Sustainability has become a non-negotiable priority in the fashion industry. Consumers are demanding greater transparency, governments are introducing stricter regulations, and brands must adapt or risk reputational damage. The key to sustainable fashion is traceability—the ability to track raw materials, production processes, and supply chain operations from start to finish.

Without traceability, brands face challenges in verifying ethical labor practices, ensuring environmental responsibility, and meeting compliance standards. Implementing PLM (Product Lifecycle Management) and ERP (Enterprise Resource Planning) systems provides brands with real-time data, supplier transparency, and audit-ready documentation, ensuring they meet sustainability goals.

This guide explores why traceability is essential in today’s fashion industry, the role of technology in achieving supply chain visibility, and how PLM and ERP systems help brands maintain compliance while building consumer trust.

Why Traceability is Critical in Sustainable Fashion

Traceability ensures that every component of a garment—from raw materials to final packaging—can be traced back to its source. This is essential for:

1. Consumer Trust & Ethical Transparency

Shoppers want to know where their clothes come from. Brands that offer supply chain transparency stand out, while those with unclear sourcing practices risk consumer backlash.

Example: 66% of global consumers are willing to pay more for sustainable brands (Nielsen report). Fashion leaders like Patagonia and Stella McCartney have built loyal customer bases by openly sharing sourcing and sustainability data.

2. Regulatory Compliance & Risk Management

Governments are tightening regulations on supply chain ethics, environmental impact, and human rights violations. Key regulations include:

• EU Green Deal & Digital Product Passport (2024-2030) – Requires traceability for textiles to improve recyclability.

• California Transparency in Supply Chains Act – Forces brands to disclose anti-slavery efforts.

• Fashion Sustainability and Social Accountability Act (New York) – Requires brands to map 50% of supply chains.

Brands without traceable supply chains face legal risks, fines, and import restrictions.

3. Sustainable Material Verification

Many brands claim to use organic, recycled, or sustainable materials, but without traceability documentation, there is no proof.

Certifications such as:

• GOTS (Global Organic Textile Standard) for organic fibers

• GRS (Global Recycled Standard) for recycled materials

• FSC (Forest Stewardship Council) for wood-based fibers

require full traceability records to authenticate sustainable claims.

4. Reducing Waste & Carbon Footprint

Traceability helps brands track and reduce carbon emissions, waste, and energy consumption at each stage of production.

Example: H&M’s supply chain mapping tool measures carbon footprint per garment, allowing customers to see sustainability scores for each product.

Challenges in Achieving Full Traceability

Despite its importance, many brands struggle with tracking raw materials and supplier data. Common challenges include:

• Fragmented Supplier Networks – Many brands rely on multiple factories, mills, and dye houses across different countries.

• Lack of Digital Documentation – Many suppliers still use paper-based records, making it hard to track sustainability metrics.

• Supplier Resistance to Transparency – Some manufacturers withhold data to protect pricing models or avoid exposing unethical practices.

How PLM and ERP Systems Enable Supply Chain Transparency

Technology is the foundation of traceability. Implementing PLM and ERP solutions enables brands to digitally track, document, and verify their entire supply chain.

1. PLM for Material & Supplier Traceability

A PLM system like KOBO PLM centralizes data on materials, suppliers, and certifications, making it easy to track every component.

Key Features:

• Material Library – Stores details on fibers, dyes, trims, and sustainability certifications.

• Supplier Database – Tracks factory audits, compliance documents, and sustainability scores.

• BOM (Bill of Materials) Integration – Ensures all materials in a garment are traceable from sourcing to production.

  
  

Example: A luxury fashion house reduced compliance errors by 40% using KOBO PLM’s supplier traceability module.

2. ERP for Real-Time Supply Chain Monitoring

An ERP system helps brands track logistics, shipments, and production stages in real time.

Key Features:

• Blockchain Integration – Secures supply chain data, preventing fraud in material sourcing.

• Real-Time Inventory Tracking – Reduces material waste by monitoring raw material use vs. production needs.

• Automated Compliance Reports – Prepares audit-ready documents for regulatory inspections.

  
  

Example: Adidas uses ERP-powered blockchain technology to verify sustainable material sourcing and track CO2 emissions per product.

The Business Benefits of Investing in Traceability

Beyond compliance, brands that implement strong traceability systems gain:

| Benefit | Impact |
| --- | --- |
| Enhanced Brand Reputation | Consumers trust transparent brands and are more loyal. |
| Regulatory Protection | Avoid fines and supply chain restrictions. |
| Stronger Supplier Relationships | Clear tracking fosters ethical manufacturing partnerships. |
| Waste & Cost Reduction | Optimizing material use reduces overproduction costs

Example: Levi’s reduced water waste by 96% by using traceability data to optimize denim production methods.

How to Get Started with Traceability in Your Fashion Supply Chain

1. Digitize Your Supply Chain with PLM & ERP

• Use PLM for material, supplier, and product tracking.

• Use ERP for logistics, real-time monitoring, and compliance reporting.

2. Work Only with Transparent Suppliers

• Require all factories to disclose sustainability certifications.

• Conduct regular audits to ensure compliance with ethical standards.

3. Use Blockchain for Authenticity

• Implement digital product passports that store lifecycle data for every product.

• Verify organic, recycled, or ethical sourcing claims via tamper-proof blockchain systems.

Example: Kering (Gucci, Balenciaga, Alexander McQueen) uses blockchain to verify leather sourcing and provide consumers with product origin data.

Conclusion

Traceability is the foundation of sustainable fashion. With rising consumer expectations and stricter global regulations, brands must prioritize supply chain transparency or risk falling behind.

By implementing PLM and ERP solutions, brands can:

• Verify sustainable sourcing and compliance in real time.

• Reduce waste and optimize production efficiency.

• Build trust with consumers through transparency.

Next Steps:

• Download our Supply Chain Traceability Checklist.

• Explore KOBO PLM’s traceability features for ethical fashion brands.

• Book a consultation to improve sustainability in your supply chain.