Back in the 1950s, nearly 100% of the clothes sold in the US1 were made in the US. In 1990, this number dropped to 50%1. Today, only 2% of US clothes1 are still made in the US. Clearly, the supply chain of the fashion industry has moved overseas.
According to Cotton Incorporated, over 48 billion pounds of cotton is produced every year2. The top three worldwide producers of cotton are India, China, and the United States. The United States is the number one exporter of cotton, exporting over 70% of its production, which will then reenter the US either as a fabric or as a product.
Garment factories are mostly located in China (40,000 factories) and India (4,000 factories)1, where India has the lowest cost of labor with a monthly average wage of $37 per worker, versus $200 in China1.
The cotton supply chain can be broken down into 8 steps:
- Raw cotton production
- Trader buys raw cotton from several farmers and combines all products into bulk before selling them to factories
- Factories extract the seeds, cleans the bolls, and spin the fibers into thread
- Trader buys spools of thread to be sold to mills
- Mills produce and dye the fabric
- Trader buys the fabric to sell to manufacturers
- Manufacturers create the products/textiles for retailers
- Products appear on shelves at the retail store
In addition, we need to consider the transportation systems required to convoy the products from one company to the next. Many facilities and intermediates are involved in the cotton supply chain. They are usually located in different countries, complicating the supply chain and adding more layers of confusion regarding, for example, the product’s country of origin.
One of the most recent examples of cotton supply chain disruption occurred with Target supplier Welspun India Ltd, which produces Egyptian-cotton sheets3. However, Target discovered that these “Egyptian-cotton” sheets were not made of cotton produced in Egypt. Target has since removed all textile products made by Welspun India Ltd from its shelves and has begun refunding millions of dollars to their customers – potentially up to $90 million – putting a very real price on this transparency issue4. Other retailers working with this supplier, such as JCPenney, Bed Bath & Beyond, and Walmart, are now investigating the origins of the cotton used in their products. This shows how just one supplier can impact many other companies, in this case retailers.
Trends in the fashion industry are changing. Consumers want to know who made their clothes and where their clothes come from. Today, more initiatives are taking place in the fashion industry to improve supply chain visibility, such as the #whomademyclothes hashtag, Chetna Organic5, a company that works with small and marginal farmers to improve their livelihood and make farming a sustainable and profitable occupation, and the Sustainable Apparel Coalition6 (SAC), which promotes sustainable production for the apparel, footwear and home textile industry. SAC’s is primarily based on the Higg Index, a standardized supply chain measurement tool that helps all members of the coalition to understand the environmental, social, and labor impacts of making and selling their products and services. Action needs to be taken at every step of the supply chain in order to follow the information from source to store.
1 Ethical Fashion: Is The Tragedy In Bangladesh A Final Straw?, NPR. 05/02/2013 http://www.npr.org/2013/05/02/180557959/ethical-fashion-is-the-tragedy-in-bangladesh-a-final-straw
2 Monthly Economic Newsletter, Cotton Incorporated. August 2016 http://www.cottoninc.com/corporate/Market-Data/MonthlyEconomicLetter/pdfs/English-pdf-charts-and-tables/World-Cotton-Production-Bales.pdf
3 Target Cuts Ties With India Textile Company, Preetika Rana. 08/22/2016 http://www.wsj.com/articles/target-cuts-ties-with-india-textile-company-1471868605
4 Target Refunding Millions of Dollars Worth of Sheets Found to be Phony Egyptian Cotton, NBC Chicago. 08/24/2016 http://www.nbcchicago.com/news/local/target-refunding-millions-of-dollars-worth-of-sheets-391057772.html
5 Chetna Organic. http://www.chetnaorganic.org.in/
6 Sustainable Apparel Coalition. September 2016. http://apparelcoalition.org/the-coalition/