized the verification of components across production processes [49], while Olsen and Borit [50] and Bosona and Gebresenbet [64] highlighted traceability’s role in ensuring safety and quality throughout the supply chain. Garcia-Torres, Albareda, Rey-Garcia, and Seuring [24], consolidated these views into “Traceability for Sustainability” (TfS), highlighting enhanced visibility and accuracy in validating sustainability. Despite its benefits, such as regulatory compliance, maintaining product standards, and minimizing recalls, traceability remains a complex and costly strategy for achieving long-term sustainability in the apparel industry [11,65,66].

2.2.1. Chain-of-Custody and Traceability

Chain-of-custody (CoC) is a core element of traceability in SCM. The term CoC originated in law enforcement, where the United States National Institute of Justice defines it as a method employed to preserve and record the sequential history of the evidence to authenticate it [67,68]. In forensic investigations, CoC is vital since evidence tampering can hinder an investigation [69].

Traceability incorporates CoC documentation, and gained prominence in the 2000s, especially in the pharmaceutical industry. It is also vital in highly regulated sectors [70]. In the gem and jewelry industries, CoC helps verify a products origins and ethical sourcing through documentation, with technology offering a secure way to trace product lineage [71]. The forestry industry also follows CoC standards, tracking wood ownership throughout the supply chain [72]. Similarly, in the apparel industry, leading firms have increasingly disclosed their suppliers. Since approximately 45% of the industry uses cotton, voluntary labeling initiatives such as Fairtrade and the Better Cotton Initiative have introduced tracking tools for organic cotton, supplier names, and labor practices [73].

However, the diversity of fibers used in production, combined with human error and manipulation, presents challenges. Achieving CoC certification requires coordinated efforts from all supply chain members to ensure that products and services meet their consumer expectations and regulatory requirements [74].

2.2.2. Transparency and Accountability

Traceability extends beyond simply tracking the CoC of products; it plays a key role in enhancing transparency and accountability across supply chains. As noted by Tolentino-Zondervan and DiVito [75], traceability not only improves transparency but also fosters accountability and predictability, especially in industries like textile and apparel. A key area where traceability is essential is material waste management, which has significant environmental implications. For instance, around 70% of a garment’s useful life remains when it is discarded [75,76,77,78], and establishing traceability systems to identify both pre- and post-consumer waste is critical for the transition to a circular economy. These systems hold stakeholders accountable, particularly in regions where overproduced apparel ends up in landfills, such as parts of Africa and Asia [79].

Traceability enables provenance tracking, a concept traditionally applied in the art world to verify an artwork’s authenticity and origin, and in supply chains it documents the ownership, transactions, and activities of raw materials and finished goods [80,81]. This documentation ensures the verification of all material inputs and processes, covering procurement, manufacturing, packaging, warehousing, inventory management, transportation, and customer relationship management. Provenance of information is crucial in both biological and digital contexts with advancing technology [80,82,83].

In addition, traceability promotes accountability by facilitating audits, supporting social and environmental audits of suppliers to mitigate supply chain risks [84]. While traditional auditing methods, like inspections and site visits, are often conducted by external auditors [85], they face challenges such as inconsistent interpretations and potential dishonesty, leading to criticism of transparency in audits [86,87,88,89,90]. Recent studies highlight technology’s role in enhancing audit integrity, particularly through blockchain, which enables immutable records [91,92]. This technological advancement is expected to promote real-time auditing and improve accountability in supply chains [93,94,95].

Furthermore, traceability is crucial for risk management in highly regulated industries, helping to boost security and mitigate the risk associated with product safety [96]. According to Schuitemaker and Xu [97], organizations in the food, medical, electronics, and automotive industries leverage traceability for effective product life cycle management and risk management. Advanced traceability systems have also been implemented in industries such as military weapons manufacturing [98], consumer electronics [99], and fashion retailing [100], to detect and analyze counterfeit risk. Employing traceability technologies to identify the source of contaminated products and remove them from a circulation acts as a mechanism to prevent product failure and critical defects [101]. Trust through visibility is another key benefit of traceability, as scholars identify it as a key driver for effective tracking [11,24]. Transparency fosters trust by enabling accurate data sharing, benefiting all parties involved [102,103], especially in regulated sectors like food and pharmaceuticals, where safety is paramount. Transparency is generally categorized in two domains: disclosing accurate information to foster trust and examining its influence on behaviors and decisions [80,104,105].

2.3. Traceability Systems

Supply chains depend heavily on collaboration among all stakeholders due to their interconnectedness and interdependence. It is crucial to maintain accurate records and document the product and its processes at every stage of the CoC, ensuring meticulous upkeep in accessible formats. Therefore, a reliable traceability system is of utmost importance [106]. A traceability system is defined as a comprehensive set of data and processes that maintains essential information about a product and its components throughout its entire production and usage cycle [107]. Regattieri [61] outlines a framework that identifies four essential pillars for a food product traceability system: product identification, traceable data, product routing, and traceability tools.

Qian et al. [108] categorize the evolution of traceability systems into three distinct stages. The first stage, TS 1.0 (1980–2007), utilized paper and electronic records to meet food traceability regulations. The second stage, TS 2.0 (2008–2015), saw the advent of the Internet of Things (IoT), facilitating electronic integration and real-time information sharing across the supply chain. The third stage, TS 3.0 (beginning in 2016), incorporates artificial intelligence (AI) to enhance system capabilities and support intelligent decision-making.

2.3.1. Traceability Technologies

In the fashion and apparel industry, traceability technologies are widely recognized for their crucial role in enhancing supply chain transparency and promoting sustainability [109]. Scholars have explored traceability technologies to some extent. Oskarsdottir and Oddsson [110] categorize traceability tools as static, such as barcodes and paper records, and dynamic such as Radio Frequency Identification (RFID) and Wireless Sensor Networks (WSNs). In their study, McGrath et al. [111] found that companies use a range of technologies for managing supplier sustainability data, including data analytics, Enterprise Resource Planning (ERP) systems, third-party tools, and spreadsheets, while blockchain, Internet of Things (IoT), and RFID are used less frequently [112,113,114]. Mehannaoui et al. [115] further classify technologies into identification, monitoring, and communication technologies and data management technologies.

Identification, monitoring, and communication technologies including barcodes, RFID, DNA barcoding, Near Field Communication (NFC) biosensors, IoT sensors, and WSNs, enhance traceability by recording and tracking product data [115]. Barcodes, including QR codes, are popular for providing product information access via smartphones, aiding transparency [111,116,117,118,119]. RFID tags, categorized as passive, active, or semi-passive, enable wireless data transmission through radio signals [120]. DNA barcoding helps authenticate raw materials in the food sector [121,122,123]. WSNs provide secure communication, although high energy use remains a drawback [124,125].

Data management technologies support storage, integration, and sharing in traceability systems, with cloud computing enabling data analysis and sharing through public, private, and hybrid models [115,125,126,127]. Big Data, enhanced by IoT and real-time data, helps ensure product authenticity [115,128]. Blockchain, known for its immutability and security, holds potential for supply chain transparency [129], however scalability and privacy remain challenges [130,131,132]. While blockchain is considered a possible solution in the apparel and clothing industry, and numerous studies have been conducted around this technology [112], it is also emphasized that the technology is still in its infancy [113,114,133].

2.3.2. Traceability Technology Implementation

The requirements and advancements of traceability systems vary by industry and sector; for example, a toy supplier might implement a basic traceability system using shipment codes to track products, while a medical supplier could employ an advanced system to monitor individual instruments throughout their lifecycle, ensuring proper recycling or disposal through reverse logistics [97]. In traditional linear business models, particularly in the apparel industry, traceability often diminishes beyond the purchase point, making it challenging or nearly impossible to track a garment’s lifecycle or subsequent journey after it reaches the consumer [134]. Although traceability systems are expected to be implemented by all firms due to their potential benefit, the high cost of deployment means that not all enterprises benefit equally. For instance, it is believed that medium-sized businesses optimize their expenses, while small businesses may face cost disadvantages and large businesses may encounter economies of scale [135].

Due to the unique characteristics of the apparel supply chain, its traceability requirements must be industry-specific, and off-the-shelf solutions available in the market may not always be applicable [136]. The inherent complexity and opacity of the supply chain stem from various factors [13,134], including the multi-tiered stakeholder structure, the complexity and variety of raw materials and processes in operations, the geographical dispersion of stakeholders and operations [137], subcontracting, the prevalence of informal work, and the fast-paced of the supply chain [134], which together present significant challenges in implementing traceability technology. For a single product, a various bill of materials (BOM) exist, and even for a single material, there are multiple suppliers, each facing unique challenges [138]. This is evident from a recent study revealing that companies in the apparel are still assessing traceability’s potential and have not progressed to actual implementation [114].

3. Research Approach and the Case Study

The case study methodology provides a comprehensive examination of the implementation of traceability and its contribution to sustainability within the organization [139]. Therefore, an interpretive case study research approach, in line with Walsham’s guidelines, was adopted to address the research question and the exploratory nature of the study [140,141,142]. In this research, the unit of analysis is an organization that has implemented a traceability initiative with a clear focus on sustainability. A single-case study approach was chosen to present a revelatory case [143] by selecting a manufacturer in the apparel industry that has not only implemented a traceability system but also demonstrates a strong commitment to sustainability. This manufacturer has a dedicated team, including a supply chain manager, an information officer, and other key personnel, to oversee and execute the operations.

3.1. Case Study

The apparel industry was selected due to its significant environmental and social impact, making it a critical area for sustainability improvements. Furthermore, this study does not limit its focus to a specific geographic region, as the manufacturer operates within a diverse global supply chain, with suppliers and operations spanning multiple countries. With the rise in consumer demand and scandals related to modern slavery in cotton production, along with the manufacturer’s internal strategy to align with UNSDG, the need for a robust traceability system beyond the organization became apparent.

The investigation was based on a pilot traceability project conducted in collaboration with a leading multinational apparel manufacturer headquartered in South Asia, with manufacturing operations in both South Asia and Africa, and a technology provider specializing in cotton farming based in Oceania. The apparel manufacturer employs over 14,000 people and has a global presence across nine countries, including ten facilities in South Asia and Africa. The company caters to multiple global customers in the UK, Europe, and the USA, providing expertise in design, sourcing, manufacturing, marketing, and distribution of high-quality, responsible products. As part of its strategic priorities, the company aims to contribute to allowing carbon economy by implementing its ESG strategy and complying with the UNSDG. In line with its sustainability and supply chain strategy, the company prioritizes responsible and sustainable sourcing through technology and innovation to trace the origin and journey of its products. The company’s supply chain team was tasked with identifying an appropriate solution to address traceability challenges. After evaluating and trialing various available options, the team selected a technology provider with a strong track record in the cotton industry.

The technology behind the pilot project is sophisticated and effectively addresses the traceability objectives. The pilot project spanned 180 days and focused on a crew-neck T-shirt, chosen due to its high production volume and the fact that it is 100% cotton, making it suitable for the initiative’s first phase. The goal was to achieve full traceability by tracking on fabric, the primary component of a garment. A total of 50 T-shirts were produced for the pilot. The traceability system extended up to Tier 5 of their suppliers, reaching the cotton farmers. Figure 1 depicts the scope of the pilot traceability project and illustrates the supply chain tiers, resonating with the literature on the complexity of apparel supply chain. The pilot included suppliers who were already using this technology. Data collection for this study was conducted upon the completion of the pilot project.

The piloted traceability technology combined both digital and physical tracking, valued for its ability to reduce greenwashing and address sustainability scandals by verifying the chain-of-custody. This system utilizes a patented pigment applied during cotton harvesting, which serves as an identification marker that is physically embedded in the cotton and digitally detected and monitored. At each stage of processing, a scanner identifies the pigment, emitting a signal light to confirm its presence. This pigment was initially applied at the farmer level. After harvesting (T5), the cotton was sent to the ginner (T4) for cleaning, both stages occurring in Oceania. The cleaned cotton was then shipped to a spinner (T3), followed by knitting (T2), both in Southeast Asia, to create the fabric, which was then prepared for apparel manufacturing (T1) in South Asia. After production, the garments were typically shipped to buyers in the US or Europe: however, this final stage was not part of the pilot.

All tracking data were securely stored and managed on blockchain, granting back-end access to authorized personnel and offering visibility to all supply chain partners. At the consumer level, each finished garment includes a QR code that, when scanned, provides customers with details about the product, such as its manufacturer, production location, and timeline. These records were immutable, protecting against tampering and ensuring that the product and its chain-of-custody could be verified both physically and digitally, a critical feature for audits.

The apparel manufacturer had internal traceability systems in place, using technologies such as SAP HANA as the main ERP system, barcodes, and Radio-Frequency-ID (RFID) to track both product components and finished goods. Additionally, they utilized facial recognition technologies for attendance tracking and access control, geofencing technology to monitor container movement in logistics, and data analytics tools to optimize operations and decision-making. Furthermore, various supply chain vendors operated independent systems, including spreadsheets, different ERP systems, and barcode systems that were not interconnected with the manufacturer’s supply chain but functioned in isolation for their internal traceability needs. These technologies primarily support internal operations, while the challenge remained in tracking and tracing external suppliers across multiple tiers.

The pilot traceability project aligned with UNSDG 8, 9, 12, 13, and 17 by promoting fair labor, innovation, responsible production, climate action, and global partnerships. Its integrated tracking system, combining physical and digital technologies with blockchain, enhanced supply chain transparency and sustainability. This approach not only supported the achievement of UN SDGs but also aligned with the EU’s Digital Product Passport initiative by providing comprehensive, verifiable product information throughout the lifecycle. It served as a foundational step toward circular economy practices, where traceability is essential.

3.2. Data Collection and Analysis

Data were collected from five experts in an apparel manufacturing company who participated in a traceability implementation pilot conducted between March 2022 and September 2022. Although interviews with five participants may be considered a comparatively small sample, they were selected based on their expertise and involvement in the pilot traceability project. This selection ensured a profound understanding of the context despite the small sample size (

Table 1. Details of interviewees.

Code	Designation	Experience in the Industry (Years)
P1	Director Supply Chain	17
P2	Manager—Raw Material Innovation	12
P3	General Manager Logistics	19
P4	Category Manager Raw Materials	12
P5	Chief Operating Officer	24

).

Data saturation was reached during the interview process, as repetitive insights began emerging by the fourth interview, indicating that sufficient data had been captured to address the research questions [144]. The iterative coding process during analysis further confirmed this, ensuring the findings accurately represented the experts’ perspectives.

In addition to the expert interviews, data was collected through the system interfaces used by both the apparel manufacturer and the consumer-facing interface, accessed by scanning the QR code. This provided real-time verification of product movement, including its origin, journey, destination, and chain-of-custody, serving as the primary data source. Consequently, the data facilitated tracking product flows along the supply chain and enabled assessment of the traceability system’s effectiveness and scope.

To triangulate data, validate findings, and enhance analytical reliability, secondary data were obtained from the company’s website, presentations, and internal documents.

For case study selection, purposive sampling was employed, considering factors such as the experts’ experience level, availability, and hierarchical position within the organization. However, due to the limited industry evidence, purposive sampling alone was deemed insufficient. Therefore, snowball sampling was also utilized, with initial participants asked whether they knew of or could recommend any additional individuals within or outside to identify additional experts within or outside the organization who were involved in traceability system adoption in supply chains [145,146]. Although the sample gathered through snowball sampling may not fully represent the total population, this approach enabled connection with experts possessing specialized knowledge, facilitating a more thorough exploration of key perspectives and experiences [147]. Thus, this study posits that employing both sample strategies uncovered nuanced details regarding traceability technology implementation that may not have been discovered through purposive sampling alone, thereby enriching the data collection process [146].

Interviews were conducted virtually, with each session lasting between 60 and 90 min. A semi-structured interview guide was prepared in advance and shared with participants, and detailed notes were taken after each interview. The interviews were recorded with the consent and approval of the participants, in compliance with human research ethics guidelines. After each interview, the audio recordings were transcribed, and the data were organized, analyzed, and synthesized using NVivo software version 15 [148].

3.3. Interpretive Method of Case Analysis

The data were analyzed as they were collected to leverage on the flexibility of the case research approach [149]. The interpretive case study methodology was adopted as it allowed in-depth insights into complex organizational and social phenomena such as traceability implementation and its challenges in the apparel industry. The case study method facilitated the exploratory nature of the study [150], with the phenomenon observed through the experiences shared by key stakeholders and users who interacted firsthand with the traceability technology [151]. Thus, the study employed an interpretive approach to case analysis, utilizing thematic analysis to examine the collected data [141,151].

Following the phases of thematic analysis outlined by Braun and Clarke [152], the process began with a thorough familiarization with the data, which included transcripts from interviews and secondary sources like documents, reports, and presentations provided by the organization. Familiarization required reading the transcripts multiple times to identify key concepts and patterns pertinent to the research question. Initial codes were generated inductively, concentrating on key concepts and patterns related to the implementation of traceability in the apparel supply chain. Open coding was carried out using NVivo software, generating 83 initial codes covering topics such as supply chain management, technological capacity, implementation issues, and pilot project outcomes. A sample of these codes is available in Appendix A (Figure A1). These codes were iteratively refined and grouped into potential themes, which were then reviewed and defined to ensure they accurately reflected the data and addressed the research question [149,153].

Themes were developed by iteratively refining and grouping the codes into axial codes using the grounded theory methodology. For example, the open code ‘reluctance to share information’ was categorized under the axial code ‘stalemate in traceability transformation’, illustrating the relationship between specific challenges and broader themes. Finally, the selective coding process established derived a meaningful classification, outlining the relationship between the axial codes. Throughout the analysis, the researchers engaged in constant comparison between the emerging themes, the raw data, and the existing literature to ensure that the interpretations were rooted in both empirical evidence and the literature [154]. The themes were synthesized to develop the six propositions presented in the findings. This iterative process of coding, theme development, and interpretation allowed for a nuanced understanding of the complexities surrounding traceability implementation in the apparel industry [155,156].

The thematic analysis facilitated in-depth within-case analysis, allowing patterns to emerge and providing a deeper understanding of the data [157]. Utilizing multiple data sources enabled triangulation, enhancing the credibility and trustworthiness of the findings [158]. Triangulation was achieved by comparing and contrasting data from interviews, secondary sources such as documents and presentations, and information from the pilot platform to identify similarities and differences, further enhancing the rigor of the analysis. Credibility was reinforced through member checking, in which the findings were confirmed with the participants [159].

4. Findings: Issues of Traceability

The study’s findings emerged through careful observation during data collection and analysis. With traceability implementation still in its early stages, where pilot programs are ongoing and industry knowledge remains limited, the study adopts an inductive approach to explore why full-scale adoption of traceability technology has been slow, despite advancements in technology [145,160].

4.1. The Incomplete “Single Source” of Truth

Enabling traceability in already complex and diverse supply chains due to cross-border trades and multi-tiered supply chain partners in the apparel sector, as depicted in Figure 1, presents challenges, as information is often scattered across different platforms and formats. For example, as highlighted by P1, producing a T-shirt involves suppliers at various tiers, who may not be located near the manufacturer or retailer. Additionally, these suppliers may use different technologies, formats, and systems to provide information, ranging from manual methods to sophisticated systems, depending on their economic capacities, technology adoption and the other factors. Inaccuracies persist as a result. Platforming (or platformatization) supply chains using traceability technologies allow multiple actors to contribute to a unified system that leverages collective intelligence. Stakeholders can then extract accurate data from this system and have live visibility. A stringent, multi-layered validation process is necessary to verify and authenticate the data and the process flow, reducing errors and preventing any malicious human alterations. P1 noted that:

“When we receive an order from our customer, let’s say to make a T-shirt, we act as their Tier 1 supplier (apparel manufacturer), the fabric supplier is Tier 2, knitting is Tier 3, yarn is Tier 4, and the cotton farmer is Tier 5—this is for a simple cotton T-shirt. The tiers can vary with more complex products. The cotton farmer might upload details manually in an Excel sheet, the yarn supplier might use emails and PDFs to communicate these details, while we use an SAP ERP system. As you can see, there are different platforms and systems, and data can be altered, intentionally or unintentionally”.

P4 provided an example of how a seemingly simple item, like a T-shirt, can involve significant complexity among the same vendor partners:

“As we handle the entire customer consignment for the purchase order, complexities arise due to inconsistencies, like the lack of a single batch of cotton. Within the same order, challenges arise when working with the same fabric supplier, who uses different dyes and chemicals based on the fabric color”.

Blockchain is considered a potential solution, with its characteristics of immutability and decentralized, tamper-proof ledgers, offering value by ensuring product authenticity, sustainability, and compliance. The crowdsourced nature of some innovative traceability technologies, combined with multi-layered validation, ensures the reliability and validity of information, thus establishing a single source of truth in the realm of sustainability and compliance. P2 emphasized that:

“With this blockchain platform, we can trace and track the chain-of-custody, ensuring data integrity and preventing manipulation which is crucial for compliance. This capability enables us to scale effectively and gain acceptance from all stakeholders in the supply chain, adding greater validity to the entire process flow”.

Thus, the following proposition is proposed:

Proposition 1. 

A unified traceability platform creates a single source of truth, ensuring data accuracy, compliance, and increasing transparency of the chain-of-custody within its supply chain.

To further investigate proposition 1, a researcher could employ the organizational information processing theory (OIPT) to provide theoretical cohesion for the creation of the single source of truth. The theory views organizations as open social systems designed to carry out business strategies by reducing ambiguity in the decision-making process [161,162]. The theory identifies three main components: information processing need, information processing capability, and the alignment between capabilities and needs [162,163]. To maintain this alignment, OIPT suggests that organizations can either reduce information processing needs by creating slack resources or self-contained tasks, or increase information processing capacity through lateral relationships and vertical information systems [164,165]. In a multi-tiered supply chain, achieving a single source of truth is challenging due to the range of systems, formats, and technologies used across different stakeholders, as well as the nature of the raw materials in apparel and their value addition methods. Therefore, OIPT can serve as a theoretical lens to guide the design of a system capable of handling complex, fragmented data inflows and outflows, consolidating it into one trusted platform to achieve a single source of truth in traceability and sustainability.

4.2. The Double-Edged Sword of Traceability

Traceability and transparency are crucial for ensuring ethical production in the apparel supply chain, which is essential for achieving overall sustainability. The availability and visibility of information are made possible through traceability technologies. Providing such detailed information about material sourcing and production processes helps meet ethical standards and strengthens consumer trust. However, sharing supply chain details can also risk exposing supplier relationships and strategic innovations, which often serve as a company’s competitive advantage. This creates a dilemma when dealing with external stakeholders. On the one hand, customers are more likely to trust a fully transparent product, but on the other hand, suppliers within the supply chain may have reservations. Trusting the traceability process that could potentially expose sensitive information may be viewed as a threat to the protection of trade secrets. This concern was evident in the responses, as highlighted by P5:

“In the industry we operate in, margins are extremely tight. We differentiate our products by investing in unique sourcing strategies, partnerships with exclusive suppliers, and innovative production techniques. However, having just one supplier in the supply chain being transparent and agreeing to traceability is not enough—it has to be a collective effort. Still, there is hesitancy when it comes to disclosing certain information”.

At the same time, while customers appreciate being informed about the sustainability aspects of a product or brand, it raises the question of whether they are truly ready to absorb all the intricate details of a brand’s sourcing and production processes. Are they equipped to interpret the complexities of supply chain data? This risk of overexposure could create confusion, skepticism, or even backlash if certain elements of the supply chain do not meet consumers’ expectations in reality. Hence, this paper suggests:

Proposition 2. 

Balancing consumer trust through traceability and transparency, while safeguarding competitive advantage is essential for achieving economic, social, and environmental sustainability.

For deeper insights of proposition 2, paradox theory could be employed. The theory posits contradictory yet related elements that coexist and endure over time will offer a useful framework to understand this tension in balancing transparency with competitive advantage, two competing objectives that are necessary yet mutually exclusive [166]. This approach helps examine how social, environmental, and economic sustainability create tensions within each criterion. Organizations should view these paradoxes as an ongoing, adaptive challenge to strike a balance, rather than trying to eliminate the tension, in order to sustain both ethical integrity and competitive differentiation.

4.3. Augmenting Traceability

In an industry characterized by complexity, global supply chains, counterfeit products, risks of misinformation, and ethical violations, the concept of ‘augmenting traceability’ ensures that every link in the chain-of-custody—from raw materials to finished garment delivery—is visible and verifiable. A system built on ‘multiple layers of truth’ allows for independent data validation at each stage of the supply chain, minimizing errors and preventing misconduct.

As highlighted by P4, barcodes and QR codes are currently the most commonly used traceability technologies, primarily for internal tracking. RFID is the next most widely used method for tracing the final garment. However, these technologies are not interconnected. Expanding current systems with blockchain would enable apparel manufacturers to provide a digital audit trail that verifies and validates the provenance of materials, the processes they undergo, and their compliance with environmental and social standards, extending the traceability externally to connect the entire chain-of-custody. P1 further emphasized this by explaining a pilot project that embedded luminous pigment into raw materials, supported by a patent technology provider. This step created a physical audit trail, which is crucial for integrating both the physical and digital traceability of a product, harnessing the latest advancements in science and technology. P3 emphasized the importance of this development:

“When the Xinjiang cotton issue surfaced, where modern slavery was a concern, our retailers asked us to stop using any cotton sourced from that region. However, there were instances where cotton labeled as coming from other origins was actually a blend of Xinjiang cotton with other sources. It was mislabeled and sent. This highlighted the need for physical traceability, not just digital, to address such issues. As a result, we embarked on a pilot project with the help of a technology provider specialized in cotton traceability”.

Accounting for the findings, this paper suggests:

Proposition 3. 

The integration of digital and physical traceability systems enhances transparency and sustainability in supply chains by enabling independent data validation and minimizing the risks of misinformation and ethical violations.

Augmenting traceability with multiple layers of truth underscores the necessity to improve the capacity for processing and validating information throughout the supply chain. In this context, similar to the earlier finding (Section 4.1), OIPT could serve as a useful theoretical lens, highlighting the significance of both digital and physical traceability in enabling independent data validation. This alignment helps meet the information processing needs and capabilities, thereby reducing ambiguity and promoting ethical practices.

4.4. Selective Transparency

The traceability narrative has often taken a ‘selective’ approach, where positive aspects are emphasized while problematic areas are overlooked. Greenwashing has become a marketing tool through which organizations claim their products possess sustainable and environmentally friendly attributes while ignoring the underlying realities. For example, marketing tags may promote a product as being made from organic cotton, but they fail to address other sustainability concerns, such as how the soil is treated, how the cotton is harvested, how workers involved in the process are treated, or the environmental damage caused by harmful practices. As highlighted by P4:

“Greenwashing has become a common marketing tactic, with companies proudly showcasing their sustainability claims while often sidestepping the real consequences of their practices. To truly understand the impact, we need to dig deeper and follow the entire chain-of-custody”.

P3 further emphasized that transparency alone does not guarantee sustainability, illustrating this point with an example:

“An apparel manufacturer and its vendors might invest in a supply chain park within close proximity to reduce the carbon footprint across the end-to-end value chain but choose not to share traceability details or sign onto the project due to added costs. Meanwhile, another apparel manufacturer with a widely dispersed, cross-border supply chain might openly share details about their partners to display transparency, even though their operations could generate double the pollution”.

While sustainability might be monitored at Tier 1 and Tier 2 of the supply chain, achieving full transparency beyond Tier 2 remains a significant challenge. Traceability is therefore still ‘scattered’, with much progress needed to ensure comprehensive accountability across the entire supply chain. Currently, traceability systems tend to mold information based on the manufacturer’s requirements, as they consolidate almost all activities on behalf of the retailer before the product reaches both the retailer and the end customer. Accordingly, the following proposition is suggested:

Proposition 4. 

The selective narrative in traceability practices undermines true sustainability efforts by promoting misleading information, which hinders informed consumer decision-making.

The scattered and isolated nature of traceability information can be examined from the perspective of signaling theory, where the two parties involved, the signaler and the receiver, experience information asymmetry [167]. In this context, the signalers represent a collection of actors within the supply chain, while the receiver is the customer. The signals sent by the various supply chain actors often serve as marketing signals that inform the customer’s decision-making process. When systems are designed from a one-sided view of the manufacturer, they may convey misleading signals. Therefore, traceability systems must be designed in a credible and verifiable manner to ensure accurate signaling.

4.5. Skewed Transparency

While traceability is promoted as a tool for enhancing transparency and sustainability, the current reality is that it primarily focuses on the main component of the garment, such as natural fibers like cotton, or artificial and synthetic fibers. However, there are many other components in a garment, such as thread, elastic, buttons, zippers, and various accessories and trims, whose transparency is often overlooked. Although these smaller items may represent a small percentage compared to the fabric, they still play a crucial role in the garment’s overall composition.

However, the case witnessed a myopic view of the SC that was selected yielding an ‘intellectually dishonest’, ‘skewed’ view of transparency on selective items, leading to a ‘skewed’ or biased understanding of the facts. P1 explains how, as a manufacturing company in the apparel industry, they plan to address this complexity:

“To effectively tackle this, we’re adopting a phased approach that begins with a focus on fabrics. This strategy allows us to learn and build strong connections with our supply partners. Once we have a solid foundation, we’ll expand to include accessories and other materials. We’re still working on establishing specific timelines for this rollout”.

Traceability systems are often designed to track components that are easier to trace, such as those marketed with tags like organic cotton or recycled polyester. While the smaller components are essential to a finished garment, they may have an equal or even greater environmental and social impact compared to the larger, more easily traceable components. Additionally, many certifications also focus primarily on the main component of an apparel item, potentially misleading regulators and sustainability advocates. Therefore, this study proposes:

Proposition 5. 

Skewed transparency practices obscure the true environmental and ethical impacts of the supply chain and its chain-of-custody.

The scope of traceability needs to be expanded. Although technologies like blockchain have been adopted in the apparel industry, as evidenced by numerous pilot projects, these solutions must extend beyond fabric to include smaller components in order to close the transparency gap. Limited processing capability may be one reason organizations prioritize certain components [161,162]. This can be addressed through OIPT. Additionally, signaling theory can help examine how skewed transparency affects customer perceptions and ultimately hinders progress in sustainability [167]. Therefore, a combination of OIPT and signaling theory provides a useful lens for building the theoretical foundation.

4.6. Stalemate in Traceability Transformation

Supply chains in the apparel industry are highly decentralized, involving multiple vendors, suppliers, and manufacturers contributing to various stages of production. However, these actors often lack proper integration, which is further exacerbated by the use of outdated and siloed ERP systems to manage different aspects of production, from material procurement to delivery. These fragmented systems fail to provide real-time visibility and interoperability, resulting in delays, miscommunication, and increased operational costs. Despite the push for traceability and transparency, implementing traceability incurs additional costs to the final product. Collaboration among supply chain actors to share these costs is minimal, with no party willing to take the initiative. Additionally, as many advanced traceability technologies are still in their infancy, there is hesitation to adopt them, even discouraging more risk-taking companies. Moreover, the question of whether existing systems can support the integration of new technologies, and if these technologies are ready to scale to address the complexities of the apparel supply chain, is a broader discussion that needs to be addressed. As highlighted by P5:

“Many advanced traceability technologies are still emerging, which creates some hesitation in adopting them. We really need to assess if our current systems can integrate these innovations and if they’re ready to scale with the complexities of the apparel industry. While there’s a strong push for traceability and transparency, implementing these systems often raises costs for everyone involved. Partners may be reluctant to commit because embracing new platforms requires investment in resources, energy, and effort, which can be daunting during such a transformative journey”. Based on this pilot findings, the company faces limitations in achieving its goal of having a unified, transparent and traceable platform, as well as the need for collaborative effort and the alignment.

To understand the challenges faced by the apparel supply chain in transforming traceability systems, the integration of existing technologies and the adoption or rejection of new technologies can be examined through the lens of diffusion of innovation theory. Innovation and technology are often used interchangeably in this regard [168], with variables such as relative advantage, complexity, compatibility, trialability, and observability influencing the rate of adoption [169] in the context of full-scale traceability implementation. Therefore, this paper suggests:

Proposition 6. 

A lack of collective initiative among supply chain actors leads to significant delays in the transformation and adoption of traceability technologies.

5. Conclusions, Implication and Limitations

The study employs a case study method to provide a comprehensive analysis of traceability issues within the supply chain, revealing the complexity of achieving true transparency and highlighting the importance of integrating advanced technologies. The findings, summarized in Figure 2, which are inspired by the OIPT, paradox theory, signaling theory, and the diffusion of innovation theory, depict a process from technology investment to outcomes, arranged to broadly reflect the system lifecycle phases of selection, implementation, technological outcomes, and organizational outcomes. This framework offers academics and practitioners an accessible way to build a cumulative research tradition. The framework must be developed together with the six (6) propositions derived using the case study findings.

In the first phase of technology selection, companies make “good-faith” investments in traceability technology, aiming to establish an accurate chain-of-custody. The cases highlight that rising customer demands, industry standards, and evolving local and international regulations drive ongoing investments in traceability technologies.

However, during the technology implementation phase, complexities arise due to the hierarchical nature of supply chains. This leads to “selective transparency”, where only certain aspects of the chain that offer a positive impression are emphasized. Similarly, the complexity of assembling components within a BoM leads to “skewed transparency”, where only significant portions of the overall product are made transparent, often partially or inaccurately. Both selective and skewed transparency cascade into the next phase, impacting technology outcomes.

In the technology outcomes phase, traceability systems, while designed to ensure accountability and enhance transparency, may have unintended consequences, such as the overexposure of traceability data that could reveal sensitive or competitive information. This potential risk makes participating companies view traceability as a “double-edged sword”. Selective or skewed transparency often results in an “incomplete single source of truth”, where stakeholders rely on scattered or biased data, which prevents the true potential of traceability and transparency from being realized.

In the final organizational outcomes phase, these challenges influence broader business dynamics. Inaccurate or partial traceability compromises sustainability because companies may become reluctant to share transparent information, fearing competitive disadvantages. Consequently, decisions based on inaccurate data can hinder an organization’s ability to meet sustainability goals. This reluctance can create a “stalemate in transparency”, where organizations choose not to fully engage in traceability initiatives, obstructing the development of a fully transparent supply chain and stalling progress.

There can be a bidirectional relationship between technology selection and organizational outcome; however, the findings in this case study commence from the technology selection point. Nonetheless, we acknowledge the presence of endogeneity in this model.

Each proposition mentioned in the study offers a pathway for improving traceability practices, emphasizing the necessity of balancing transparency with competitive advantages while ensuring that all aspects of the supply chain are accounted for in sustainability efforts. Since traceability is still in the early stages of development, both conceptually and technologically, apparel manufacturers serve as catalysts for engaging their products, their suppliers, and technology providers in unlocking traceability. However, this raises the question of whether the solutions developed truly align with consumer desires. Furthermore, a gap exists between the concepts of transparency and sustainability, stemming from implementation challenges, despite the availability of advanced technology. To bridge this gap, policies and enforcement mechanisms must be integrated into the framework of traceability to prevent selective transparency or intellectual dishonesty. This will ensure that traceability remains genuinely transparent and that the transformation toward a complete and true single source of truth progresses with the support of technology.

5.1. Addressing Endogeneity

Endogeneity is often a challenge in organizational management research and is an important consideration in this study since the framework is derived from a single interpretive case study on an apparel company’s pilot implementation of traceability technology. In this study, the potential sources of endogeneity arise from the selection of traceability technologies, which follow a structured process flow to organizational outcomes, suggesting a unidirectional causal pathway. However, in real-world supply chain dynamics, relationships are often bidirectional and recursive in nature [170]. In this instance, organizational factors such as sustainability commitments, competitive pressures, and regulatory demands may not only be influenced by technology adoption but also drive the initial decision to invest in traceability solutions. This feedback loop presents a potential endogeneity issue, as observed outcomes may simultaneously function as both causes and effects within the model.

Endogeneity in this study arises from multiple sources, including reverse causality, where pre-existing organizational objectives may have influenced the adoption of traceability technology rather than being a direct consequence of it [171,172], and omitted variable bias [173], where broader industry factors such as regulatory changes or market trends may shape both adoption and transparency as well as sustainability outcomes. Additionally, selection bias emerges as the study focuses on a firm that voluntarily implemented traceability, raising concerns about generalizability [174], while bias may arise from the interpretive nature of the research, where transparency and traceability outcomes are framed by organizational narratives [175].

To mitigate these concerns, process tracing and triangulation [143,176] are employed to systematically track the sequence of events and validate findings through multiple data sources, distinguishing correlation from causation. Additionally, the integration of multiple theoretical lenses including organizational information processing theory, paradox theory, signaling theory, and diffusion of innovation theory, helps account for alternative explanations (revelatory insights) and strengthens analytical depth [177]. Reflexivity and bias control are addressed through systematic coding techniques [178], reducing subjective interpretations. Furthermore, while this study is inherently cross-sectional, future research directions such as longitudinal studies, comparative case studies, or mixed-method approaches could further address endogeneity by isolating external influences and tracking long-term impacts [179]. By acknowledging and addressing these endogeneity concerns, this study enhances the credibility of its findings and provides a foundation for future research to build upon.

5.2. Theoretical and Practical Implications

This study has significant implications for industry practitioners and academics in the field of supply chain management, particularly decision-makers selecting technologies to enhance transparency and sustainability. By examining how traceability technologies can improve data flow, reduce information asymmetry, and resolve paradoxes between transparency and competitive advantage, the study advances established theories such as OIPT, paradox theory, signaling theory, and diffusion of innovation theory. These theoretical insights deepen the understanding of how technology influences supply chain operations.

Furthermore, this research highlights the importance of unified platforms, digital-physical integration, and industry-wide standardization to enhance transparency, consumer trust, and sustainability efforts. It provides practical guidance for practitioners on deploying traceability systems effectively while addressing challenges related to data sharing without compromising competitive advantage. This is particularly relevant for businesses seeking to improve their sustainability practices in industries where traceability is critical.

5.3. Limitations and Future Research

While this study provides valuable insights into the challenges of traceability technology in promoting transparency and broader sustainability in the apparel supply chain, there are several shortcomings that future studies could address. Firstly, this study focuses on a single case study of a pilot traceability implementation. Future research could examine multiple such implementations within the apparel industry, encompassing different geographical locations or extending the analysis to other industries that share similar philosophical approaches. This would help address the endogeneity issues inherent in the current model.

Additionally, this study examines a pilot implementation of traceability technology from the perspective of an apparel manufacturer. Future research could incorporate the perspectives of other stakeholders in the supply chain, including farmers, ginners, spinners, knitters, retailers, customers, and technology providers involved in the process.

Finally, relevant insights from regulatory and international legislative bodies could be examined to understand the interplay between traceability, transparency, sustainability, and technology. This could help uncover challenges that may hinder the full-scale implementation of traceability solutions. Incorporating the perspectives and experiences of a broader range of stakeholders would contribute to a more comprehensive understanding of the topic.