Fashion Supply Chains

From an oil rig worker on the Canadian coast to a cotton spinner in Uzbekistan – hundreds of people can be involved in producing one item of clothes. 

Where do clothes sold in the UK come from?

The UK imports around £20 million worth of clothing from countries around the world every year. Around half of this comes from China, but Bangladesh, Turkey and other European countries such as the Netherlands and Italy also supply significant quantities.

These figures, though, only show part of the story. While clothes always have to say where they were produced, the ‘made in ...’ label only covers the final stage of production, where the clothing was completed and exported.

In fact, the production of a simple white cotton t-shirt or jumper often spans the globe, with numerous companies and potentially hundreds of workers involved in the process. And numerous countries could have supplied raw materials like wool or fossil fuels for plastic clothing, processed these materials into fabric, or provided other components like buttons, zips or buckles.

India is the world’s biggest cotton producer. Taiwan, Korea and other countries produce polyester. Little is even known about where fossil fuels for plastic clothing production come from, but the biggest producers of crude oil include Saudi Arabia and Russia. Synthetic fibres like polyester are made from petrochemicals.

Why does it matter where clothes are produced?

Unfortunately, the clothing industry is notorious for abuses – from serious violations of workers’ rights to massive greenhouse gas emissions. The more we understand about where clothing is produced, the more we can do to identify, remedy and ultimately prevent problems.

Issues will vary around the world: for example, in some countries factory workers receive poverty wages, while in others, companies are allowed to dump toxic chemicals into rivers or waterways.

NGOs and intergovernmental organisations, retailers and consumers can all act on risks, once understood at a country or regional level. They can ensure that workers and communities have support.

For example, governments in both China and Turkmenistan sanction the use of forced labour in cotton picking. Companies have therefore been called on to identify and eliminate cotton from the regions involved.

Unfortunately, we usually know very little about where our clothing is made. Very few companies publish information on which manufacturers they use, let alone where the raw materials are produced. For this reason, companies rarely have to take responsibility for funding and profiting from violations. It is often impossible to link retailers in the UK to violations abroad.

The journey of a simple cotton t-shirt

For a cotton t-shirt, the supply chain begins with a farmer, in this example from India, the world’s largest producer of cotton which is estimated to grow 6,205,000 metric tonnes each year.

The farmer will plant their cotton seeds between March and May and harvest the cotton in November. Cotton is grown by a mixture of big plantations and smallholder farmers. Big plantations rely on hired workers, including additional seasonal labour at harvest time; whilst smallholders rely mainly on family members, but also other members of the community, occasionally hire some extra hands but often labour using exchanges.

Once the cotton has been grown and harvested, it is sold in wholesale markets. Next, the cotton is purchased by retailers, who will take it to a ginning and pressing mill to be processed. Here, the cotton will be removed from its pods, and turned into cotton lint for shipment overseas.

Cotton exporters will transport it to China, where it is again sold on and passed between spinners, to dyers and then to weavers to be turned into fabric. By this stage, the cotton is ready to be sewn into garments for wearing.

This t-shirt is going to be tailored in Bangladesh, so fabric exporters will again ship the material overseas where it will be purchased for use in factories. About 10% of the UK’s clothing is imported from Bangladesh each year.

Even these garment factories are often not owned by the t-shirt brand itself, which will instead contract local suppliers to make different designs. Tailors will sew the garment following specifications sent by the t-shirt brand. This stage determines the ‘Made in’ label – so the t-shirt will say ‘Made in Bangladesh’. Then it is shipped for sale in the UK.

This account is a linear version of a supply chain – from cotton field to shelf – but the reality is of course far more complex. Big companies won’t just use a single person or supplier at each stage: multiple cotton farmers will grow the raw material that the cotton spinner turns into yarn; just as multiple spinners will provide the yarn for weaving into fabric.

In fact, the explanation given above hasn’t even considered the non-cotton elements of the t-shirt’s design: for example, the origin of the dyes or the thread that are also part of its production. Or all the inputs that are used, for example, to grow the cotton, such as pesticides or fertilizers and their supply chains. It is usually more accurate then to think of a supply pyramid than a chain, with multiple elements, people and locations contributing to a final product.

While the brand that we recognise is responsible for sale and design, they may not oversee any of the production themselves. Each stage can be outsourced to other companies known as their suppliers.

What are the benefits of an ethical supply chain?

Large companies can wield a huge amount of power. If their purchasing practices put pressure on suppliers to speed up production and lower the costs, this routinely leads to worse conditions for workers and the environment. 

But if companies support and reward suppliers who are pursuing good practice, conditions can improve. 

Benefits of an ethical supply chain for workers

In many countries, national laws protecting workers’ rights are very weak: much weaker than international human rights laws or conventions demand. Child labour from the age of 14 is in some places permitted, unionisation banned, or certain forms of bonded labour allowed. Even when suppliers are actually breaking the law, many governments lack either resources or the impetus to enforce penalties.

For workers, then, ethical supply chains are not just beneficial but vital. At the very minimum, they protect human rights. At their most effective, they incentivise suppliers to go beyond the baseline: for example providing child care, paying a decent wage, or giving education and training.

Benefits of an ethical supply chain for the environment

The same principle applies in terms of the environment. Many practices that cause serious environmental harm are legal or the authorities will turn a blind eye. But ethical supply chains alter the economic incentives. They make environmentally unsustainable practice economically unsustainable too. For example: if companies with ethical supply chains all selected green energy suppliers, coal and oil companies would increasingly lose out. The fossil fuel industry would become less viable.

More effective ethical supply chains will again go above and beyond this. They will disincentivise processes that put a long-term strain on the natural world, such as the ongoing use of agrochemicals.

This pressure can have a ripple effect: if companies require suppliers to have ethical supply chains too, respect for workers’ rights and the environment will spread through the pyramid as a whole.

How companies benefit from an ethical supply chain

But it is not only the environment and workers that win. Aside from the ethical obligation not to profit from abuses, companies themselves can benefit.

It is increasingly normal for companies to consider ethical and reputational ‘risk’ in financial projections for the following year. This shows that abuses in a supply chain come with a real financial cost.

If NGOs or national press discover problems in a company’s supply chain, that company can take a real hit. Ethical supply chains protect companies from losing their reputation in this way, and all of the customers and profit that go with it.