POMS Abstract Number - 020-0314

SUPPLY NETWORK REORGANIZATION IN THE TANNING INDUSTRY: AN ACTION

RESEARCH PROJECT

Laura Macchion1, Pamela Danese

2, Andrea Vinelli

3, Guido Zilli

4

1Department of Management and Engineering, University of Padova,

Stradella S. Nicola, 3 - 36100 Vicenza, Italy

laura.macchion@studenti.unipd.it +39 444 998789

2Department of Management and Engineering, University of Padova,

Stradella S. Nicola, 3 - 36100 Vicenza, Italy

pamela.danese@unipd.it +39 444998703

3Department of Management and Engineering, University of Padova,

Stradella S. Nicola, 3 - 36100 Vicenza, Italy

andrea.vinelli@unipd.it +39 444 998740

4Gruppo Dani S.p.a

Via Quarta Strada, 20 – 36071 Arzignano (VI), Italy

guido_zilli@gruppodani.it +39 0444 471215

Supply Network Reorganization In The Tanning Industry: An Action Research Project

ABSTRACT

The aim of this research is analyzing how supply networks operating in tanning industry can be

redesigned to make production processes efficient and environmentally safe. Very strict environmental

laws force tanning companies to regulate sewage water reuse and purification, and reduce the

chemicals used in production. These laws motivate the search for new tanning technologies that

comply with the standards of emission required by the environmental legislation. An action research

project developed in collaboration with Gruppo Dani, one of the largest Italian tannery, is conducted to

understand how the supply network of a tanning company could be redesigned, in order to reduce

environmental impact of tanning production processes. Preliminary findings provide new insights on

how increased collaboration among leading supply chain partners allows implementation of innovative

technologies that show a low environmental impact, on the one side, and help to reduce throughput

time, on the other.

INTRODUCTION

Waste from industries such as tanneries can lead to the degradation of water and land resources,

especially when these companies are located in close proximity to rivers. The damages may affect

pollution of rivers, but also surface and groundwater pollution. From an environmental perspective,

natural water resources are limited and, therefore, the management of these resources is very important.

According to Tobler-Rohr (2000) Sustainable Development is by no means an unambiguous

concept. Most definitions include ecological, economical and social aspects, but for the purpose of this

study Sustainability Development can be defined as follows:

sustainable development improves the quality of life worldwide and develops environmentally-

tolerable technologies;

sustainable development operates only to the extent that renewable resources can be

regenerated;

sustainable development creates a global alliance and enables communities to care for their own

environment. It changes the attitudes and attention of people for environmental problems.

Therefore, the impacts of a tannery in a specific region must be fully understood to define a complete

environmental profile of the supply network and identify potential problematic areas. In particular the

main issues to be considered are:

• salinisation of surface water due to the discharge of saline effluents from manufacturing and

processing industries, irrigation, discharge of underground water and of treated sewerage

effluents;

• localized pollution through spillages and accidental leakages, that may cause health problems

and damages to the ecosystems in the immediate vicinity;

• emissions of greenhouse gases and other air pollutants;

• discharge of toxic substances.

Tanneries are industries that consume huge amount of water in several stages, generating an

enormous sum of liquid effluents; which, in turn, demands significant investments and high operational

costs in treatments to fit in the standard emissions normally demanded by environmental legislation.

On average, 30,000 liters of water are used per ton of salty leathers, which, hereafter, generate 250 kg

of tanned leather (Farenzena et al., 2005). Transposing these numbers in a world-wide scale, water

consumption becomes enormous. Nowadays, tanneries are increasingly exposed to national and

international pressures to adopt legislative environment-friendly production practices. In addition,

environment-friendly production seems to become an important order-winning in the global arena due

to customers’ new behaviours, needs and expectations.

Along with high water consumption, considerable amounts of chemicals are also used in tannery’s

processes. The main contaminants are salt (sodium chloride and ammonium sulphate), organic material

and trivalent chromium. Therefore, huge investments in infrastructures are required to keep the level of

environmental protection controlled. In particular, purification plants must be created for treating waste

waters and muds coming from the working of the hides.

An effective pollution prevention can be reached through the combination of regeneration, recycle

and reuse of streams (Wang and Smith, 1994) involving all the tannery’s supply network. All the actors

involved in supply network should develop a greater attention to environmental problems to reduce the

environmental impacts of their processes.

In this context, a redesign and reorganization of tanneries’ supply network seem to offer a feasible

answer that could lead to significant improvements in the management of production waste and

polluting agents.

A significant example of supply network reorganisation within the tanning industry is provided by

the work of Kennedy (1999) with reference to Indian tanneries. Tanneries pollution had caused

considerable damages to water resources and, thereby, to agricultural land through irrigation. In 1995

the Supreme Court of India ordered the closure of hundreds of tanneries in the southern state of Tamil

Nadu because they were not treating their effluents in compliance with pollution regulations. In Tamil

Nadu more than 200 tanneries, producing 45% of India's leather, were located and a third of them were

shut down. For most of the others solution for survival meant joining together to build a common

effluent treatment plant (CETP). In fact, CETPs are very expensive facilities, whose institutions were

facilitated by public-private collaboration. Indian government advanced the framework and provided

financial and technical assistance, and shareholders are in charge of the functioning of the plants.

Usually government grants covered 50% of the total cost, tanners’ grants contributed for another

10±20% in the form of share capital, and the remainder was borrowed from lending institutions.

Building and operating a CETP requires extensive horizontal collaboration among all the supply

network partners, and CEPT experience based on collective actions helped to build a sound foundation

for subsequent cooperation among tanners with the goal of targeting environmental challenges.

The aim of this work is to offer an exemplary case study that looks for efficient and

environmentally safe solutions for the leather tanning industry based on reorganization of the entire

supply network and collaboration among supply chain actors.

Preliminary results show a significant potential of wastewater reduction, where the proposed

solutions could reduce significantly the amount of chemicals and, consequently, the amount of waste to

be treated.

RESEARCH AIM AND METHODOLOGY

The aim of this paper is to describe how to design and implement more efficient and

environmentally safe solutions for tanneries through the reorganization of their supply network. In

doing so, we adopted an action research approach (Westbrook, 1993). The project, called Eco.L.I.F.E

(Ecological Leather Innovations for Environment), is an innovative research program developed by

Gruppo Dani, an Italian leather tannery company, in collaboration with the researchers of the

Department of Management and Engineering of the University of Padova and Feltre, a company

specialized in producing machines for tannery’s processing. The scope of the project was to analyze,

design and implement some solutions, to align production processes and the supplier network structure

with company’s strategy in the field of sustainability.

In particular, the research is organized in five steps:

1. developing new tannery technologies without metals or chrome;

2. developing new liming technologies;

3. designing innovative supply network relationships for processing fresh raw hides;

4. implementing solutions proposed in activities 1, 2 and 3 to realize innovative manufacturing

processes in leather tanning;

5. results evaluation.

Management & Engineering researchers of the University of Padova are involved mainly in activity # 3

and 5 and the main objectives of this project are:

to reduce tannery environmental impact;

to design and develop new "eco-friendly" leathers, sofas and shoes;

to decrease environment-wise supply costs, in particular as for raw hides;

to propose innovative environment-wise management systems for the tanning industry,

analyzing, modelling and redesigning supply network activities and relationship, from

slaughterhouse to tannery.

In this perspective, a fruitful cooperation was set-up among all the research team. According to

Coughlan and Coghlan (2002) “the enactment of the cycles of planning, taking action and evaluating

can be anticipated but cannot be designed or planned in detail in advance”. As a consequence, the

method developed in this research emerged from iterative cycles of data gathering, feedback, analysis,

action planning, implementation and evaluation (Coughlan and Coghlan, 2002; Westbrook, 1995).

The collaboration with Gruppo Dani started in July 2010 and the research project is expected to be

fully exploited over a period of 2 years. First, researchers studied company’s context and peculiarities

and its processes by analyzing internal data/information and interviewing managers. Gruppo Dani’s

management explained in details basic production activities, markets, organization structure and order

winning and qualifying factors characterizing their tannery industrial segment. Through several

iterations, and working closely with managers, a shared way to improve the existent system has been

planned and implemented, even if it is to be adjusted many times through several evaluation stages

which – confirming Coughlan and Coghlan’s (2002) opinion. Managers, working closely with the

research team, actively contributed to data gathering, design and implementation of the proposed

solutions. The research team organized periodical meetings to examine the collected data and possible

actions that called for shared planning and consensus. This way, subjectivity, the main methodological

weakness in action research, was mitigated by having several points of view (Westbrook, 1995).

THE RESEARCH CONTEXT

The tannery sector

The expansion of the leather market all over the world is currently driven by the dynamism of

emerging markets. The increased production capacity at low cost provides a stimulus to world demand

growth in this sector. New players in the Asian countries has assumed an important role in the

production system (China, India, Korea, Thailand, Vietnam), while Eastern European countries have

received large industrial investments (Poland, Romania), and finally, some specialized tanneries exist in

Latin America (Mexico and Brazil). The world demand of hides and leathers for tannery industry has

followed a significantly positive trend over the period 2002-2006. The growth rate of activities related

to the processing of leather maintained a dynamic rhythm: a small slowdown was experienced in 2005,

but during the year 2006 there was a recovery and data of 2007 confirmed this trend. The data show

that the amount of global demand for hides and leather in 2006 exceeded 21 million dollars (DVC and

POSTER, 2007).

However, the Italian market maintains a position of undisputed leadership in tannery world market.

Data of 2009 report that Italy export covers the 32.4% of world finished leathers: almost one on three

leathers exchanged between international actors is Italian. With regard to imports, in 2009 Italy

adsorbed the 11% of the global market of raw hides and the 27.3% of semi-processed leathers.

Moreover, the value of national production affects for the 68% the European market and for the 17%

the entire world (UNIC, 2009).

However, the year 2009 was a negative one for the Italian tanning industry that already in the final

month of the previous year begun to suffer from the progressive deterioration of global economic

conditions. The decline in downstream demand and the climate of mistrust that characterized all

economic sectors led to a decline in all economical indicators. Only at the end of the year 2009 few

signals of recovery appeared. The loss of total production value was of 16.1% for a total of 3.8 million

euros. At the end of the year 2009 the sector counted 1,385 firms (-3% compared with the previous

year) for a total of 16,994 employees. The industry comes out of the period crisis of 2008-2009 with a

significant deficit in terms of production (-28% in value) substantially uniform between national and

international market (-27% of exports and -33% of national sales) (UNIC, 2009). This situation

interests the whole national leather sector but it is well known that the Italian production system

includes the presence of several districts on the territory. In Italy three districts exist specialized on

tanning: Arzignano, S. Cross the Arno and Solofra.

Gruppo Dani

Gruppo Dani is a company with a turnover of over 65 millions Euros in 2010, specialized in

providing top-quality leather for upholstery, automotive, aviation, yachting, garments, footwear and

other leather goods. The company has its origin in the early 1950's, when it started the production of

leather for the glove industry, becoming in few years an important benchmark in the Italian tanning

industry. Manufacturing activities are carried out in the plant of Arzignano, the capital of the Italian

tannery district, in the North-East of Italy, The plant, that employs 250 people, produces a large set of

different high quality leathers, fulfilling this way needs of many customers and companies of

upholstery, garments, footwear, technical footwear leathery goods, automotive, aviation and marine

industries.

Traditionally, customers are mainly in the European Union, however, American and Asian

markets have recently been growing in importance. Therefore Dani opened two branches in China and

the U.S.A too. The China branch is located in the city of Guangzhou, in the region of Guangdong, one

of the most industrialized areas in China, and in a strategic position to best serve the emerging markets.

Its mission is to promote Gruppo Dani’s products and offer an appropriate pre- and post-sales customer

service. Especially in recent years, competitive price and delivery punctuality have become significant

order winners in Gruppo Dani’s market segment. This has made production costs and delivery date

estimations even more critical. The Dani Leather USA division serves the North American markets. In

this area company’s efforts are focused on Architect & Design, Hospitality, Contract Office and High

End Residential markets. In addition Dani Leather USA is working in the Commercial and Business

Aircraft markets, as well as the Automotive aftermarket. They adopted a very strong successful sale

program, in which service is the key ingredient. From the warehouse placed in Northern New Jersey,

they are able to ship special orders within 24 hours. From the different warehouses around the world

included the headquarters in Arzignano, as well as the North American distribution centre in Flanders,

NJ, Dani is able to deliver its articles in a range of over 300 colours, available "just in time" to address

day to day needs of its customers.

Environmental Policy

Gruppo Dani’ has been always focused on launching research programs to investigate efficient

and effective management solutions to reduce the impact of tannery processes and products on the

environment. To reach this aim it is necessary to establish strong links of collaboration with the whole

leather’s supply chain, from the slaughterhouse to the final consumer.

Many activities in the field of sustainability were implemented by Dani to:

develop teaching programs for employees aimed at raising awareness in safety and

environmental issues;

promote and coordinate ecological research projects;

systematically track resources consumption and chemical usage;

check emissions of pollutants before and after treatment processes;

Interestingly enough, by-products of leather can be used in other areas, especially in agriculture.

This emphasizes the full naturalness of this product that at the end of its life is 100% recyclable.

The overall product lifecycle can be described as in Fig.1. The first step takes place in

slaughterhouses where tanneries select and buy hides. The hides are then transported as fast as

possible to tanneries where they are processed. Leather manufactures are then realized and

distributed to consumers. After useful life time of leather products, disposal takes place and finally

waste are reused for agriculture and farming.

Fig. 1. Leather Life cycle

This way the sustainable characteristics, that leather itself already owns, are well highlighted. Indeed,

leather can be classified as a long lasting, reusable and recyclable material, offering many by-products

which can be used in other industrial processing.

An open question is how to optimize these sustainable characteristics, minimizing the negative

environmental impacts.

In this perspective, the main results obtained so far from Gruppo Dani are the following:

full recover and reuse of the totality of packaging materials ;

recycle of all the paper used in plants;

reduction of water usage;

reduction of environmental impacts in the liming process, limiting the quantity of chemicals

used;

elimination of heavy metals in waste, which, this way, can be safely used as components in

fertilizers with a medium/high level of Nitrogen.

This environmental policy leads to a systematic management of environmental activities, looking for

new ways to improve the environmental compatibility of tannery processes and products. In particular,

Gruppo Dani invests many resources in activities of Research & Development, aimed at environmental

research, process and product innovation and it has always been committed to describe processes and

products through objective parameters verified by institutional bodies.

Since 1997 Dani has been certified ISO 9001. This means that all the corporate processes are

monitored to improve the performance of the entire organization. This voluntary standard confirms

Gruppo Dani’s commitment in doing efforts to meet customer needs.

In 2009 Gruppo Dani obtained the Environmental Product Balance for their upholstery

collection, which certifies company’s attention to reducing resource waste and impact of tanning

processes. They are able to verify through specific indicators that all the aspects of leather production

processes have been consistently monitored to provide complete control and continuous improvement.

Therefore their certified leathers can be defined as "eco-friendly" and Dani is the sole tannery

worldwide bearing this certification.

Moreover, in 2009 Dani’s leathers received the Italian Full Cycle certification, which guarantees

that all the production steps are carried out in their owned facilities. This voluntary standard defines a

national guide-line in accordance with the international legislation to declare the origin of finished

leathers. This means quality, excellence, style and innovation, which are typical of the Italian

production.

Gruppo Dani shows a proactive approach to environmental aspects in using natural resources

that are essential features of their production processes. They also decided to launch a project that will

eventually allow them to obtain Environmental Product Declaration (EDP) and the Ecological

Footprint of their leathers. These certifications are both based on Life Cycle Assessments (LCAs). In

particular, EPD is an eco-label defined according to the ISO 14025, which provides objective,

comparable and credible profits to the company to communicate the actual environmental impact of its

product. The Ecological Footprint is the measure of the impact that activities have on the environment

and, in particular, on climate change. It refers the amount of greenhouse gases produced during daily

activities through the use of fossil fuels for electricity, heating / cooling and transport.

Thanks to Dani Leather USA the commitment for an environmentally friendly production is

also divulgated to architects and designers. Indeed, Gruppo Dani have launched a training program

approved from “American Institute of Architects Continuing Education Systems”, that provides them

valid claims to be certified LEED (Leadership in Energy and Environmental Design).

Production Stages and Supply Networks

The production stages within a tanning process are described below and resumed in Fig. 2.

DESALINATION: The process begins with initial inspection of raw hides to assess any visible natural

markings and state of conservation. Desalination follows, when hides are placed in large drums and

washed to remove the salt used to persevere the hide from bacteria, with the least possible impact on

the environment. In the process the leather is kept submerged in fresh water, without the addition of

chemical products.

SOAKING: This stage moistens the leather and cleans it from excrements, blood, proteins and soluble

carbohydrates. It is destined to remove the chemicals in excess and replace the water of the leather.

UNHAIRING – LIMING: In this stage, coats and dermal system are removed and the leather is swelled

to facilitate its division.

FLESHING: The fleshing operation follows, which is the mechanical process of removing additional

fats and subcutaneous tissue by a machine with a rotating blade cylinder.

TRIMMING: The manual process of trimming happens to define the outline of hides by removing

unnecessary areas.

SPLITTING: Hides are sent through the splitting machine to separate the top grain (the outside of the

hide) from the split (the inside or fibre side of the hide). It is during this process that the final thickness

of the hides is established, as determined by the final product begin produced.

DELIMING: This process removes from the raw hide deposits or chemically combined alkaline

substances.

BATING: The objective of this step is remove the remaining coat and fat of the leathers, and removing

the remaining coat and fat. Moreover, the leather becomes more permeable to air and water. Later, the

leather is washed three times, aiming to remove organic substances and chemicals, mainly salt in

excess in the leather.

PICKLING: Its objective is to permeate collagen fibres to facilitate the penetration of the tanning

agents.

TANNING: Tanning begins the process of permanently stabilizing hides for durability and longevity.

To persevere the quality and natural beauty of the hides, various chemicals are introduced and the

hides, now called “wet blue”, are ready for inspection and can be classified for a particular product.

PRESSING AND WET BLUE CHOOSING: First, the wet blue hides are passed through a machine

that reduces the water content. Passing through two large roller, wet blue hides are pressed and

smoothed, allowing for a better inspection process. Next, given the requirement of specific products or

customer’s needs, the wet blue hides are split to the required or requested thickness. Finally, the back of

the wet blue hides are passed through a shaving machine to ensure an uniform thickness, by removing

uneven areas.

DRYING: The hides are suspended on a rod and a chain system which rotates around the perimeter of

the ceiling until they are properly dried. The hides are then attached manually by toggle clips to a flat

frame that stretches them in all directions and is then passed through a large dryer. Finally, the hides are

placed between canvas sheets or plates, stacked in many layers and heated under pressure to achieve a

smooth tight surface.

STAKING: This machine has hundreds of opposing steel pegs that are behind two rubber sheets. Hides

pass through rubber sheets and are pounded by steel pegs to soften the leather and smooth the hide after

milling process.

STOCK: Leather are inspected before inventory. Selection is based on specific standards established

for each batch and everything is registered within the quality control system.

Fig. 2 The Gruppo Dani’s tanning process.

Arrivals of

raw hides

Acceptance control

Storage of raw hides

Desalination Acceptance control

Unhairing , Liming

Soaking

Fleshing

Trimming

Splitting

Deliming

Tanning

Pickling

Bating

Pressing and wet blue choosing

Wet blue

Drying

Stalking

Stock

LIM

ING

T

AN

NIN

G

FRESH LEATHER SALTED LEATHER

Once pointed out the tanning production process, to understand how reorganization of the

tanning supply network could affect environmental benefits, it is meaningful to depict the “traditional”

tanning supply network.

As is it shown in Figure 3, hides can either go directly from slaughterhouses to the tannery (and

in this case they are called "fresh leather"), or pass through an intermediary, the “Salter”, that salts

hides for preservation (and in this case they are called "salted leather”).

Fig. 3 Traditional salted/fresh leather supply network

The production data of 2010 show that Gruppo Dani worked 14,800 tons of raw leathers, that

can be fresh or salted, corresponding to 1,350 tons/month or 55 tons/day (see Table 1, where hypothesis

is company works six days a week, over a period of 11 months, since the centralized treatment plant for

tanneries in Arzignano is closed in August).

Salter

Tannery

SALTED LEATHERS

FRESH LEATHERS

Slau

ghte

rho

use

s

Jan + Feb + Mar

2010 Apr + May + Jun

2010 Jul + Aug + Sep

2010 Oct + Nov + Dec

2010 Total 2010

Quantity of raw leather 3923 3730 2642 4527 14822

Fresh leather 1595 1165 849 1838 5447

Salted leather 2329 2566 1770 2689 9354

Tab. 1 Tons of raw leathers worked by Dani in 2010.

In particular, in 2010 Dani worked: 5,450 tons of fresh raw hide (37% of total) and 9,350 tons of salted

raw hides (63% of total). Over the months, the percentage of fresh of raw leathers ranged from a

minimum of 21% of the total purchasing per a quarter to a maximum of 41% (see Table 2), mainly

because of the price and availability of leather at the slaughterhouses.

Jan + Feb + Mar

2010 Apr + May + Jun

2010 Jul + Aug + Sep

2010 Oct + Nov + Dec

2010 Total 2010

Fresh leather 41% 31% 21% 41% 37%

Salted leather 59% 69% 45% 59% 63%

Tab. 2. Percentages of fresh and slated leathers worked by Dani in 2010

The weight of a hide varies from 23-26 kg for a "cow" type to 40-50 kg for a "bull" type. Based on a

preliminary analysis, it can be assumed that in 2010 the average weight has been around 35 kg/leather.

It follows that Dani has worked 38,500 hides per month or 1600 hides/day.

Regarding the fresh leathers, assuming that average weight for each delivery is 20 tons, an estimate of

the distribution of arrivals over the year is shown in the Table 3.

Jan + Feb + Mar 2010

Apr + May + Jun 2010

Jul + Aug + Sep 2010

Oct + Nov + Dec 2010

Total 2010

Arrivals 79 58 42 91 272

Tab. 3 Numbers of 20 tons arrivals of fresh leathers at Gruppo Dani in 2010

THE ECOLIFE RESEARCH PROJECT: PRELIMINARY FINDINGS

The main differences between the fresh and the salted leathers supply networks are two. The

first one has important and direct impacts on environmental issues.

Indeed, the process of desalination for salted leathers has, as described above, a huge negative

effect on environment and, for this simple reason, a reorganization of the tanning supply network able

to eliminate or limit this phase would be greatly appreciated.

The second difference relates to leather delivery times from slaughterhouse to tannery and to

storage times before following processing begins. In the case of fresh raw hide, in fact, delivery must

take place within a few hours to avoid leather deterioration, and also storage time in tannery’s

warehouse must be very short. These limits do not exist, instead, for salted raw hides. But, in the latter

case, operations performance, in terms of costs of inventories, velocity / quick response and level of

service, are inferior.

Our research aims at providing an innovative Supply Network model that streamlines some

phases of production, skipping SC intermediaries and avoiding non-value-added activities (i.e. the

salting) and increases collaboration between tanneries and suppliers to achieve a better level of

partnership.

The proposed model is showed in Figure 3.

Fig. 3 New salted/fresh leather supply chain

As it can see from the new model all the hides, which will be only fresh leathers, come directly from

slaughterhouses to tannery, bypassing the salting phase made by the intermediate salters.

However this new model, that brings evident benefits both in environmental and operational

performance, requires fundamental changes in the supply network structure to work.

The first issue to be considered is that the tannery needs to find a suitable network of slaughterhouses

able to collaborate and supply. The challenge is therefore to find the “right” (i.e. in numbers and

locations) slaughterhouses that will able to cover the entire daily requirement of hides for tanning. Most

slaughterhouses are in fact small, and then it will be necessary to collaborate with more than one to

meet the daily and total requirements of hides (see Table 1, 2 and 3), also keeping in mind

minimization of stocks because fresh leather’s high perishability.

On the slaughterhouses’ side, the main problem is disposing hides, even for small size animals. To

overcome this constrain, tannery should be committed to collect daily all the hides provided by

Tannery

FRESH LEATHERS

Slau

ghte

rho

use

s

slaughterhouse, even if the batch size is small and doesn’t reach the optimal target dimension for the

tannery.

Therefore goal of the project is identify the best partnership agreements between

slaughterhouses and tannery to enable and nurture the cooperation necessary for effectively

implementing the innovative supply networks. In order to get this, first an updated map of the

“capacity” offered by each available slaughterhouse is provided. Second, slaughterhouses are also

identified by optimal location. To get this, operational research techniques are applied to select the

slaughterhouses that are sufficiently close to the tannery to, on one side, maximize daily truck loads

adopting a JIT delivery system and, on the other, minimize total transport times, to do not damage the

fresh leathers during transport.

It will be provided an algorithm that identifies the transport flows and the appropriate number of trucks

to be used in order to:

maximize operations capacity of the tannery;

minimize transport times of fresh hides from slaughterhouses to the tannery;

Simultaneously, all the necessary infrastructure and equipments for processing fresh leathers

will be developed in the tannery. In particular, a semi-automated system for receiving, sorting, storing

and launching into the production processes fresh leathers will be developed ad hoc.

1) In particular: the equipment for receiving fresh leathers will include:

• a system to receive hides from trucks;

• a transport system;

• a system to unwind and loosen leathers, allowing their enlargement and then the following coupling;

• a system to join leathers coupling in the transport line that will bring leathers to operators

responsible for quality inspection, cleaning and trimming

the equipment for selection and cleaning of fresh leathers will include:

• a semi-automatic system for selection of raw hides based on parameters such as sex, weight, defects;

• a real time weighing system for leathers on the move;

• a leather labelling system using microchip and a radio-frequency data transmission system;

• a transport system to deliver leathers to cold warehouses.

2) the equipment for fresh leathers processing (soaking-unhairing-liming) will include:

a system for selecting the appropriate type of leather for a specific work;

a system for releasing leathers from the cold warehouses;

a transport system toward barrels of liming;

a final weighing system for leathers.

Eventually, the research aims at getting an inversion of the data reported in Table 2. The use of fresh

leathers will significantly increase, while salt leathers will decrease. This way the environmental

impact caused by Gruppo Dani tannery on the territory will greatly diminishes too. The project will

offer not only qualitative but also quantitative evidence of this process, through the design of a

selected set of key performance indicators that will measure the environmental impact of tannery.

Finally the new proposed model for reorganization of tanning supply networks will provide

fresh insights on how increased collaboration among leading supply chain partners allows

implementation of innovative technologies that minimize environmental impact, on one side, and help

to reduce throughput time, on the other.

CONCLUSIONS

The aim of this research is to look for innovative efficient, agile and environmentally safe processes in

the tanning supply networks. An action research in an Italian tannery is conducted to redesign its

supply network, in particular focusing on the degree and type of partnership between the tannery and

upstream suppliers (i.e. slaughterhouses).

Very strict environmental laws constrains this industry, regulating sewage reuse and water purification

and reducing the quantity of chemicals to be used in production. These laws motivate research to

develop new tanning technologies to fit in the standards of emission normally demanded by the

environmental legislation. However, this study shows how process innovation goes hand in hand with

managerial innovation within the industry. An innovative design and reorganization of the Supply

Network, that clearly defines roles and collaboration’s degree of all stakeholders, seems to be a feasible

answer to improve both environmental and operational performance.

Preliminary findings confirm that increased collaboration among leading supply chain partners allows

implementation of innovative technologies and new relationship that, eventually, generate

complementary benefits on both the green and the competitive sides of the entire supply network. This

preliminary research stage will became the basis for developing a framework and operative tools that

will support and drive reorganization of tanning supply networks.

REFERENCES

Coughlan, P. and Coghlan, D. (2002), “Action research for operations management”, International

Journal of Operations & Production Management, Vol. 22 No. 2, pp. 220-40.

DVC – Distretto Vicentino per la Concia, POSTER – Istituto di ricerca e formazione, (2007),

Trasformazione della domanda e strategie di risposta del distretto conciario di Arzignano.

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