Final thesis presentation. Presented in May 2007 at Pratt Institute, Design Management Department by Michael Melnick, Nicole Casey and Melanie Cohen How can Design Management help identify creative assets and strategically allocate them to make improvements for the global leather Industry?

1. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century Pratt Institute | Design Management 2007 | Melanie Cohen | Nicole Casey | Michael Melnick Copyright © 2007

2. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century OBJECTIVE #1 Identify issues within and surrounding the global leather industry and their impact on three fundamental levels: people, planet and profit. OBJECTIVE #2 Make recommendations as to how can design management help identify creative assets and strategically allocate them to make improvements for this dormant industry. OVERVIEW Copyright © 2007

3. HISTORY OF LEATHER Mans relationship with leather dates back to very early civilization ANCIENT TIMES INDUSTRIAL REVOLUTION Chemical Agents Technological Innovation Mass Production Capabilities MODERN TIMES Nothing to Hide New Frontiers in the Leather Industry for the 21st Century OVERVIEW Copyright © 2007

4. The global Leather is a multi billion dollar industry. Estimated value for the U.S. industry in 2005: ~$102,292,000,000 Leather is everywhere. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century OVERVIEW Copyright © 2007

5. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century THE LEATHER MANUFACTURING PROCESS OVERVIEW ANIMAL HUSBANDRY AND SLAUGHTERING RENDERING AND FLAYING LEATHER TANNING BEAMHOUSE TANYARD RETAN COLOR FATLIQOURING FINISHING Copyright © 2007 RAW MATERIAL FINISHED PRODUCT

6. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century THE LEATHER VALUE CHAIN OVERVIEW COMMODITY Copyright © 2007 LUXURY PRODUCT

7. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century OVERVIEW THE LEATHER VALUE CHAIN COMMODITY Copyright © 2007 LUXURY PRODUCT

8. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century ECONOMIC OVERVIEW OVERVIEW Price and supply are highly influenced by external factors driving the meat industry such as Climate, disease, trade tariffs, regulations and consumption. The U.S exports more than 50% of its hides to be processed overseas under less stringent regulations. EXTERNAL FACTORS COMMODITY Copyright © 2007 LUXURY PRODUCT

9. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century ISSUES ECONOMIC Fragmented Value Chain Global Competition Trade Tariffs Climate instability Rise in Agra-Commodity Prices ENVIRONMENTAL Air / Land / Water Pollution Water Waste Unregulated disposal of Chemicals Animal Cruelty & Hide Breeding Carbon Emissions SOCIAL Health Concerns Child Labor Labor Rights / Sweatshops Migrating industry Unaware consumers Copyright © 2007

10. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century THESIS QUESTION How can Design Management help identify creative assets and strategically allocate them to make improvements for the global leather Industry? ISSUES ? ECONOMIC ENVIRONMENTAL SOCIAL Copyright © 2007

11. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century RECOMMENDATIONS APPROACH The Hide is the first creative asset in the Leather value chain. Therefore, any attempt to create a more sustainable value chain must start at the source. Copyright © 2007

12. 1. TRACEABILITY SINGLE COW MONITORING (SCM) By identifying the origin you can start identifying all the following steps in the value chain. Closely monitor and control quality, health, environmental footprint and create sustainable tanning practices on a global scale. Provide a foundation for building better post consumption systems. Establish a platform for Informing consumers, building trust. Impact on related industries (Meat, Dairy etc.) Nothing to Hide New Frontiers in the Leather Industry for the 21st Century RECOMMENDATIONS TRACEABILITY Copyright © 2007

13. 2. LABELING What does “Made in Italy” mean anyway? A Universal Standard - Setting global industry criteria to be used for labeling products manufactures across borders. Encourage Transparency Build trust among consumers Create innovation opportunities Nothing to Hide New Frontiers in the Leather Industry for the 21st Century RECOMMENDATIONS LABELING TRACEABILITY Copyright © 2007

14. 3. CERTIFICATION Global Leather Certification Program Backed by the UN and ITC Following the trend of CSR, environmental sustainability and economic viability delivered through the collaboration of Industry, government and NGO’s. Creating opportunities for innovation and building sustainable strategic advantage in a dormant industry. Incentive programs for early adopters. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century RECOMMENDATIONS LABELING TRACEABILITY CERTIFICATION Copyright © 2007

15. 4. CONSUMER AWARENESS “ What do you stand for?” Or “ Where does it come from?” “ What damage was inflicted on the world?” The key in driving a shift in the industry and closing leather’s lifecycle full circle is: C onsumer knowledge Mass Purchasing power A platform based on traceability, labeling, certification and consumer awareness education programs can lead to a new kind of consumer. Creating change across the entire value chain. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century RECOMMENDATIONS LABELING TRACEABILITY CERTIFICATION CONSUMER AWARENESS Copyright © 2007

16. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century RECOMMENDATIONS 5. ECO SYSTEM APPROACH It is essential to look at the leather industry as one whole system. A lifecycle approach from the breeding of the cow to the recycling of the leather goods. “ One Economy One Ecology” “ Everything is connected – Everything matters” “ For one product to be sustainable the whole system must be sustainable”. Bruce Mau Massive Change LABELING TRACEABILITY CERTIFICATION CONSUMER AWARENESS ECO SYSTEM Copyright © 2007

17. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century RECOMMENDATIONS The leather industry can gain a strategic advantage through economic, environmental and social well being as a result of consumers being faced with the power to make informed decisions and buy or ban a product based on it’s true nature. This approach supports the UN Millennium Goals by: Ensuring environmental sustainability and developing a global partnership for development. Copyright © 2007

18. Nothing to Hide New Frontiers in the Leather Industry for the 21st Century Thank you. Pratt Institute | Design Management 2007 | Melanie Cohen | Nicole Casey | Michael Melnick Copyright © 2007