Ever wondered who actually makes your clothes and how fashion's supply chain impacts workers' lives?

This deep dive unpacks how fashion production works and explores what’s needed for meaningful change in the industry.

FashionUnited interviewed Kim van der Weerd, a former factory manager with a background in human rights, who advocates for a fairer supply chain and collaborates with various organizations to address inequity in the sector. Through her podcast Manufactured, she promotes fairer partnerships between brands and manufacturers and addresses the impact of production systems on people and the environment.

1. How are fashion collections/apparel collections produced? What does the fashion supply chain look like? Who are the manufacturers, producers and suppliers?

The production of clothing collections involves an intricate network of relationships, roles, and processes that bring designs to life.

"The line between a 'brand' and a 'supplier' isn’t as clear-cut as it might seem," Van der Weerd starts. "Typically, brands focus on designing, marketing, and selling products, while suppliers handle manufacturing the actual garments. But in reality, these roles often overlap. Many suppliers now offer design and product development services and even sell directly to consumers in their own domestic markets.”

The term supplier varies by context. Van der Weerd: “It's a flexible term depending on its relationship to other entities in the supply chain.”A textile factory might be a supplier to a clothing brand, selling finished fabric. That same textile factory buys raw cotton or synthetic fibers from another entity, which is then its supplier.

Van der Weerd aims to provide a simplified example of the fashion supply chain: “When a fashion brand creates a collection, it usually partners with a so-called cut-and-sew factory to produce the garments,” she states.

Also called cut, make, trim (CMT, ed.).

“This factory buys fabric from a fabric mill, which might work with the brand on fabric designs but mainly supplies the factory. The fabric mill, in turn, buys yarn from a spinner, who sources cotton or fibers from traders or sometimes directly from a grower or a ginner.”

Be aware, the clothing supply chain can look more complicated than this relatively simple example. “Some cut and sew factories do it all—from spinning yarn to making finished, ready-to -wear clothes— this is called ‘vertically integrated operations’, while others only handle certain steps.”

In other cases a clothing brand buys through an intermediary like a trader or agent. “Therefore the fashion supply chain possibilities and combinations are endless.”

2. How do complex supply chains and outsourcing contribute to ongoing social issues, such as poor working conditions or low wages for garment workers, in the fashion industry? Is more transparency a solution?

In today's fashion industry, very few clothing brands produce their own garments. Instead, they rely on other companies (“the suppliers”) to manufacture their collections, a practice called outsourcing.

The fashion industry often attributes the persistence of poor working conditions and human rights violations to the complexity and length of its global supply chains, with each state of garment creation often outsourced to different suppliers, often in regions with minimal regulatory oversight.

But this argument ignores the fact that brands choose to have these complicated systems, Van der Weerd states. “The fashion industry’s long, complex supply chains are a deliberate choice by brands and retailers rather than an inherent necessity. They’ve opted to minimize financial risk for themselves by offloading it onto their supply chains. The suppliers, in turn, offload risk (for example, through subcontracting, outsourcing, and short-term contracts) until, ultimately, it lands with the most vulnerable.”

“Simply making these supply chains more transparent doesn't solve the core problem. The system itself encourages bad behavior because it is designed to minimize risk for brands and retailers at the expense of companies throughout the supply chain. Even with good intentions, it's hard for companies to act ethically within this structure,” Van der Weerd states.

”When human rights abuses come to light, brands often say it's difficult to monitor such long supply chains and it’s hard to check up on everyone. But they never mention that the reason these supply chains are structured this way in the first place is because it benefits them.”

Van der Weerd argues that we need to shift our perspective. “Instead of focusing only on the bad actions of individual factories, we need to recognize how brands design these systems to protect themselves while putting workers at risk.”

3. Are there risks involved in garment production? How so? And who bears the risk?

Brands provide factories with a forecast, which is an estimate of how much they think they’ll buy from their suppliers, explains Van der Weerd.

The factory uses this forecast to decide how many people to have on staff and how much material to buy to meet expected demand.

But these factories usually don’t get many guarantees from brands, Van der Weerd emphasizes. “Hiring people and buying materials are irreversible financial decisions that a factory manager must make well in advance of receiving confirmed orders.”

“In other words, suppliers disproportionately shoulder the financial risk,” the expert states. “A factory owner once compared his role to a bank because he was financing production costs six to nine months before getting paid by the brands.”

In depth: the complexities and financial risk of supply chain planning in the fashion industry

Van der Weerd: “Below you find a visual example of a garment ‘recipe’ from the perspective of a cut-and-sew factory. This specific T-shirt (called T-shirt A) requires several ‘ingredients’.”

“Each of these materials is sourced from different suppliers, with each supplier having its own lead time (the time it takes from placing an order to delivery, ed.) and minimum order quantity, or MOQ (the smallest number of units a supplier accepts for a single order, a common practice in the fashion sector, ed.),” she explains.

“The next visual (below) shows how a factory needs to plan ahead to meet production deadlines,” says Van der Weerd.

“Three weeks before the goods have to exit the factory, the purchase order (this is the firm commitment from the brand to buy a certain number of pieces!) comes in, as you see indicated by the bright pink block.”

“However, if the factory manager waits for this purchase order to start ordering fabric and materials or hiring staff, they will miss the deadline due to the suppliers’ lead times. To ensure materials arrive on time, the factory must place orders in this example approximately 19 and 6 weeks in advance, as shown by the purple blocks.”

And this planning process happens at every level of the supply chain, Van der Weerd emphasizes. Each supplier must prepare inventory in advance based on lead times and minimum order quantities.

The requirements for lead times and MOQs at each level of the supply chain determine the total amount of materials or products produced throughout the entire chain, as well as the overall time it takes to complete the production process from start to finish (total supply chain lead time).

The cascading effect of lead times and MOQs: suppliers stockpile

To meet the short lead times demanded by brands, suppliers throughout the supply chain must hold excess inventory at every step of the chain, Van der Weerd explains.

“For example, if a brand forecasts it will need 100 shirts, each supplier along the chain—yarn, fabric, and garment production—must prepare enough materials for 100 shirts to fulfill that forecast in advance.”

“If they did not do this, they would risk losing orders,” the expert underlines. “This means that suppliers disproportionately, relative to their margins, assume the financial risk of market volatility/changes in consumer demand. It’s also a suboptimal system outcome because there’s increased financial risk for most actors (except the brands), as well as waste/overproduction.”

4. Usually the conditions of garment workers who work in factories where our clothes are made are not good and they are paid a pittance. How does that work? Why do garment workers sometimes not even get a living wage? Why can't the minimum wage be increased etc? What is needed for that?

The low wages and poor conditions of garment workers are often justified by the need to meet the fashion industry's cost targets. According to Van der Weerd, the real issue lies in factories’ need to keep resources fully utilized amid fluctuating demand.

“When I was a factory manager, idle resources - whether materials and/or workers—were what kept me up at night,” she states. “When I use the term idle, I mean idle resources stemming from forecast deviation — when actual orders from brands are not aligned with their predictions.”

To illustrate, van der Weerd describes a factory where ‘the most efficient’ setup produces 100 shirts per hour with 20 people on staff. “If demand suddenly drops to 50 shirts per hour, the factory must pay for idle time. Nothing within the four walls of the factory has changed—nobody has been hired or fired—but the labor cost per piece has doubled.” She argues that this fluctuation in demand has a greater impact on costs than the (small) wage increases that activists tend to focus on.

“It’s inevitable that forecasts are wrong,” van der Weerd clarifies, “but brands don’t bear the costs of forecast inaccuracies since they aren’t directly paying for labor or materials. “Brands pushing the risk of unsold inventory down to their suppliers is what creates the incentive to subcontract, to keep labor cheap and flexible. Factories in turn, cope with this unequal distribution of financial risk by pushing it down even further: to workers and/or subcontracted facilities.”

Van der Weerd suggests that a solution lies in shared financial risk. If brands shared the costs of idle resources, they would be motivated to keep factories consistently loaded, reducing the need for subcontracting and enabling higher wages, she emphasizes.

5. How has the rise of fast fashion impacted the clothing industry? Is it true that fashion brands are demanding lower prices and at the same time expect higher quality and faster delivery?

Yes, clothing brands today want lower prices while demanding better quality and faster delivery, the expert confirms.

Van der Weerd explains that the fast fashion narrative often leads people to assume that longer lead times would be a solution—yet this is a misconception. “The reason production staff have to work overtime or are squeezed to get an order out is usually due to unexpected changes to orders relative to forecast, not because there simply aren’t enough hours initially,” she notes. “Tight timelines are a symptom, not the root cause.”

Lead time: the period from design to store delivery and making the clothing available to consumers

Van der Weerd emphasizes that while striving for more accurate forecasts is beneficial, it's unrealistic to expect perfect predictions of consumer demand, because 'nobody has a crystal ball'.

The critical issue, she notes, is determining who bears the cost when forecasts are incorrect and whether this cost distribution is equitable relative to profit margins.

“One way to do this is by creating pricing models that reward [brands for] accurate forecasts,” the expert suggests. “Another approach is to push brands to commit financially to at least 50 per cent of their predicted demand for a period matching the supply chain’s lead time.”

Sharing risks and rewards more equitably across the supply chain would naturally lead to shorter forecasting horizons, leading to more accurate predictions ('as it's easier to anticipate near-term demand than demand six months ahead').

6. How do you know who produces more sustainably - with an eye for people and the environment? - Is there such a thing as 'ethical suppliers'?

Van der Weerd says that focusing solely on “ethical suppliers” overlooks the systemic issues that make sustainable practices challenging.

She also explains that unsustainable practices are often due to the constraints of the operating context rather than a lack of good intentions. “Companies often act unsustainably not because they don’t care, but because the system they work in makes it nearly impossible to do otherwise. Just like we all do things every day that contribute to collective outcomes none of us wants,” she compares.

“While some manufacturers might be a little better than others, they’re often just varying degrees of “less bad.” That’s not because they don’t have the right values—it’s because they’re stuck in a system that makes sustainability really hard.”

According to Van der Weerd, rewarding companies that are doing their best is great, but it won’t create the big changes the industry needs. “Real change needs collective action—it requires brands and suppliers working together to change the system itself.”

This is why Van der Weerd is skeptical about using sustainability as a “market differentiator” or a selling point; to her, it doesn’t address the root cause of unsustainable practices.

7. What is the ultimate solution when it comes to improving things in terms of production? Should clothing brands start doing their own production?

“Great question. Should we even have supply chains at all? Is vertical integration the way to go? Maybe,” Van der Weerd answers.

While it might seem beneficial, she explains that there are still valid reasons to outsource production. “For example, producing everything in-house would require significant financial investment, which may not be practical for a single brand’s demand. Additionally, outsourcing can provide access to specialized expertise and local knowledge in areas where people rely on the global fashion industry for their livelihoods.”

Van der Weerd believes that the real issue isn’t whether brands produce in-house or outsource but rather the inequity in how financial risks are distributed across the value chain, as mentioned before. She highlights this with the example of unsold products, asking, “When a T-shirt doesn’t sell, who pays for it? And is that equitable relative to the margins?”

She argues that any effort to improve the fashion industry should consider whether financial burdens are fairly distributed. Finally, Van der Weerd points out that most sustainable fashion initiatives, whether voluntary or legally required, fail to address this issue of value chain inequity.

This interview was conducted in written format, in October 2024. Kim van der Weerd answers were provided in detail. Small edit done by Esmée Blaazer.

Sources:
- Input Kim van der Weerd, former clothing factory manager and now sustainable fashion/practices advocate, writer, podcast co-host, and consultant, in October 2024.
- Input sustainability journalist Simone Preuss in November 2024.
- Previously published background stories from FashionUnited (linked in the article text).
- AI tools such as Gemini 1.5 and ChatGPT 4o were used by the author of this piece to assist with creativity and/or rephrasing.