Hidden Production


Hundreds of millions of people worldwide have grown up having very limited access to new clothing, inheriting secondhand items from other family members that probably came from containers of secondhand clothes from developed countries. Fashion Revolution and the OR Foundation spotlight the secondhand market in Ghana called "Dead White Man's Closet." This is the second largest in East Africa, with 5,000 individual shops and a labour force of 30,000. When secondhand clothing started flooding into Ghana in the 1960s, people assumed that the cheap imports had been the property of deceased foreigners, hence the name. The truth – the clothing was excess that living consumers in the USA and Europe no longer wanted.


As people's living conditions improve in developing countries, they gain access to purchase clothes in local markets and small-scale shops, where brands don't play an important role. Do you ever wonder where those clothes are made? Do you ever worry about what percentage of fashion production is unregulated?


This is what we, at Simply Suzette, have decided to call Hidden Production and have asked Jessie and Kim, co-founders of the Manufactured podcast, to help us understand.


JESSIE AND KIM, CAN YOU PLEASE SHARE WITH US AN IDEA OF WHERE UNBRANDED CLOTHING IS MADE, THE SIZE AND PROPORTION THAT THIS REPRESENTS?


Jessie: I can tell you about what I learnt with my experience in China. There are very large wholesale markets that supply clothes produced domestically to the whole country. Let's imagine you step into this market, it's usually a huge building, and each counter is a shop, behind which each one has a workshop, and what they sell is what they produce, based on the orders received. So I would say if you start from zero, you would better understand the working conditions and the size of each office.


Another example is in Peru, where we interviewed a knitting brand. The knitters worked in a very different way; they acted as a group, led by a knitting leader, who was in charge of discussing with the brand, deciding production capacity, calibrating the rate, etc. In this case, let's imagine you're the auditor of ISO9000; how can you audit them? This isn't a traditional production system; there is no single facility. They work at the time they feel, from home or in smaller workshops. In a wholesale market, most clothes are produced this way and supply the majority of the population.


Kim: Where are the majority of clothes on wholesale markets being made? For example, in Cambodia, in the local markets, there are all kinds of quality defects and overstock coming from the larger garment factories being sold locally. There are also tailor shops, and people who go to markets, buy fabrics and hire a tailor.

Jessie: In China, the major consuming party, and younger generations, which in Europe would be wearing H&M or Zara, actually go for domestic-made or domestic brands and much cheaper clothes. There is an extensive range of options, and many local designers have become famous because of this large group of people. The upper-middle-class would wear H&M or Uniqlo; the upper middle class would go for more expensive designer brands.


There is an established complete and shorter supply chain; from yarn to finish, you can do everything in the country. The raw materials produced in China, the production process in China, and the distribution also in China, and in that case, are these clothes sustainably made or not? That is a big question mark. That is a case-by-case matter.


In other countries, it's different. For instance, in Cambodia, people buy many secondhand clothes, clothes made locally from deadstock fabrics or defective pieces from bigger garment factories.

I would see a GAP, H&M or Zara item with the label cut in Cambodia, which usually means it's a defective piece. I also saw bizarre clothes with the washing label marked as made in Romania or Portugal, and I wondered how it had ended up in Cambodia.



WHAT WAS YOUR EXPERIENCE IN DEALING WITH OVERSTOCK AS A FACTORY MANAGER? HOW DID YOU DEAL WITH DAMAGED GOODS, AND HOW ARE THEY RELATED TO THE CLOTHES FOUND IN LARGE WHOLESALE MARKETS IN DEVELOPING COUNTRIES?


Kim: I think that overproduction and damaged goods are also related to the distribution of risk and reward. When I was a factory manager, we had much overstock, which were quality defects or things we thought we would sell, but then the orders came in smaller than forecasted. We were working primarily with luxury brands, so they had stringent quality standards, and we weren't allowed to sell these to someone else because brands wouldn't allow it.


We were ISO 9001 certified, which meant I had to show auditors how many kilos of fabric we imported, how many products we made, how many we sold, and offer our inventory records. Then I'd have to show the gap, and they would check that all the numbers reconciled. If we imported 100 kilos of fabric, but the products that we exported were worth 80 kilos of material, I would have to show auditors receipts that I had sent the scrap or the overstock or the defects to be incinerated for the remaining 20 kilos, as part of the certification. I did this by the books, but having said that, many factories, because of the lack of equilibrium between orders and capacity, would end up with many products that they can't sell and sell them locally to survive. It would be necessary for them to recover some money on all of those costs that went into making those products end up selling them on the local market.

LEGISLATION VERSUS CERTIFICATIONS IN DIFFERENT SUPPLY CHAIN SYSTEMS

Jessie: In a workshop, how do you define sustainability? We cannot use the same framework to regulate them because it doesn't fit systems like family workshops. There is no such thing as working hours, nine to five, or fixed salaries that everyone can keep for themselves, a management team, a board of directors, HR, and factory workers. There are no public holidays; it's all individually designed and adjusted to each situation. Sustainability must be redefined to fit these situations too. The framework needs to be reinvented.


Kim: I think that there's a really important role for legislative context and political action because in the "West," we're talking about brands who are selling and suppliers who are producing for those brands. What we're talking about in these developing countries and emerging markets is brands who still have suppliers producing for them. Still, you also start to see suppliers who are going direct to consumers, so the line between a brand and a supplier gets blurry, which really begs the question: how did these two functions even get separated in the first place? How did we get to a place where this structure exists, where you have a brand and a supplier, and consumers who don't know who the supplier was for the clothes they buy? This is considered so normal, so it's not thought about. And in such an established system, political action and legislation changes are a huge part of the question and the solution.


Systems like wholesale markets and family workshops cannot be tackled with certifications. Governments should take responsibility for what's happening in their state. - Kim van de Weerd

We hope you enjoyed this insightful 3-part series with Jessie and Kim! For more from the co-hosts of Manufactured, be sure to subscribe to the podcast on Spotify or Apple Music and sign up for their newsletter, which can all be found here.


Until next time friends, always be curious and STAY DILIGENT!