Better Cotton Kerem Saral BCI Supply Chain Manager

Better Cotton Kerem Saral BCI Supply Chain Manager 2014 1

BCI Chain of Custody & Traceability System Ø Mass-balance system for all members Concept & application & implications Ø Better Cotton Tracer Ø Traders Ø Spinners Ø Retailers Ø Q&A 2

What is a Better Cotton Claim Unit? BCCU = Better Cotton Claim Unit » The units of conventional cotton that can be substituted for equivalent units of Better Cotton - Due to Mass Balance » 1 BCCU represents 1 kilo of physical Better Cotton 3

Better Cotton Co. C Guidelines Separate chapters for each actor 4

Better Cotton Co. C Guidelines Content of each chapter » Physical Better Cotton – Physical and Mba Rules » Better Cotton Traceability System » Documented procedures, training and responsibilities » Record Keeping » Outsourcing » Penalties » Material input records » Material output records 5

Better Cotton Chain of Custody MASS-BALANCE ADMINISTRATIVE SEGREGATION Chain of Custody Guidelines Ginner Monitoring Guidelines BCI membership not required Membership Code of Practice Registered BCI membership required Retailer clients monitoring requirements BCI membership not required but encouraged Membership Code of Practice BCI membership required Trad er Farmer 100% Seed BC 100% BC Bale BTS Products with associated BCCU (Better Cotton Claim Units) Better Cotton Tracer No Access Better Cotton Tracer

Better Cotton Co. C Guidelines – Gin Level Better Cotton is kept physically separate from conventional cotton at the gin level in all countries In order to create 100% Better Cotton Bales = Total available lint Better Cotton at a global level 7

Better Cotton Co. C guidelines - Traders Mass-balance with Country Scope Trader’s warehouse in Brazil 100 Kilos of Brazilian Better Cotton Bales Volume In out = Volume BC CC Better Cotton 100 Kilos of Brazilian Conventional Cotton Bales Conventional Cotton Purchase declaration from ginner + 100 BCCUs in trader’s account Sales declaration to a spinner - 100 BCCUs in trader’s account & +100 BCCUs in spinner’s account 8

Trader’s Purchase Declaration 9

Trader’s Sales Declaration 10

Better Cotton Co. C guidelines – Spinners Mass-balance with Site Scope Spinning factory in Bangladesh Volume In 100 Kilos of West African Bales w/ BCCUS Better Cotton Bales = Volume out BC CC 100 Kilos of Indian Conventional Cotton Bales Better Cotton Conventional Cotton Purchase declaration from ginner or trader +100 BCCUs in spinner’s account Sales declaration to a fabric mill -100 BCCUs in spinner’s account 11

Spinner’s Purchase Declaration 12

Spinner’s Sales Declaration (Combed Yarn) 13

Spinner’s Sales Declaration (Carded Yarn) 14

BCCU Transfers Ginners Traders Online BCCU Transfer Spinners Fabric Mills Garment Man. ODF Physical Document BCCUs Transfer Retailer LEARN LEAD DRIVE THE CHANGE AMSTERDAM 2014

Better Cotton Volume Claims by Retailers Retailer Total claims reported to BCI Product with allocated BCCUs (indicated on spinners’ ODFs) Yarn with BCCUs Yarn without BCCUs Cotton Tracer 16

Retailer and Brand BCCU Claims Spinner’s name and # of BCCUs are taken from the spinner’s ODF 17

Better Cotton Co. C guidelines – Fabric Mills Mass-balance with Site Scope Fabric manufacturer in Turkey Volume In 100 Kilos of yarn with BCCUs from India = Volume out BC CC Yarn with BCCUs 100 Kilos of yarn without BCCUs from Turkey Yarn without BCCUs Can use ANY yarn made with ANY origin of cotton 18

Mass-Balance System LEARN LEAD DRIVE THE CHANGE AMSTERDAM 2014

Placing Orders with BCCUs Retailers/Brands Fabric Mills Set BC usage target Decide how to spread this % throughout products Receive the PO with a fixed % of BCCU allocation to the fabric Calculate the net weight of yarn needed Place order with spinner and indicate the % of BCCU allocation to the yarn Set KPIs for various departments Ask fabric mill to provide ODF from spinners Spinners Receive PO from fabric mill Calculate needed BCCUs for the ordered yarn Order lint accordingly Traders Receive PO from spinner Buy physical Better Cotton bales from ginner accordingly Ship lint bales to spinner 20

Advantages of Mass-Balance 4 Spinners » Zero wait time on bales to arrive » Same lead time as conventional » Flexibility in bale use » White fabrics with BCCU » Easy traceability » No UBICS; easy system to use 23

Thank you! Please contact us at any time to: Ask any questions regarding our traceability system Your account on Better Cotton Tracer To get a copy of this presentation Report troubles you identified in your BC supply chain Kerem Saral – BCI Supply Chain Manager kerem. saral@bettercotton. org Direct Line: +41 -22 -939 -1293 Skype ID: keremsaral Manish Gupta - India Supply Chain Coordinator manish. gupta@bettercotton. org Muhammad Shuiab – Pakistan Supply Chain Coordinator muhammad. shuaib@bettercotton. org Leo Xiao - China Supply Chain Coordinator leo. xiao@bettercotton. org 24