Why do we need to know about Value Chain?  Look at the past in order to analyze the future How much is the accumulated economic value of your belonging item? If that item is further traded with greater demand, how many people behind would benefit/loose? Also, what are impacts (-/+) that roll back to the origin of the value chain?

 Video: Textile Fair Trade Supply Chain

GLOBAL VALUE CHAIN: TEXTILE AND GARMENTS Spinning Weaving Knitting Dyeing, Printing, Finishing SewingCutting Finished Garments Brand-name apparel companies Overseas buying offices Wool Raw cotton Trading companies Retail Outlets Textile Apparel Component networkProduction network Export networks Marketing networks Raw materials

VALUE ADDED FORMATION IN THE TEXTILE AND GARMENTS SUPPLY CHAIN Yarn Raw Cotton Textile Finishing Garment production 11.3% 16.0% 6.9% 54.5% 11.3% Source: Gherzi

GOVERNANCE STRUCTURES OF VALUE CHAINS Lead firms coordinate the value chain : innovate, create brands, control the whole production process  Producer driven Large firm or TNC controls production network Upstream and downstream linkages Capital and technology intensive industries (i.e. automobiles, aircraft)  Buyer driven Decentralised production network Labour intensive industries (large retailers and branded manufactureres, i.e. GAP, Nike) Lead Firm price Suppliers Buyers Integrated Firm

UPGRADING IN GLOBAL VALUE CHAINS Improving Process Improving Products Specialising in new functions Moving to a new VC Introduction of better quality control systems or new production equipment. A footwear producer shifts from mass produced low-cost shoes to more fashion- intensive footwear sold for higher prices Moving from a manufacturing to a design function. Move from TV to computer monitor production