Special Guest Q&A with Jeff Wilson: Understanding the Network Model

2020 proved to us that supply chains are vulnerable, with impacts being felt by stakeholders across all phases of production. You likely noticed that I didn’t say “across all tiers of production,” and there’s a reason for that…

I had the pleasure of conducting this Q&A with someone who has been in the sustainability field for over fifteen years, has worked with some of the highest-regarded organizations in this space, and, most importantly, is my Dad. 

While Jeff Wilson’s interests in the sustainability space are expansive, we chose to focus this Q&A on a topic he’s particularly passionate about - the network model. As an alternative to the traditional linear model, the network model reimagines how our stuff can be made, reducing both social and environmental impacts. 

If you’re short on time, here are a few highlights from our conversation:

1. Imagined Systems - Our linear production model is just that; imagined. If you’re unhappy with the status quo, venture out to try something new.
2. Mounting Risks - With legislation gaining traction around the world, we can’t afford to not know who our suppliers are. There are more efficient ways to manage our production systems that offer cost-savings opportunities and meet legal requirements.
3. Look Around You - Nature is the best model we have for value-creation opportunities. Healthy ecosystems rely on interconnectivity and interdependence, so why can’t our production models?
4. Embrace Consumer Curiosity - Chances are your consumers have questions about your product; take this as an opportunity to embrace new models and traceability software that can support this.
5. Be Open to Change - The sustainability space is constantly evolving, which means data, language, trends, more are subject to change. As change comes, learn as much as you can and share this information with peers. 

This was an enlightening conversation with one of my favorite people in the world, and I hope you enjoy it as much as I did.

McKenzie: Dad, welcome to the Q and A! Thank you for being here with us, I appreciate you taking the time to sit down and talk with me and share a little bit of your experience and knowledge on the network model. 

Before we dive into what the network model is, if you can share a little bit of your background with our audience, and also what led you to become so passionate about traceability and the network model?

Jeff: I guess it goes back a ways into my education actually, where I was an environmental studies major at the University of California Santa Barbara. And I think that's when many of the seeds were planted for me in terms of my concern and passion for the environment in particular. And of course, I've been a lifelong surfer, so my relationship with the ocean sort of complemented that, and how much I treasure and value the ocean. 

Then it took a little bit of a detour professionally into an area that wasn't directly environmental in the travel business. But then fast forward probably 15 years or so and I was working at Quiksilver running a number of travel businesses and I just all of a sudden started realizing the way we were operating the business wasn't really sustainable. I started doing some research and doing some reading, and kind of the seminal thing that I read was From Green to Gold by Andrew Winston and his partner, and I've come to develop a relationship with Andrew who's been a guiding light for me. 

So, I ended up starting the first sustainability department globally at Quiksilver and involved a number of different aspects of our business and our footprint that I felt we could be doing a lot better on. One was our internal operations and let's just call those Scope 1, Scope 2. And then of course our product footprint, largely associated with Scope 3.  

I managed that with teams in Australia, Asia Pacific, and Europe, Middle East, Africa, as well as a team in the Americas.So, that's when I really kind of cut my teeth directly in a professional role of advancing sustainability across multiple parts of our business.

I worked on that until 2013 when, due to financial difficulties, the department was abandoned, unfortunately, and I was laid off. I went to work for Textile Exchange, building strategy and member relations. I cut my teeth there on a lot of issues associated with standards, transparency and traceability, along with other aspects of sustainability beyond that as well, continuing to learn broader sustainability concepts, obviously particularly related to the textile industry.  

I left Textile Exchange after a couple of years and went to work for one of the certification bodies across a bunch of different sectors based in Ann Arbor, Michigan, NSF International, to bring the certification and standards associated with textiles into NSF, which they didn't have. I was there for about four years and then left NSF to go to work in sales at a chemicals management software company - chemicals management, a big piece of sustainability related to, well, most every industry, but certainly the textile apparel footwear industry. So understanding hazardous chemicals and how to identify those, understand their toxicology, and aim to remove those from all levels, all phases of production in the supply network. So that's how I got going. 

McKenzie: And where does the traceability aspect fall in there? Where were you introduced to the network model?  

Jeff: Well, it really wasn't driven by traceability. It was driven by flaws in the overall system that I kept hearing people talk about. Typically the major complaint is this “take, make, use, waste.” It's at the core of why things are screwed up. We just take stuff and the impacts associated with that. We make stuff, and the impacts associated with that. We use stuff,and the impacts associated with that, and then we dispose of stuff. It was like, I had this “a-ha" moment.

Part of that problem is that it's a linear model. So you have, and it's depicted in so many ways, and it's described in so many ways, but the fundamentals of it are, you start back upstream at tier four, with raw material production, raw material extraction. This is true pretty much for any industry or consumer product. You've got raw materials that you have to get. Then, those raw materials undergo some intermediate processing typically. In the textile-apparel industry, the basics are it goes from raw material into fiber, into yarn, into fabric manufacture, into finished goods, and then out to market to the consumer, used and then disposed of. In our case, apparel-footwear, we're mostly landfilled, unfortunately. 

One of the things that I was kind of charged with by Larhea Pepper at Textile Exchange - and we kept talking about transformational change, and we weren't really talking about incremental change - what could we do to try and advocate for transformational change? 

This [network model] stuck out to me as one of those things that is truly transformational. You're talking about re-imagining, redesigning, rethinking, and revisioning the entire production and consumption model, a system that we've had in place for the last 150-plus years, we've had this linear model. 

 And of course, you know, many of the things that are problematic with the linear model is, people talk about “it's opaque, it's long, I don't know who my suppliers are in tier four, tier three, they're too far away, there's too much distance,” and it was like, well, unless we change that, we're just gonna continue to have these problems. And it's true today. I mean, we still have many of the same problems that we were talking about when I started in 2006. So we're talking about almost 18 years, and we've still got the same core problems. 

 So the idea was that this would be… I was looking for something truly transformational. I do believe this is a genuinely core transformational part of reimagining how we produce stuff, how we consume stuff, and how we dispose of stuff.

McKenzie: Yeah, it definitely is transformational. I think there are pros and cons of transformational [systems], but we'll save that.

Going back to that traditional linear model, can you explain the traditional linear production and consumption model?

Jeff: There are phases of production, I call them phases, that start at material extraction and move through the system. As it moves through the system from raw materials, all the way through to the consumer and beyond to disposal. You may hear it as “take, make, waste.” We have to include the “use” piece of this because there can be pretty significant use implications at the consumer level. 

It's a system that, truthfully, we've imagined. The human mind has imagined this system. And so we execute it, we talk about it, and we behave in it as an imagined system. So you get from that, you have the linear concepts that come from it, this tier four, tier three, tier two, tier one; take, make, use; upstream, downstream; long, complex supply chains, et cetera, et cetera, all the languages that we use to describe this imagined model. 

McKenzie: What are some of the biggest issues or risks surrounding the linear model?

Jeff: Well, the biggest problem I see is, in a linear model, there's distance. We've created this figurative and literal distance now with global supply and production that we, the brands, say “Well, I don't have any visibility into this. It's too complex, it's too long,” and all of that. So you don't have visibility into your production. You don't know who's making the stuff that goes into your product. You typically then don't have a relationship with them. You certainly can't necessarily have trust that what you're buying is what you think you're buying, so that's the traceability issue.

You can't take benefit of the ideas and the innovation that these suppliers have in the system. These people know what they're doing, they have ideas about how to improve. There isn't collaboration, coordination, and innovation because of that distance.

I'll also say just another thing too, and this is a little bit of the disconnect in how people think about the linear model. You talk about a chain, right? And it's well known that the old adage that “the chain is only as strong as its weakest link,” so when you have a linear model and there's a break in the chain, everything downstream suffers.

McKenzie: You introduced me to the idea of a network model, and we have your version of the network model available for our readers to view. Can you please explain how the network model is different from the linear model and why it's needed?

Jeff: I think most people are very, very familiar with networks. They just don't necessarily make the connection between how it could apply here in a production and consumption model. We have networks all over the place. We have transportation networks, we have telecommunication networks, neural networks, we have all kinds of distribution networks. The network idea is nothing revolutionary.

Look at your social network. You're at the center and you've got first-degree, second-degree, all these interactions. That's the dynamic of a network that's reflected in that graphic there. There's significant interconnectivity and interdependence within the network. 

In looking at this graphically, you’ve got manufacturers, suppliers, retailers, and brands, and then you've got consumers, with consumers being at the heart, at the very core, because that's what this system, our value production system, is designed to do. It serves customers and satisfies their needs. So, they're at the center of the network model rather than out way at the very end of a linear production model.

You can see it's not linear. There's a great deal of interconnectivity between the players, including the consumers out to retailers and brands, consumers out to suppliers, and vice versa. So, it's very important to understand this is a democratized way. It's a very public, democratized way of building value.

One thing that was an “a-ha" moment for me as I started thinking about this was, that nature's been doing this forever and nature builds value incredibly well, incredibly efficiently. There’s no waste. All material is recovered and generated back into the system. And this is what that is. This is an ecosystem.

Anybody who's done any biology or ecology work knows that what's at the heart of any ecosystem is a large degree of interdependence and interconnectivity to make the ecosystem healthy. That is not a hierarchical model. Many biologists now don't refer to material flows, or value creation in an ecosystem through the food chain, they now describe it as a food web.

We should be designing our industrial system around the way nature creates value. This is largely the idea around industrial ecology, understanding how natural systems can be translated into production industrial systems, and that's largely what the supply network model mimics. 

One thing that's important to understand here with the network model is sometimes people confuse or conflate it with circularity. This is not circularity. In my mind, this is beyond circularity - this enables circularity a lot better than the linear model. 

If you look at most of the circular models that are out there graphically, all they do is take the linear model and curve it around in a circle. It doesn't create the networking that needs to take place between those different players. I'm not saying circularity is bad because I'm certainly not, it needs to be there, but the overarching production system and model that we use to enable that is this, the network model. 

McKenzie: I think a question people may have is “Why is it important for a consumer to know who the manufacturer was, or what material is this garment made out of?” So why is it important for a consumer to be able to follow all phases of production for a product?

Jeff: Consumers themselves are becoming more interested and actually demanding. We're seeing this in the data. They want to know where their stuff is made. They want to know who's making it, and they want to know what it's made of and trust that all of that is actually happening. So this is that traceability, transparency piece that I think is growing, and brands being held responsible and accountable for having that information delivered to the consumer so that they can make informed choices. This is the idea behind the digital passport. 

I think the second reason is increasing legislation that is going to require this information be provided. It isn't just for consumers, although ultimately I think that's what's probably the largest benefit. But certainly for governments and certainly for NGOs, there's an openness to transparency that will help establish more credibility and trust, reduce greenwashing, and create more factual, trustworthy information in the system by virtue of this type of model.

Brands want to know too. If they're investing money in a supplier to do X, say it has to do with social labor and not using forced labor or child labor or what have you, they want to know that that's in fact happening and that there's evidence that that's happening. The brand is responsible for whatever they say about the product in the marketplace, so this absolutely is integral to improving the ability to document and demonstrate what's true and what's not.

McKenzie: You’ve already touched on it, but what are some of the benefits or opportunities of adopting the network model?

Jeff: These aren't necessarily in order, but collaboration -  you have this interdependency and interconnectivity, so you collaborate. As I said earlier, these suppliers have a lot of knowledge. It's what they do for a living, they're professionals. So, you can collaborate better with them. Innovation as part of that collaboration - they’re innovative, they have ideas, and so the relationships that develop out of the closer network model can spur innovation for all kinds of things, whether it's new fibers, new dyes, new fabrics, what have you. 

Efficiency is another one. You can communicate more efficiently, more effectively, and it creates an overall efficiency. The network model lends itself to optimization opportunities to create greater efficiencies. 

Then there’s traceability. We've talked about not only knowing who is producing the raw material or the fiber or the yarn, but you also have characteristics about that. Say it's organic cotton, or it's recycled polyester, or it's a certain preferred man-made cellulosic or it's recycled elastane, all the different environmentally preferred attributes of a particular raw material, that enable you to see who's making it, where it's being made, we'll call it the traceability elements of that. It could be material, it could be chemical, it could be social labor or any number of attributes that you can have in the system as a result of this. That's easier to trace. 

Then, as we talked about too, the compliance with digital passport legislation that's coming in and traceability,transparency legislation. It's getting out in front of that and more efficiently enabling the compliance piece of all this.

McKenzie: It seems like there are plenty of benefits to adopting the network model. Why hasn't it been adopted on a larger scale? Are there any barriers preventing organizations from switching to the network model?

Jeff: Yeah, so as I said in the beginning, this is a transformational idea. That doesn't come easy. As it is with so many different models - let's just take our fossil fuel energy model now. We have an embedded status quo model that just seeps into the establishment and right or wrong, good or bad, but these models develop in our heads, in our practice, and in our language that we just take for granted. So, we go through the day, we go through the week, we go through the year just repeating this stuff because that's what we've always done. 

That's probably the largest obstacle. We just keep going with what we know and what we've done, even though we continue to see the liabilities and the problems, we pick around the edges to try and make change within a flawed system. But that's doomed for failure because all you're doing is trying to improve a flawed system at its core.

Number two is maybe it's a little more complicated for people to understand. It's a little bit different, but that's what transformational change is, it's disruptive. We look at many of the disruptive changes that occur across industries, and at first, it's hard. 

So how do we overcome that? One is brands. They own the product and have the ability to change the thinking, change the relationships, and build a new model. Number two is people in academics, in the trade groups becoming more familiar with the idea and understanding how it works and the benefits of it. 

McKenzie: We’ve seen a lot of legislation coming out of Europe around green claims, due diligence, digital product passport, and traceability. How does the network model help with all of this? And for those out there who don’t know what a digital product passport is, can you please explain?

Jeff: Yes, so as best I understand it, and I'm not going to sit here and say that I'm a 100% expert on the legislation coming out of Europe and the digital passport in and of itself, but fundamentally when a product is done, there is a trail of information that is captured that demonstrates the transparency of where different inputs in the phases of production come from and what stuff is made of, and that there is a degree of trust in terms of traceability. 

No system is perfect and anybody can probably cheat the system, but the system as it has existed in the past in terms of traceability and transparency is fraught with inefficiencies, costs, fraud, unintentional mistakes, and just bureaucracy. So, the digital passport will enable some of the outcomes that have been serving the linear model, from scope certificates to transaction certificates, that will be captured digitally through a blockchain capability that allows pretty much full transparency and traceability of a given product.

Think of it like a passport - as you move between countries, the passport is there to serve entry and exit. So blockchain is what enables that through the block, the hash, if you will, in the blockchain for given materials that flow through the network system, and ultimately [the data] can be captured in what's called a digital passport. 

The digital passport is a digital twin. So as a material moves through the system, through the network, the blockchain follows that digitally as a digital twin to the actual physical asset. Cotton moves to the gin, which moves to the yarn maker, which moves to the fabric mill, which moves to finished goods. As it moves through those phases of production in the network, the blockchain captures that and it creates a digital twin.

There are ways to complement the digital twin aspect of it with physical assets through things like tracer technology. You can have, let's say at raw material, you can have the block started. So it captures that it's organic cotton, but you can also enter a physical tracer into the cotton that enables you to physically track that and say, “Yes, this is organic cotton coming off the farm.” The yarn spinner receives that shipment, checks it, traces it, [confirms] that it’s organic cotton. The tracer gun reads it and can sense through the tracer that that's organic cotton. Then it moves to the fabric mill. Same thing - the fabric mill receives the yarn, does the trace, and verifies that it’s organic cotton. 

So that tracer is the physical characteristic that can accompany the digital characteristic of the material. And that's what we're interested in is the asset, the material, whatever it is, as it moves through the network, that it is what it [claims to be]. It's what the brand's paying for, it's what the consumer is buying, and that's reflected in the digital passport.

McKenzie: How does a network model enable true traceability?

Jeff: I think the first thing I'd like to point out is if you look at this diagram, this is what a blockchain peer-to-peer network looks like that's actually modeled after the textile apparel industry. If you scroll back to the network model, these are exactly the same.

So, you see the stakeholders and the interconnectivity, the peer-to-peer network that this model is actually about. Now if we look at the blockchain model, you can see it's the same thing. 

In the beginning, you've got the digital ledger. That's fundamentally the digital passport. It's the blockchain. It's where the data in this network system is captured in a given block. 

As the material flows between and among these stakeholders, the blockchain digital ledger, the block is at the heart of it. The point of that is that the technology is there as an enabler for this model. It just facilitates, in a very democratized way and a very efficient way, how all this data is communicated and stored, and encrypted for security's sake. You can't have any one of these players fudge the data. If they do, the peer-to-peer network blocks it and the block is stopped. So you've got a strong degree of peer-to-peer investment in the honesty and the truth of what any stakeholder enters into the block.

What it's trying to do is, it's trying to get middle people out of the way and create a more efficient, trusted system between the players in the system that all have a stake in the system's health and success. 

It's currently being utilized in the industry - Textile Genesis, Aware, and others. Textile Exchange is utilizing Textile Genesis to do this, but we still haven't connected the dots between this blockchain model and the technology that it provides with the transformation of how we think about our production system and consumption system.

I don't want to leave it just at that, because we do have consumer use and post-consumer that can easily be captured into this technology piece. I'll just use an example: You've got a digital passport, it's got all the information. A consumer can take their good that has that digital passport information on it, get it to a recycler, and that recycler, as long as they're part of the network, can then capture that post-consumer use, drive it back into another stakeholder in the system to create circularity.

It's important to understand within the network, there’s always material recovery. I don't like using the word waste, but there are always byproducts and co-products that come out of an industrial process that can be recovered and put back into the system. This model, through its connectivity and interdependence, enables that. 

McKenzie: I think that’s a good segue into my next question - one could argue that the network model is one of the more complex concepts in the sustainability space, so what do you say to anyone who thinks it's too complex to be adopted on the global scale?

Jeff: Well, my first comeback is that it’s already complex. You don't even know who your tier three and tier four suppliers are. If you keep trying to tweak the existing system, or you try to get a better, different result out of it, it's just not going to happen. 

So that’s my comeback, let’s reimagine what we know to be wrong about the system and imagine it in a different way that better captures the complexity, makes it easier to track, and just overall, especially for sustainability, a better way to create less harmful impacts. 

McKenzie: If someone is in an organization right now and they want to start shifting their supply method from the linear model to a network model, what advice can you give them and where should they start?

Jeff: One is understanding the fundamentals of it, so do research. If this captures your imagination and you think it has relevance and impact for your organization, then take some time to read more about it. 

As I said earlier, Google “industrial ecology,” read what is out there, what papers are written, read about blockchain, read about network modeling and network effects, and try to understand the power of a network and how a network is built and why it's built, and again, the blockchain enabling of that.

Number two is it’s a big change and internally in an organization, you have language, behaviors, and everything that's kind of just “we’ve always done it this way,” but you start one step at a time. Maybe there are some champions who turn their heads when you start talking to them [about the network model] and they go “Yeah, that makes sense, I want to learn more.” You sort of build this wave of understanding.

Ultimately, when it comes to brass tacks, is getting with some key folks at the organization. I don't know if that necessarily has to be at the senior level, but where you've got some champions for this, say on a product level, and you can take a beta test and establish with a given product or a product category and try to establish a little pilot network. You can work with a blockchain supplier like Textile Genesis or Aware and sort of bring the players together and say “This is what we're trying to do and this is why we're doing it, and we want to do a beta test for men’s tees.” You could build maybe a little regional supply network as a beta test for a given product or product category.

Of course, that's turning some heads in a number of pieces of the organization. There's certainly some risk associated with it, but it's a long haul. You're talking about upsetting, in this particular case with apparel and footwear, a century plus of a given model.

I'll say again, my fundamental question is “Are you happy with the way the system works today?” Not pieces of the system, but the system as a whole. 

We need system change and collaboration, but if you take the linear model, you're just trying to fix pieces of a broken basic model. It's not going to get you where you want to get. We're going to be where we are today, seven, ten years from now, scratching our heads wondering “How come, why do we not have better results?”

McKenzie: As we wrap things up, I want to say thank you again for doing this with me. I think this is such an important topic that really bridges the gap between a lot of the issues that we're seeing in the sustainability space right now, regardless of product or sector.

If someone wants to connect with you, where is the best place they can do that? 

Jeff: My pleasure. You can reach me on LinkedIn, happy to have conversations with anyone interested in learning more about the network model.

Thank you for joining us in this Q&A, and thank you, Dad, for sharing your insights with us. If you’d like to see more Q&As with other industry experts, please send us an email at [email protected]. 

Topics from Jeff’s Q&A:

• UCSB Environmental Studies Program
• Green to Gold by Daniel Esty and Andrew Winston
• Textile Exchange
• NSF
• Industrial Ecology
• Textile Genesis
• Aware
• Jeff's LinkedIn