How can retailer Marks and Spencer benefit from using a radical trans-parency strategy within their organisation?

Amanda Schofield

Contents Page

01 Introduction...................................................................................................................................................................Page 1

-Marks and Spencer........................................................................................................................................Page 1

- Product Lifecycle Management..................................................................................................................Page 1

- Rationale..........................................................................................................................................................Page 1, 2

- Aims & Objectives..........................................................................................................................................Page 2

02 Background to the case................................................................................................................................................Page 3 - Radical Transparency....................................................................................................................................Page 3 - Everlane............................................................................................................................................................Page 3

- The Internet of Things...................................................................................................................................Page 4

03 Methodology....................................................................................................................................................................Page 5

- Research Methods..........................................................................................................................................Page 5

- Data Collection Methods..............................................................................................................................Page 6

- Research Ethics................................................................................................................................................Page 6

04 Data Analysis...................................................................................................................................................................Page 7, 8

- Cost-benefit Analysis.......................................................................................................................................Page 9

- Infographic........................................................................................................................................................Page 10, 11

05 Conclusion........................................................................................................................................................................Page 12

06 References.........................................................................................................................................................................Page 13. 14

07 Appendices.......................................................................................................................................................................Page 15-21

01 Introduction

Marks and SpencerMarks and Spencer Corporate (2016) describes Marks and Spencer to be a leading UK retailer featuring more than 1,330 stores across the world and 852 within the UK. They are known for their high quality products which are sold within their two divisions; food and general merchandise. Their womenswear, menswear and lingerie ranges currently have leading positions within the UK market. Aside from their great value products, the launch of M&S.com in Feb-ruary 2014 enabled Marks and Spencer to succeeded as a multi-channel retailer as they are now able to cater for different shopping habits and it is available on mobile, tablets as well as ‘Shop your way’ points within their stores. Marks and Spencer is also widely known for their sustainable success as they strive to reduce their environmental impact and improve lives globally. This has been achieved by their ethical and environmental programme named ‘Plan A’ which launched in January 2007 in order to underpin everything they do at Marks and Spencer. Plan A originally consisted of 100 commitments which were aimed to be achieved within five years however now Plan A 2020 is being introduced which will help them achieve becoming the most sustainable retailer in the world. (Marks and Spencer Corporate, 2016) The new Plan A 2020 will focus on helping communities, reducing waste and responsible sourcing with a key focus on improving the transparency within their supply chain.

Product Lifecycle ManagementProduct lifecycle management (PLM) is the business strategy utilised for the management of all the lifecycle stages of a product in the most effective way possible. This is achieved by the managing of all data from the initial idea of the product all the way to the products disposal. Overall PLM is used as a management system for an organisations total product portfolio by integrating all of its parts and products. There are many purposes for using this system for example to increase revenues, maximise the product portfolios value, and reduce product related costs. (Stark, 2015, p.1) PLM also has huge a potential in sustainability as for example PLM currently provides transparency about what’s really happening throughout the product lifecycle in terms of product mod-ifications and development. However PLM could further be used for the purpose of improving sustainability of products by offering transparency of where the products are actually coming from in terms of sourcing and suppliers. (Stark, 2015, p.37) With this in mind the focus of this case study will be investigat-ing a PLM extension ‘radical transparency’ which would allow PLM systems to take transparency one step further and to focus on operational benefits which result in a more transparent and sustainable business. This case study will therefore focus on the ‘m’ in PLM which refers to knowledge management and will therefore explore the data needed to achieve radical transparency and how it is managed. The outcome of this case study will be analysing how retailer Marks and Spencer would benefit from the use of radical transparency.

RationaleThe fashion supply chain is highly complex and time-sensitive involving multiple locations across the globe. Fashion items are usually sourced from multiple, ever-changing suppliers in small production runs with the costs of designing these fashion items being high. Due to this, this many retailers are re-luctant to trace their garments ethical and envrionmental effects within the supply chain in order to avoid a further increase in their costs which has resulted in the issue of transparency within the supply chain. (Black, 2012. p.93)

Hethorn & Ulasewicz (2015, p.155) describes transparency as a ‘culture of openness, disclosure and accountability.’ Over recent years there has been an increase in awareness of the topic throughout higher education, the government and the industry as within the apparel complex there is an increase in demand of transparency of the supply chain. This includes transparency regarding information of production, distribution, consumption and end of prod-uct lifecycle. The key reasoning behind such an increase in demand relates to the increase in pressure on media as Black (2012, p.139) states that frequent media exposes which have featured campaign groups such as the Clean Clothes Campaign have brought ‘invisible’ information to the fore of the consumers including information relating to the ‘extremes’ of the supply chain. This information has included poor working conditions of supply chain workers, ‘hid-den’ supply chain workers, under payment and poor living conditions of workers. Russell (2016) further supports this by describing that within recent years major brands have been eagerly trying to make their business more transparent after media exposed disasters such as the Rana Plaza factory collapse which pressured retailers to show where their clothing was being produced and the conditions within factories. However transparency is beginning to take a step further with ‘radical transparency’ being described as the future for retailers which will offer complete transparency for organisations including supplier fac-tories, company profits and other ‘private’ data. Forbes (2016) states that the need for radical transparency is in demand as both customers and employees prefer enaging with an organisation that is seen as humanised who openly provide information that would normally be private for example their employee salaries, original cost of production and their mark ups. Examples of companies who have began to delve into this business strategy includes BT, a social media start up ‘Buffer’, and fashion retailer Everlane. From the use of radical transparency these organisations have directly benefited from customer and employee loyalty as both customers and employees are seen as an important factor within business and are therefore free to view and comment on major business decisions for example choice of suppliers and mark up.

For Marks and Spencer radical transparency is key as although they have made significant improvements in improving livelihoods globally through educa-tion and sustainable practises, they are yet to disclose their clothing suppliers and factory conditions. This is particularly important as they have multiple accusations from the media as a result of this information being hidden as for example Russell (2016) describes how Labour Behind the Label found that Marks and Spencer suppliers located in India, Bangladesh and Sri Lanka are still living in abject poverty, working illegal levels of overtime and being paid poorly. Furthermore in order to compete against competitors such as Next, by disclosing information regarding costings throughout the supply chains they will gain a competitive advantage and increase their customer loyalty. 1

AimThe aim of this case study is to identify and analyse the ways Marks and Spencer could benefit through a radical transparency strategy and how the Internet of Things will enable this in the future.

Objectives-To analyse the ways radical transparency can enable Marks and Spencer to offer transparency of their supply chain-To discuss ways Marks and Spencer can gain a competitive advantage by using a radical transparency strategy such as increased customer loyalty.-To evaluate the internal benefits Marks and Spencer could gain from radical transparency such as employee trust and a ‘lean’ operating process. - To analyse an interview with Mark Harrop to gain an understanding of how the Internet of Things will unlock radical transparency in the future.

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02 Background to the Case

Radical Transparency Tansparency refers to companies being open about their business and therefore taking responsibility for their actions and their ethical and environmental impact. Examples of this include how companies may publish company reports or social responsibility reports in order to show their progression and allow stakeholders to comment. (Dickson et al, p.58) Therefore for transparency to take place Hethorn & Ulasewicz (2015, p.155) states that data must be collected concerning partners involved within distribution, production consumption and post consumer life. However concerning transparency of workers, the Mod

EverlaneEverlane is an online only boutique clothing company who used radical transparency at the heart of their company. Everlane's mission is to offer mens and womenswear basics and luxury apparel whilst offerring affordable price points dispite this resulting in lower marks ups and less profits for the retailer itself. The aim of this is to create awareness of unjustified mark ups and to educate consumers on profits retailers are making as a result of overprised clothing. Overall Everlane aim to influence responsible shopping and to encourage customers to always ask questions regarding original costs, mark ups and infor-mation on suppliers and factories. In order to do so, Everlane uses the concept of radical transparency to offer complete openness into their dealings with suppliers and the actual costing of their products. (Moore, 2014) Supporting this Hethorn & Ulasewicz (2015, p.92) describes how Everlane showcases this information to their consumers by their website content as on selection of a product, an infographic is provided offering a complete cost break down of each element of the supply chain including labor, materials, shippment, and then the mark up Everlane is achieving. (Figure 2) In order to enable such low prices Everlane has described to have ‘cut out the middle man’ and eliminated the costs of brick and mortar expenses and therefore is able to bring luxury fashion straight to the consumer. Also available next to each item is the factory where the item is made which in many cases even includes pictures and vidoes of garment production. To provide this information, Everlane works closesly with their suppliers and creates personal relationships to ensure the safety, well-being and overall tandard of the factories is exceptional. As a result of their hard work, Everlane’s sales only depend on word of mouth, social media and press.

ern Slavery Act 2015 is legislation that requires all business supplying goods or services who is either within the UK or partially operates in the UK to produce a slavery and human trafficking statement yearly. This statement must therefore entail what the organisations have done to ensure no human trafficking and slavery is taking place. Although this act encourages organisations to act responsibly by stating whether they are addressing slavery, it doesn’t ensure that slavery will not take place. (Gov.co.uk, 2015, p.5) An example of a organisation that is considered as transparent is Patagonia as the are able to provides transparent information and an insight into their supply chain. The footprint chronicles (figure 1) allows customers to see the location of their textile mills, factories and farms. (Hethorn & Ulasewicz, 2015, p.156) However transparency is still a common problem throughout large organisations for example Marks and Spencer who are yet to offer such an insight into their suppliers and factories.

Alternatively the term radical transparency offers a different meaning as Hanson (2016) describes it as complete openness into every stage of the product lifecycle. This is due to today’s consumers becoming increasingly demanding on information they can see regarding products which includes the environmental impact, involved labour and materials. This therefore re-quires an extensive amount of data for retailers to collect from every stage of the product lifecycle such as factories, products, costs and partners. In return radical transparency offers great benefits for retailers as those companies who are adopting the concept are becoming ‘faster, smarter and more successful.’ (Colvin, 2015) Overall those retailers those disclose this information can expect to benefit from an increase in customer loyalty, high value products, complete tracking of products, full knowledge of suppliers and factories and a competitive advantage within the market sector. Figure 1 - The footprint chronicles (Patagonia, 2016)

Some of the key benefits that Everlane have taken advantage of include: - An increased focus on their goals as transparency allows for a clearer image of what they need to achieve.- Enagagement, as by providing your own data and your employees together a sense of equality is created within the work place where em-ployees feel they are treated fairly and therefore will work well.- Growth and trust, as each individuals data can be seen as a contribu-tion to the company’s success and therefore employees can learn from each others success and mirror their behaviours to succeed themselves. - Improved brand image as media exposes are known for giving com-panies a bad reputation and therefore by being transparent about your actions and how your company is behaving in an ethical and environ-mentally manner, media can only bring positive attention to the retailer. (Cole, 2014)

Figure 2 - Everlane radical transparency (Everlane, 2016)3

The Internet of ThingsBrody & Pureswaran (2015) suggest that many companies and organisations and turning their attention to the Internet of Things which consists of billions of connected devices such as business process machines, industrial and household products, tablets, smartphones, cars and more. Together these connected devices have the potential to change customer experiences, deliver innovation for ogranisations and optimize operations globally. As throughout the next decade hundreds of billions more of these devices are expected the penetrate the market, the scale of the Internet of Things is in sight with the ability for a complete connectivity transformation. Harrop (2016) states that connectivity will have significant importance across every industry and whilst the Internet of Things will allow PLM to evolve, in return PLM will provide a context and content for the Internet of Things. However in the context of radical transparency, the Internet of Things will create a digital transformation where transparency, audits and legal requirement will be supported by data shared between the headquarters and supply chain partners. In order to achieve this Le (2016) states that objects must be able to communicate with each other on their own accord within the need for humans to scan them. RFID tags and sensors must therefore be used as they have the ability to ‘talk’ to each other and allow for individual items to be tracked throughout the supply chain on a live feed. As a re-sult of this, radical transparency will be encouraged as each employee within an organisation will be able to see exacty where their products are coming from throughout the entire lifecycle and will therefore be encouraged to engage with partners more closely than ever before. Furthermore the Internet of Things and PLM will encourage the need for a ‘lean’ supply chain which will in itself encourage sustainable processes and transparency. Overall the Internet of Things will allow both the interaction and visibility of information to be more visible than ever which offers great scope for the future of radical transparency within organisations. (Le, 2016) Figure 3 shows the progress and future of the Internet of Things. Figure 3 - The progress and future of the Internet of Things (Hanson, 2016)

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03 Methodology

Case Study ResearchA case study will be used in order to document this research as it will allow for a specific ‘case’ to be investigated in depth within a real world context. Fur-thermore a case study design is appropriate in order to take into consideration prior research and theoretical propositions which helps guide the direction of the analysis as well as multiple sources of evidence being used in order to ensure data is reliable. (Yin, 2014, p.16/17) In order to gain a greater understanding of the case study design figure 4 shows the advantages and potential disadvantages and risks. Overall when reviewing these a case study design has been deemed as appropriate .

Advantages Disadvantages/Risks

- Enables real life applications- Enables investigation of fine details and how something really works- Can form a base for future research- Can help to gain insights into complex relationships- Allows complex inter-relationships of many variables to be examined - Can reveal unexpected insights into complex issues- Different results can emerge compared to a controlled experiment- They can be scaled depending on a specific case of a project

- Findings may not be relevant to any other context- They are studies of individual instances and therefore may be misleading and might not be what generally happens- Judgements as to what is significant are subject to the researcher- The generation of large amounts of information can be difficult to manage- A singular case study is time consuming and therefore not many can be undertaken- There is a risk when making generalisations from one sample

Figure 4 - The advantages, disadvantages and risks when using a case study design - Adapted from Cottrell (2014, p.163)

Qualitative ResearchIn many situations quantitative and qualitative research are used alongside each other in order to strengthen gathered research, however in some circum-stances only one is needed to meet specific research objectives. For example quantitative research focuses on collecting research in an objective way and collects data by experiments, closed questions in surveys, structured interviews and more. Alternatively qualitative data allows an understanding of human behaviour and uses some objectivity and a degree of subjectivity. (Cottrell, 2014. p.93) Qualitative research therefore collects data through case studies, open ended survey questions, focus groups, unstructured interviews and more. The key advantages and disadvantages of these types of research are shown in figure 5. However when reviewing their uses qualitative data has been found to be the most relevant in order to gain an in depth analysis of the ways Marks and Spencer can benefit from the use of radical transparency.

Advantages Disadvantages

Quantitative - Enables study on a broader scale through generating large amounts of data- Requires precise research questions and therefore generates precise answers- Data is easier to draw valid generalisations from due to scale of research

- Risk of gaining a skew - Can lack ecological validity due to artificial setting

Qualitative - Enable a greater set of responses due to being open-ended- Useful for in-depth analysis of individual cases- Real context allows for high ecological validity

- Findings may only be valid for the particular case- They are harder to manage and contain

Figure 5 - Advantages and disadvantages of quantitative and qualitative research - Adapted from Cottrell (2014, p.93)

Primary and Secondary Data Both primary and secondary sources will be used within this research in order to include already existing data that will help shape the direction of the analysis as well as raw data which will be part of the evidence base. Secondary sources will therefore include books, journal articles, websites and newspapers about the research topic which will throw light upon the analysis. On the other hand the primary sources will be the subject of the research and therefore will consist of interviews and will allow for personal findings to be generated. (Cottrell, 2014, p.123) From the secondary data and primary data themes will be drawn which will be analysed within the data analysis.

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Data Collection MethodsWithin this research two methods of data collection must be used in order to provide both primary and secondary data for the research. Documentation will be used to gather and provide already existing information regarding the research topic where as an interview format will be used to provide raw materials. In terms of documentation Yin (2014, p.105) describes it to likely to be relevant to all case studies as it can include a wide array of documents such as pro-gress reports, articles and internal records which can be very useful and easily accessible. However documentation should be used with caution as they may contain bias. (Yin, 2014, p.105) Alternatively Cottrell (2014, p.110) describes interviews to be the most important source for case studies as they can resembled guided conversations in order to obtain open ended detailed answers. Interviews however must also be conducted with caution as poor articulated questions can result in bias and sometimes responses may also be bias. For this research a semi-structured video call interview will be used to collect primary research and to encourage in depth responses.

Research EthicsAs an academic researcher it is expected that any research carried out will follow moral principles. This is key to ensure that participants are treated fairly and with respect and don’t suffer any distress or harm from participating. Furthermore it is also important to make sure that the researcher is protected from legal consequences. In order to carry out research ethically participants must be aware of the purpose of the research, what the researcher will do with the findings, their rights as a participant and how their information will be used. (Cottrell, 2014, p.107) In order to ensure this a low risk ethics form has been completed and approved by a supervisor (appendix 1) at Huddersfield University and a participant consent form and information sheet have been sent to the participant to inform them of the intentions of the research. (Appendix 2 and 3)

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04 Data Analysis

After gathering both primary and secondary research regarding the benefits of transparency and how future technology will affect this, it has been under-stood that by PLM systems integrating the Internet of Things within the future both data collection and publication of information will be simplified. In order to fully understand how radical transparency will be enabled within the future and will benefit retailers directly, below analysed is how Marks and Spencer could benefit from the use of radical transparency within their business with reference to their current objectives.

Supply Chain BenefitsAfter analysing both primary and secondary source data concerning the ways retailers can benefit by using radical transparency and the Internet of Things, certain themes have emerged. For example, the first theme relates to how PLM and the internet of things will enable radical transparency by offering organ-isations a way to completely track individual items throughout the entire supply chain through the use of RFID tags and sensors which report information to a live feed. (Le, 2016) In terms of Marks and Spencer this is possible the most beneficial advantages of radical transparency as Marks and Spencer (2015, p.14) stated that Plan A 2020 will aim to offer transparency within the supply chain as when they conducted market research and research with Globescan they found that supply chain was the main area of interest. The use of the Internet of Things integrated into their PLM system would therefore allow for more knowledge of the supply chain and an easier method of data collection to know exactly what’s going on and where . Mark Harrop (appendix 1) further supports this as he states that the use of radical transparency encourages employees to ‘talk’ and communicate with each other which overall leads to a more personal level of business. This therefore will encourage Marks and Spencer’s to communicate with their factories when normally the factory would be seen

Competitive AdvantageAnother key theme that was found was that by using a radical transparency strategy and using the innovation The Internet of Things, retailers would be able to gain a competitive advantage. For Marks and Spencer gaining a competitive advantage is essential as Marks and Spencer plc (2016) describes Marks and Spencer to be one of the leading retailers within the UK with leading positions in womenswear, menswear and lingerie. Due to this it is evident that Marks and Spencer prides itself in its success as a market leader. Currently Marks and Spencer have enabled a competitive advantage by their Plan A yearly publication stating their progress, however with customers becoming more demanding there is continuously room for improvement. Marks and Spencer would therefore be able to benefit from a competitve advantage due to radical transparency as it would allow them to provide information that competitors such as Next are yet to publish. For example although Next is currently working towards working with their suppliers and improving their standards in terms of no forced labour, fair wages and healthy working conditions are more, (Next plc, 2015, p.13) Marks and Spencer will be able to lead within this sector by using radical transparency and new tech-nology to provide more data. This will be achieved by using their current FlexPLM system alongside the Internet of Things within the future.

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Figure 6 - Marks and Spencer Plan A 2020 objective concerning suppliers (Marks and Spencer, 2015)

as an extension where retailers don’t know much information. However as Marks and Spencer’s have recently implemented PTC’s FlexPLM system they have begun to tackle the supply chain as PLM systems aim to create a ‘lean’ process which will in turn start to ensure supplier and factory standards are met in terms of hours worked and fair wage. Overall through tracking their items and knowing the exact location and conditions of their factories, Marks and Spencer will have the opportunity to release this information and make their dealings transparnet which will relieve the growing pressure from the media. Butler (2016) reporting that Asian factory workers for Marks and Spencers are recieving far less than living wage is just one example of the negative press Marks and Spencers has recieve in the past few years. Figure 6 shows one of the Plan A 2020 objectives concerning the supply chain.

Everlane is a current example of how radical transparency is enabling retailers to achieve a competitive advantage as they’ve been able to offer lower costs by getting products direcly to the customer. From this they have gained a postitive reputation, increased their sales through word of mouth and gained loyal customers. Hethorn & Ulasewicz (2015, p.92/93) Regarding Marks and Spencer's Plan A progress, they have recieved alot of positive ac-creditations and customer followings. Therefore radical transparency will enhance this by providing more information regarding their suppliers, factories and perhaps even orgininal costings like Everlane. (Figure 7) Customer loyalty will follow as a result of this allowing for a Figure 7 - Everlane original costings (Everlane, 2016)

Internal benefits within Marks and SpencerAnother key theme that emerged concerning how retailers can benefit by the use of a radical trasnparency related to benefits internally within the organisa-tion such as employee trust and commitment within the workplace as everyone’s data is viewed individually and therefore creates fairness and strives

boost in sales and customers who are more likely to commit to the brand. Mark Harrop (appendix 4) also describes that Marks and Spencer will become a faster and smarter retailer by using a radical transparency strategy which will allow them to remain at the top of the league. Furthermore as a knock on effect from the use of radical transparency they can also expect to gain benefits from gaining a competitive advantage in terms of sustainability as radical transparency requires PLM and the Internet of Things to create a ‘leaner’ process which is more effecient.

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employees to achieve. (Cole, 2014) This would be beneficial to Marks and Spencer as M&S Careers (n.d.) portrays how imporant employees are to Marks and Spencer as their employees are all subject to an active equal opportunities policy which ensure that all of their employees are to be treated fairly and given an equal opportunity within the business. They are also always encouraged to collorate and become actively involved within the business. In sight of this Jeffrey Hollender (2014) supports that radical transparency will further allow employeees to feel a sense of openness and belonging within the business and it’s important for all employees to be able to see where the work and money is going to gain a complete understanding of the company they are working for. Furthermore Marks and Spencer will also be able to benefit from clearer goals within the business as although they currently release an annual report and annual Plan A report to mark their progress, more transparency will allow for a clearer view of which of their Plan A objectives they have completed, which they are making good progress on and which areas still need to be improved and addressed within areas such as the supply chain. (Figure 8 shows current objectives are their current stage.) Mark Harrop (appendix 4) supports this is by viewing a ‘live dashboard’ rather than relying on humans for information, data is more accessible and reliable which therefore will promote speed and growth within the business.

Overall it is evident that Marks and Spencers could benefit in a variety of ways through the use of radical transparency and utilisation of the Internet of Things which will aid their currently progression concerning the supply chain, addressing customer expectations and their business strategy. Figure 8 - Plan A objectives and progression (Marks and Spencer, 015)

Cost-benefit Analysis

According to Mishan and Quah (2007) a cost-benefit analysis is fundamental in determining whether a a proposed project is worth a companies scarce resources. It there-fore offers a systematic process to determine whether the benefits of a project will outwieght the costs. This process is fundamental to ensure a planned project is profitable and will provide a benefitical outcome for the business. As there are no quantitative costs when implementing a radical transparency strategy, a cost-benefit analysis has been produced concerning qualitative information. In order to do so, the affects of radical transparency and their benefits and costs for stakeholders can be seen in figure 9.

Radical tranparency’s affect on:

Benefits Costs

The Supply Chain -The ability to track exactly where a product is coming from by the use of live data and the Internet of Things will increase profits by creating a lean operating process which will reduce time on human errors-Ability to identify potential improvements concerning sup-pliers and factories will enable progress of Plan A objectives-A lean operativing process will increase sustainability and efficiency resulting in an increae in profits and positive media which will in turn encourage sales from customers

-Factories may not comply with health and safety regulations leading to an increase in expenses in training and new equiptment-Workers may not be achieving fair living wage leading to an increase in expenses to increase wages-Factory workers may be working overtime which may require money being spent on more staff-Change of suppliers due to poor working conditions may be costly and timely -Customers may turn to alternatives if they don’t like where and how their clothes are being made which will result in a decrease in profits

Employees data -Individual goals can be set according to employees perfor-mance which will lead to high employee productivity and therefore will enable more money to be created per process-Sense of real fairness will increase employee engagement, motivation and will strive employees to achieve more hence further increasing employee productivity and more money per process

-If employees don’t agree with their data being shared throughout the busi-ness they may look for alternative companies to work for which will result in a waste of time looking for new employees-Employees may focus on being competitive rather than learning new ways to develop which may descrease their productivity

Visibility of where work and money is going

-Employees will feel like their work is important and will gain a better understanding of dealings within the organisation which will encourage people to work for Marks and Spencer and allow growth-Stakeholders will be able to see Marks and Spencer’s achievements and where they are heading

-Employees may not agree with where money within the business is going and may not wish to work for the organisation anymore-Visibility of salaries may cause an uproar if not considered as fair amongst workers

Visibility of costs and mark ups

-Honesty concerning mark ups and actual costs of the production of a product will increase customer loyalty and therefore sales -Customers will be more liekly to carry out transactions if they agree with the mark up and prices that are being offered -New customers may be attracted by the offerring of trans-parency on costs if competitors are failing to do the same

-Customers may be lost and therefore sales will be reduced if customers consider the mark up too large compared to other retailers-Individual costings will allow customers to see how much money goes to factory workers and suppliers which may reduce sales if customers don’t consider this fair and go to competitors instead

After analysing the cost-benefit analysis is it clear that alot of factors need to be taken into consideration before moving towards a radical transparency strategy. For example as radical transparency will have a massive impact on the visibility of the supply chain there are alot of both benefits and costs associated with this. The major benefits include complete tracking of data and a lean operating process throughout the supply chain which will be essential for Marks and Spencer as it will allow complete honesty of which factories and suppliers they are using and their true conditions. The costs therefore associated with this may only be in the short run however as although money may be spent improving their suppliers, chosen factories, and working to improve conditions may be costly at first in the long run they would have a positive impact. This is because they would improve Marks and Spencer’s corporate social responsibility and help them to achieve Plan A objectives realating to their suppier transparency. Al-ternatively, relating to the visibility of employee data the key benefits include an increase of employee productivity due to a sense of fairness throughout the business which can result in more money being made per process, this would however have to overweigh the cost of the risk of employees leaving due to disagreeing with their performance being displayed. Although in this case the benefits are more likely than the risks as employees will have the option to work harder and be rewarded for doing so. This would be beneficial to Marks and Spencer to allow them to increase the trust of their employees. Similarly as radical transparency will expose where the work and money is going within the business there is a similar risk of potential costs relating to employees not agreeing with where this is going and disagreeing with their wages, however the benefits may also outweigh the costs for this too as it will allow for growth throughout Marks and Spencer as everyone will be able to see the companies achievements and will feel like a valuable member of the company. Finally as radical transparency enables exact costings of products and the retailer’s mark ups to be visible this creates an array of benefits as it enables customers to be more involved with the retailer and therefore more loyal customers as they are able to see where money is going within the supply chain. This in turn will create important relationships with the customers and create trust and have the potential to attract new customers. However this could be dangerous for Marks and Spencer as if the mark up is considered too large in comparison to how must the suppliers are recieving customers may look for alternatives else where. Overall although the introduction of a radical transparency strategy for Marks and Spencer may have a number of costs many of them will only exist in the short run. On the whole radical transparency will create loyal customers and a lean operating supply chain which takes ethics and environmental effects into consideration.

Figure 8 - Plan A objectives and progression (Marks and Spencer, 015)

Figure 9 - Cost-benefit analysis

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INFOGRAPHIC1. Sales RevenueIf a radical trasparency strategy is used, it is likely to directly impact sales revenue as the disclosure of a retailers activities within the busi-ness is likely to attract positive publicity and therefore new customers. The sales revenue is defined as the income from customer purchases minus the costs from undeliverable items and returns. Sales revenue is normally correlated with advertising, seasonal forces, changes in prices and more, however in this case it must be corelated against the new business strategy to see if it has any effect on overall sales. Other metrics within this domain could further be used to measure how Marks and Spencer using a radical transparency strategy is perform-ing compared to retailers such as Next who are not using this strategy by analysing asset turnover ratio, return on assets and return on sales. Overall this will determine overall performance and the chance of sur-vival within the market sector. (Zwilling, 2011) Figures 10 and 11 shows Marks and Spencer’s current revenue.

Figure 10 - Marks and Spencer Corporate (2016) - 2015 Revenue

Figure 11 - Marks and Spencer Corporate (2016) - Comparison of 2014 and 2015 Revenue

2. Customer Loyalty and RetentionAs a radical transparency strategy attracts various positive media and strengthens the relationship with the customer, customer loyalty and retention is another metric that should be measured in order to see the effects of radical transparency on the company. According to Marketing MO (2016) this can be done by deciding the goals of the research and the best method for gathering the information. Customer information is usually gathered by one of three methods such as surveys which are able to gather honest customer feedback through acquiring quantitative data, informal feedback which enables the collection of qualitative data however from small groups of customers, and purchase analysis which can analyse customer activity on a large scale from customers who buy frequently. Marks and Spencer currently use an online survey to gather data regarding customer loyalty. Figure 12 shows a question taken from the Marks and Spencer online survey which can be completed using details of a shopping reciept.

Figure 12 - Yourmandsviews.com (2016) - Question taken from the Marks and Spencer online survey to assess customer loyalty

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3. Monthly Profit or LossProfit or loss calculations include both fixed and variable costs which are paid every month in order for the business to operate. For Mark and Spencer this will therefore involve employee salaries, rent of morgage, insurance and utilities. The aim of carrying out profit and loss calculations and analysing them each month is to determine what is effecting your profit the most such as operating costs and mark ups. As radical transpar-ency is a PLM extention, it is likely to increase productivity within the supply chain which therefore would be expected to increase profit by lowering the cost of operation. Furthermore as radical transparency will enable customers to see Marks and Spencer’s current mark up they may wish to lower this to attract more customers. The profit and loss sheet would therefore allow Marks and Spencer to see how much their profit relies on their current mark up. (Zwilling, 2011) Figure 13 shows the underlying profit before tax and group profit before tax in 2015 and the percentage increase from the the previous year.

5. Employee ProductivityEmployee productivity is a key measurable factor affecting the overall organisations productivity. Through the use of a simple calculation em-ployee productivity per individual, in a team or in a department can be measured. In order to calculate this the output (goods generated) must be devided by the input (total labour hours worked) which then calculates how much money is generated per hour by the employees. (Esposito, 2015) This would be an essential metric to analyse for Marks and Spencer when adopting a radical transparency strategy as radical ransparency is expected to increase employee productivity by openly showing each employees results to one and other. This therefore encourages employees to improve their efficiency and work to be the best. In addition monitoring how many labour hours are needed per process could also enable Marks and Spencer to ensure supply chain workers have the appropriate level of time needed to carrying out these processes and avoid the need for working overtime.

Figure 13 - Marks and Spencer Corporate (2015) - Profits

4. Social MediaSocial media is another key metric which should be measured to analyse the effects of the radical transparency strategy as it aims measure how many people are supporting and viewing posts by Marks and Spencer and how many people are impacted by a message. In order to review this Marks and Spencer need to analyse their LinkedIn connections, twitter followers and likes on their facebook page to see who they are reaching out to. In order to do this, each of these social networking sites all have analytic reports which are able to be tracked. This would enable Marks and Spencer to see who would be knowledeable of their new strategy. Furthermore in order to see who interacted with their message and to find feedback on the use of radical transparency futher metrics can be analysed such as who has shared posts on LinkedIn and Facebook or commented, who has clicked on links, and who has retweeted and men-tioned the post on twitter. Overall statistics on Facebook, Twitter and LinkedIn allow Marks and Spencer to see how many people are viewing their page and how they are interacting. (SVM, 2016) Marks and Spen-cer’s current social media statistics can be see in figure 14 which shows their current total of followers and likes on Twitter, figure 15 shows total pages likes, people talking about this and how many people checked in on Facebook, and figure 16 shows followers on LinkedIn.

Facebook

Twitter LinkedIn

Figure 14 - Twitter statistics (Twitter, 2016)

Figure 15 - LinkedIn statistics (Linke-dIn, 2016)

Figure 16 - Facebook statistics (Face-book, 2016)

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05 Conclusion

Overall it is evident that Marks and Spencer can benefit in a number of ways from adopting a radical transparency strategy for example through improving the transparency of the supply chain, listing their supplies and factories, having complete traceability of their products, gaining and maintaining loyal cus-tomers, and having various internal benefits such as hard working and knowledgeable employees. It is futher understood that by using new technology such as the Internet of Things this strategy will enable a ‘lean’ operating process by using live data and a live dashboard to provide this information. By adopting a radical transparency strategy Marks and Spencer would be able to work towards their Plan A 2020 objectives in a more organised manner by being able to see exactly what they have already achieved and which areas need to be addressed. The transparency of their supply chain would complement this by allow-ing them to address issues concerning which factories they are currently using and their standards and locations. When considering the costs and benefits of implementing this strategy is has been decided that the benefits will greatly outweigh the costs within the long run as many of the costs such as issues relating to the transparency of suppliers will be reduced after the strategy has been implemented. However in order to measure the benefits and success of radical transparency effectively, metrics such as sales revenue, cutomer loyalty, profit and loss, social media and employee productivity will be measured over time. Overall this case study has provided an interesting research topic and has sparked interest in other related topics such as the future of PLM and the Internet of Things.

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07 Appendices

Appendix 1 - Ethics form approval

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Appendix 2 - Participant information sheet

University of Huddersfield School of Art, Design and Architecture

Participant Information Sheet

Research Project Title: How can Marks and Spencer benefit from adopting a radical transparency strategy?

You are being invited to take part in a research project. Before you decide, it is important for you to under-stand why this research is being done and what it will involve. Please take time to read the following infor-mation and discuss it with others if you wish. Ask if there is anything that is not clear or if you would like more information. May I take this opportunity to thank you for taking time to read this.

What is the purpose of the project? The research project is intended to provide the research focus for a module which forms part of my degree. It will attempt to explore and evaluate the ways in which Marks and Spencer could benefit from adopting a radical transparency strategy for their organisation. Why have I been chosen?You have been chosen because you are a product lifecycle management professional and therefore will be able to answer questions concerning radical transparency as a product lifecycle management extension and how the Internet of Things will enable this.

Do I have to take part?As participation is voluntary you do not have to participate and you can withdraw at anytime.

What do I have to do? You will be invited to participate in a skype video call interview which will last around 45 minutes.

Are there any disadvantages to taking part?There should be no disadvantages in taking part. You can contact Jo Conlon at the School, University of Hudders-field if you have any problems.

Will all my details be kept confidential?Your name and profession and responses will be published within the case study which will be visible to moderators, the research and students.

What will happen to the results of the research study?The results of this research will be written up in a case study. If you would like a copy please contact the researcher.

What happens to the data collected? The data collected will be used as primary research in order to gain a greater understand of radical transparency and the potential of the Internet of Things.

Will I be paid for participating in the research? The participation for this research will be unpaid.

Who has reviewed and approved the study, and who can be contacted for further information? Jo Conlon School of Art, Design and Architecture at Huddersfield University

Name & Contact Details of Researcher: Amanda Schofieldamandalschofield@btinternet.com07545649311 18

Appendix 3 - Consent form sent to participant. Verbal consent was given for the research to proceed.

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Appendix 4 - Transcription from skype video call interview with Mark Harrop

Hello Mark, for my case study I’m analysing how retailers can benefit from the use of radical transparency. The purpose of this interview will therefore be to

find how retailers can benefit and how PLM and the Internet of Things will enable this in the future.

What is the current goal of PLM?The goal for me of plm and product data management is to share information. Just like we’re tlaking now, its to share things. So everyone works off the same view, the exact same view. Some people think a view of information is like viewing a document or a piece of paper. But we don’t need that anymore, it’s a screen. What we need is to see the screen for PLM, somewhere to put all the data. This needs to be across the entire supply chain including the brand retail-ers, wholesaler, where ever it is and in the facotries themselves including their suppliers. There’s factories sewing the goods like CMT, who are asked to make clothing for a brand. We as retailers and brands need to be like our company and therefore use the same systems like PLM, we need them to react quickily to the same piece of information, there should only be one version of this data. This needs to be the same original piece of information otherwise there is more versions of the truth and we don’t know which is the truth. The danger with the old way such as excel and phone calls is that mistakes are made where as we need a lean process. A fat process is where there’s wasted gaps in between, we want to remove non-value activities. We want to concentrate on pure value activities.

What are the benefits of PLM on cloud?On premise is where the software is on the premisis. where as PLM on cloud is where the solution is configured but that computer isn’t in the building it's in a data centre somewehre. Therefore we access PLM though the internet. There's now a shift towards cloud as more and more companies are going towards it. There is visibility of everything that’s going on, Adobe has complete visibility of what’s going on. It's like electiricity and gas if you dont pay you get switched off. It allows us to deploy software very quickily, we have it on clou and everyone in supply chain can get to it, everyone can see this one piece of information and it gets people talking across the supply chain. This is major transparency. The first problem of transparency relates to retailers not talking to each other, buyers don’t know what the merchandisers are doing, the merchandisers don’t know what the designers are doing and so on. They are as seperated as they are from factories at the other side of the world. Therefore PLM needs to be implemented in the HQ, the head office and integrated in all these department so everyone can see the one piece of infomation. Then move on to the supply chain. Everyone must be connected. You can then start to see what’s going on. The ultimate goal for me is when we get the head office right, the factories linked with the same software, we get the mills, the label suppliers, the packaging suppliers, the guys who are sending the RFID tags, so then we get transparency of the product.

How will PLM integrate the Internet of Things and how will this enable radical transparency?At the moment plm is about merchandising, design, technical creation and costing. The core processes. Future PLM will be enabled by more transparency and vibility throughout the supply chain. Eventually integration will be everywhere linking all people together. So what will make it even more visible and give transparency of where things are is when sensors, smart chips and RFID tags come in to the business. An example of how these will be used is on materials so when it’s insepcted it will tell us the width, shade, and how many rows can go together. Planners, designers, pattern makers, marker makers will all see this. Machines will be able to talk to each other about each process and then everything that gets completed will be put on the PLM dashboard to track everything. We will know exactly where anything is at an exact time. Full visibility. We will have a tracker on everything, we will know everything that’s happening within each section of the supply chain. Visibility is going to be there all the time. We need to get these companies to implement it in the supply chain.

Will the Internet of Things penetrate the industryOne hundred percent yes. It will evolve and will start simply at first through sensors in all sorts of different places, in the warehouse, in the retailers, in the spreading machines, counting people coming into stores, tags will be sewn in garments and it'll only cost a penny to sew them in. They will enable us to find garments and what sizes and an audit of what they are. But overtime the sensors will beome smarter, they are basic to begin with. Just like the internet it ill evolve overtime. It will become broader and broader and the adoption will take off and they’ll be in everything. Smarter chips will be less than a dollar but they will be expensive to roll out everywhere. They will get cheaper and cheaper and will become pennies and then they’ll be everywhere. They are starting to be deployed today for example when you order something off from amazon it is being tracked by sensors.

What will make Marks and Spencer move towards radical transparency? We don’t want to see another BHS, if Marks and Spencer want to remain at the top of the league in terms of clothing sales and if they want to beat next, they’ve got to be smarter, faster, more lean and will have to link the supply chain. In the last two years Marks and Spencer have started to implement PTC's FlexPLM. It’ll take a few years. I was talking to a few people from Marks and Spencer who are part of the implementation, they were saying it is going well. Marks and Spencer will reach a point where they will have to push it in to the supply chain, they’ll want to know where the goods are, they’ll want to see transparency. Marks and Spencer will want to see where everything is in the future because this information won’t depend on human beings. As it stands now the guy at the foctory won’t want to lose your business and therefore will lie saying it will be ready when it probably hasn’t even been started, everyone will end up working overtime. Marks and Spencer will therefore want to see where everything is and will know if that fabric is sitting in the warehouse. If you end up fining them it’ll be bad for them. Marks and Spencer aren’t doing it for their own benefit, they’re doing it to be compeitive and to be lean. To just leave reality. They’ll rank lower if they don’t. 20

How will this enable Marks and Spencer to be sustainable and transparent?I believe that a combination of a modern PLM solution that supports many different processes will deliver speed, transparency and sustainability because you have retailers who will effectively know everything that’s going on. They want to keep those factories running properly, sustainably, if they run out of work they go home then it takes time to start things up again. If everythings connected we can have the right resources in the right place and the right time. It'll deliver lots of benefits. Fair labour rights are part of PLM, the bill of labour is part of PLM. We know all the labour types, all those labour rates are going to be fair rates, you can’t be sustainable when you’re making people work too long and you’re not paying them right. We’ll stop this secret world of actual hours employees are working.

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