The true cost of a $5 t-shirt  

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Have you ever questioned how a t-shirt can be converted from raw materials, designed, produced, manufactured, distributed and then sold for a profit at $5? With an extensive background in manufacturing, Michelle Powell, Business Analyst at Prological explains what’s happening behind the scenes.  

In a recent Four Corners episode, ABC’s regular current affairs program, the production took a deep dive into the rise of online shopping and the increasing demand for cheap and readily available clothing.  

The program explored the rise of sweatshops in Britain, textile factories in India and investigated the high cost of fast fashion.  

Highlighting some major environmental issues with the production of synthetic fabrics, the program revealed the textile industry is the second biggest polluter worldwide, second only to the oil industry.  

With the textile industry expected to be valued at $3 trillion by 2030, which is 60 per cent growth from where we are today, the industry is showing no signs of slowing down.  

Furthermore, according to a 2019 report by the World Bank, the textile industry is responsible for about one-fifth of global water pollution and it is estimated that it takes 200 tonnes of water to produce one tonne of dyed fabric.  

Anyone working in manufacturing or supply chain operations knows there is an extremely high number of processing steps required to turn something from a plant, or wool off the sheep’s back, into an item of clothing that people will wear. And that’s before you even start to think about the distribution costs.  

You may have seen a number of retailers start to use words like sustainable, considered and ethical in their marketing materials. But often these phrases are misleading and even with the best intentions, once you delve deeper into the full breadth of the supply chain, there is a risk of environmental malpractice, slavery and exploitation when the commercial drive is demanding retailers to sell a t-shirt for our indicative ‘$5’.  

So, how can manufacturers, retailers and textile producers limit their risk of slavery and exploitation? 

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Michelle Powell, Business Analyst at Prological. 

With so much subcontracting going on in the textile industry, it’s very hard to have a full understanding of your entire production process.   

You may think that all your suppliers adhere to safety, environmental and HR practices, but there is often subcontracting going on that many manufacturers and retailers aren’t even aware of.  

The Modern Slavery Act came into force at the beginning of 2019 and is a new statutory modern slavery reporting requirement for larger companies operating in Australia.  

While it is absolutely essential for governance and policy to encourage a more responsible supply chain when it comes to modern slavery, there is still much to be done.   

Full visibility across supply chain and manufacturing processes is the only way to limit the risk of exploitation and to fight against some of the devastating impacts of the textile industry on local communities, both human and environmental.  

High levels of due diligence across all suppliers and subcontractors ensures supply chains comply with mandates to eliminate human exploitation and reduce the impact on the environment.  

With COVID-19 highlighting the complexities of supply chain operations, many organisations are increasingly aware of the fragility of their supply chains. Delays that were generated from tier four, five and six suppliers forced many Australian organisations to rethink and focus on increasing visibility across their operations.  

Mapping out your entire supply chain helps improve best practice and eradicate malpractice. What at first presents itself as a complex and lengthy task, will lead to significant benefits across the ethical, commercial and sustainable spectrum.  

At Prological, we help our clients understand the entire legislative and operational elements within the supply chain. We educate our clients in what best practice looks like and how to ensure continuous improvement and positive commercial outcomes.  

If you’re worried about what is going on in your supply chain or want to increase visibility to limit risk and contribute to a more sustainable and ethical future, contact Prological to explore how you can map out your supply chain.  

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