“Where does that come from?” sounds like an easy question to answer and at a high level it is. Which car models are produced at which plants is public knowledge so whether your Toyota was built in Kentucky or Alabama is easiest enough to figure out. But if you want to take it to another level — to know where different components came from and where the stuff that goes into the components comes from — is a lot harder. That is the conclusion reached in a blog post on Nautilus (The Secret Life of Everything: Where Your Stuff Comes From, Oct 29). Modern, global supply chains are so far reaching and support so much complexity that transparency (at least to the outside world) is lost.
I’d thought of [supply chains] mostly in terms of delivering Amazon orders and keeping Staples stocked. Those are just endpoints, the final few steps of a waiter carrying a meal on a tray. And what I really didn’t get was that supply chains don’t just carry components and ingredients, but synchronize their movements. Shipping a box of pens to Staples is the obvious part. Coordinating the arrival of barrels, caps, boxes, ink cartridges, and nibs (through which ink flows) at the pen factory—and also metal to the nib factory, oil to the plastics-maker, and so on—is the bulk of what supply chains do, and in the most efficient manner possible, with algorithms optimizing everything from shipping networks to the path of pallets through warehouses, with an eye to what happens when one of these many moving parts goes invariably astray.
The problem then is that unless you pick a real simple product — like a T-shirt — it is pretty much impossible to know where all the components come from and where all the various production steps are executed. NPR’s Planet Money took on this challenge of tracking a T-shirt from cotton field through production and shipping to the disposition of used American clothes in Africa. It’s an eye-opening picture of global supply chains.
You can find all of the resulting radio stories here and set of videos on the project here. The most interesting part of the process to me is the actual manufacturing step. As this video explains, the women’s T-shirt was made in Colombia and men’s shirt was made in Bangladesh in very different conditions.
One of the accompanying articles gives some insight into why Colombian garment workers can be paid so much more than Bangladeshi workers (‘Our Industry Follows Poverty': Success Threatens A T-Shirt Business, Dec 2).
With a long tradition of apparel manufacturing and better technology, the Colombians can make T-shirts much, much faster than the Bangladeshis can. In Bangladesh, on one sewing line for our T-shirt, 32 people can make about 80 shirts per hour. One sewing line in Colombia has eight people and can make about 140 T-shirts per hour. The two lines aren’t perfectly parallel — the Bangladeshi workers are completing a few more details of the shirt than the Colombians are. But the difference is striking nevertheless.
It’s not just the sewing machine operators who are more efficient in Colombia. The cotton for the men’s shirt was spun into yarn in Indonesia, then shipped to Bangladesh to be knit, cut and sewn. Crystal, the Colombian company that made the women’s shirts, does everything — from spinning the cotton into yarn to knitting the yarn into cloth to stitching sleeves on a shirt. That makes the process much faster and easier for Jockey, the company that coordinated the production of our T-shirt.
It is worth noting that even with its superior efficiency the Colombian company is in jeopardy of losing its contract with Jockey. That is, cheap wages can trump advanced processes and better capital even when the labor-component of costs is relatively small.
This all points to an observation that Adam Blumberg, who led the project, makes in his interview with Stephen Colbert: There is a pretty fine line between exploiting workers in the global economy and providing real opportunities.
Finally, I should note that this whole thing is inspired by Pietra Rivoli’s book “The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade.”