Supply chain tiers

Fashion brands generally do not produce the clothing they sell themselves but have their products made by a variety of manufacturers that are specialized in different aspects of the manufacturing process. 

These complex and often intercontinental supply chain processes that involve different stages of production are described in a tier system. In these tiered supply chains, Tier 2 companies supply companies in Tier 1, while Tier 3 companies supply Tier 2, and so forth.

Supply chains in the fashion and textile industry are long, complex, often intercontinental and continously evolving. They involve layers of agents, contractors and subcontractors that is best viewed as a web rather than a linear chain. In order to categorize the different stages of these complex production processes these are best described in a tier system. 

Tier 1: Assembly factories: Cutting, sewing, assembling and packing for shipment.

These are the facilities where finished goods are made and shipped from. Here all the components are sent to and assembled into the final product as we know them. Most brands and retailers have direct business relationships with these suppliers. These are also sometimes referred to as Original Equipment Manufacturers (OEM).

Tier 1+: Subcontracted assembly factories

As pressure on prices and delivery times mounts, manufacturers can subcontract other assembly factories to meet tight deadlines and complete the order. Because the subcontracted facility is not a formal part of the supply chain it can avoid social compliance audits or government inspections, resulting in little oversight and a big risk of human rights violations in subcontracted facilities.

Tier 2: Processing facilities: Fabric production 

In textile factories, mills and tanneries the processed materials are turned into the fabrics that can be used for assembly.  Printing, dying, laundering and embroidery are part of this tier of the suppy chain. 

Tier 3: Processing facilities: Yarn spinners and fiber processors 

These are the textile production sites where spinning, knitting and weaving take place and raw materials are turned into fibers. Yarns are spun, dyes and bleach are applied in wet processes and animals are slaughtered for their hides. 

Tier 4: Raw material suppliers

Every product starts with raw materials. These can be farms, livestock farms, cotton plantations or any other supplier of raw materials.

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