Understanding the Cotton Supply Chain

liz muller, llc

www.lizmuller.com

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Background

  Cotton cultivation can have negative environmental and social impacts. These range from water
and chemical usage to child and bonded labor.

  Companies, especially global brands, are increasingly interested and/or pressured to promote
sustainability throughout their supply chains.

  Corporate social responsibility (CSR) encompasses an wide array of social and environmental
issues.

  Existing/developing agricultural initiatives are developing supply chain systems to promote and/
or track sustainable commodities through the supply chain.

  The cotton supply is complex and involves many players. Sustainable commodity systems will
require participation throughout the chain.

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Basic Cotton Supply Chain

Flow of cotton lint

Yarn Fabric Product

Grower Gin Retailer Consumer
Spinner Mill Manufacturer

A product’s supply chain is typically thought to be linear - a simple string of value chain actors that
transform a raw material into a final product. For cotton, this involves 1) picking the cotton boll, 2)
separating the lint from stems and other materials (ginning), 3) spinning the lint into yarn, 4) knitting or
weaving the yarn into fabric, 5) converting the fabric into a final product, 6) distributing and selling the
product, and, finally, 7) using the product.

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Regional Cotton Supply Chain

Spinner A Cut & Sew Retailer A

A
Spinner B Fabric
Farmer A Gin A Mill A
Spinner C
Cut & Sew Retailer A
Farmer B B
Middle Man

Trader
Spinner D
Fabric
Farmer C
Gin B Mill B Cut & Sew Retailer A
Spinner E C
Farmer D

Spinner F
Farmer E
Fabric Cut & Sew
Gin C D Retailer A
Spinner G
Mill C
Spinner H
Cut & Sew
In reality, cotton travels through a much more complex supply chain.
E Retailer A
A gin receives cotton from multiple growers.

•  Merchants (traders) buy cotton from far reaches of the world and sell it through global markets.

•  Spinners use a mixture of cotton that ranges in origin and quality (and cost) to produce yarn.

•  Fabric mills take a similar approach to produce a final fabric.

•  Garment manufactures may have subcontractors dye, launder, or embellish their product.

•  Retailers may source the same product from a variety of garment manufacturers.
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Global Cotton Supply Chain (it is really a web)
Region A Region B
Spinner A Cut & Sew
A Spinner A Cut & Sew
Spinner B Fabric A
Farmer A Gin A Spinner B Fabric
Mill A Farmer A Gin A
Spinner C
Cut & Sew Mill A Cut & Sew
Farmer B B Spinner C
Farmer B B
Middle Man

Spinner D Fabric

Middle Man
Farmer C Gin B Farmer C Spinner D Fabric
Mill B Cut & Sew Gin B Cut & Sew
Farmer D Spinner E C Mill B
Farmer D Spinner E C
Spinner F
Farmer E
Gin C Fabric Cut & Sew Spinner F
Spinner G D Farmer E
Gin C Fabric Cut & Sew
Mill C Spinner G D
Mill C
Spinner H Cut & Sew Spinner H Cut & Sew
E

Trader
Trader Trader
E

Spinner A Cut & Sew

Cut & Sew
A
Spinner B Fabric A
Farmer A Gin A Gin A
Mill A Cut & Sew Farmer A
Spinner C Cut & Sew
Farmer B B
Farmer B B
Spinner D Fabric
Farmer C Gin B Cut & Sew Farmer C Gin B
Mill B Cut & Sew
Spinner E C
Farmer D C
Farmer D
Spinner F
Farmer E Gin C Fabric Cut & Sew
Cut & Sew
Spinner G D Farmer E Gin C
Mill C D
Spinner H Cut & Sew
Cut & Sew
E
E

When you put this in a global perspective, you realize that the cotton
supply chain is really a very complex web of players worldwide.

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 Additional Influences

Financial Institutions Donors

Input Providers Traders Retailers NGOs

Low/Medium High/Medium Medium Low Medium High Medium Low

Yarn Fabric Product
Grower Gin Retailer Consumer
Spinner Mill Manufacturer

Local Banks
In addition to value chain actors, there are
financial, reputational and other influences
that affect the cotton supply chain.

Governments
(varies upon region)
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Thank You

“Be the change you want to see in the world.”

Mahatma Gandhi

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