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The textiles and clothing supply chain consists of production of raw materials; spinning, weaving, or knitting; finishing; design; sewing; distribution; and marketing. The production of textiles was the first economic activity to be industrialized, starting in the United Kingdom around 1765 with the invention of the spinning jenny, a machine for spinning wool or cotton.
The clothing industry is unskilled and labor intensive. The technology is cheap and simple and did not change much over the 20th century. The fabric is first cut and then grouped, tied into bundles (preassembly), and sewn together. A worker receives a bundle of unfinished garments, performs her single task, and places the bundle in a buffer. It takes about 40 operations to complete a pair of pants, and about 100 operations for men's blazers. Improvements in technology have taken place in two areas: specialized machines for each task and better coordination of the tasks.
The textile and clothing sector also includes market segments where innovation, technology, and design are important for competitiveness. Examples are sophisticated textile materials for industrial and medical use, athletic sportswear and equipment, and up-market fashion clothing. In the United States about two-thirds of textiles production is for industrial use and household goods. Italy and, to a lesser extent, France are important producers and exporters of up-market fashion products, and the two combined accounted for about 10 percent of world clothing exports in 2005. In Italy, textiles and clothing as a share of total manufacturing value added declined from 12 percent of total manufacturing value added in 1980 to 10 percent in 2003.
Economies of scale in distribution favor large supplier countries that cover the entire supply chain, such as China, India, Mexico, and Turkey. Smaller producers tend to find niches where they establish a significant market position. Sri Lanka, for instance, is among the world's leading exporters of lingerie.
Although production technology has not fundamentally changed, distribution technology and the division of labor between manufacturers and retailers have changed substantially since the late 1970s. The shift of key functions from manufacturers to retailers started with the establishment of large discount retailers such as Wal-Mart in the United States. Using modern information technology to improve supply chain management and transforming the relationship between retailers and...