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Better Cotton Chain of Custody & Traceability Kerem Saral BCI Supply Chain Manager. 2014. Overall Goal: T ransforming cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity. SPECIFIC AIMS:. Improve … livelihoods and economic development in cotton - PowerPoint PPT Presentation
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Better Cotton Chain of Custody & Traceability
Kerem SaralBCI Supply Chain Manager
2014
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Overall Goal:
Transforming cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity.
SPECIFIC AIMS:
Improve… livelihoodsand economicdevelopment in cottonproducing areas
Increase… commitment to and flow of Better Cotton throughout the supply chain
Reduce… The environmental impact of cotton production
Ensure… the credibility and sustainability of the Better Cotton Initiative
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Livelihoods Environment Supply Chain BCI Sustainability
GlobalIndicators
Number of Better Cotton farmers
Better Cotton hectares under cultivation
Better Cotton lint volume in MT
Earned income as % of global costs
2012 actual 165,000 685,000 670,000 50%
2015 target 1 million 2 million 2.6 million 75%
2020 target 5 million 9 million 8.2 million 100%
BCI GLOBAL TARGETS
Countries where Better Cotton is grown via a partnership agreement between BCI and a national actor
Better Cotton Countries with BCI owned legal entities and operations
In the pipeline
Mali, Senegal, Burkina Faso, Cote d’Ivoire, Ghana
Mozambique, Malawi, Zambia, Zimbabwe
India, Pakistan, China
Australia
USATurkey Tajikistan
Brazil
WHERE DOES BETTER COTTON GROW?
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New vs. Old
» New Better Cotton CoC requirements for traders, spinners, and intermediaries and retailers
» Introduction of Better Cotton Claim Units» No more UBICS» Output declaration forms from spinners» Making Better Cotton volume claims
» Better Cotton Traceability System
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New Chain of Custody Guidelines - But Why?
» Inform all supply chain actors about their role in tracing Better Cotton throughout the supply chain
» Enable retailers to make claims with confidence
» Eliminate past challenges that led to low uptake rates » Availability issues, inventory management problem, timing
problems, overstock/out of stock suppliers, premiums
» Lay the groundwork for introducing physical traceability as an option in 2016
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BEFORE July 1st 2013
AFTER July 1st 2013
Better Cotton Chain of Custody
Ginners Physical Segregation Physical Segregation
Traders Physical Segregation Mba w/ Country Scope
Spinners Physical Segregation Mba w/ Site Scope
Intermediaries Physical Segregation Mba w/Site Scope
Retailers Claim UBICs Claim BCCUs
Better Cotton Traceability System
Supply chain actors in BC traceability system Ginners, Retailers
Ginners,Traders, Spinners, Retailers
Traceability System Bale Tracking System (BTS)
Bale Tacking System (BTS) +
Better Cotton Tracer (BCT)
Better Cotton Chain of Custody & Traceability SystemBefore and After
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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
100% BC Bale Products with associated BCCU (Better Cotton Claim Units)
BCI membership not required
Ginner Monitoring Guidelines
SEGREGATION MASS-BALANCE ADMINISTRATIVE
BCI membership not required but encouraged
Retailer clients monitoring requirements
Registered BCI membership required
Membership Code of Practice
Trader
Chain of Custody Guidelines
Membership Code of Practice
BCI membership required
100% Seed BC
Farmer
BTS Better Cotton Tracer Better Cotton
Tracer
Better Cotton Chain of Custody
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Better Cotton CoC 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
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Better Cotton Conventional Cotton
100 Kilos of Brazilian
Better Cotton Bales
100 Kilos of Brazilian
Conventional Cotton Bales
Mass-balance with Country ScopeTrader’s warehouse in Brazil
BC CC
CC
CC
BC
BC
Having bought 100 kilos of BC Bales gives the trader 100 Better Cotton Claim Units. They can then ship 100 kilos of conventional cotton bales with the same country of origin to fulfil a BC order using these 100 BCCUs – by attaching earned BCCUs to conventional cotton bales
Volume In = Volume out
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Better Cotton CoC guidelines - Traders
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Mass-balance with Site Scope Spinning factory in Bangladesh
Better Cotton Bales can be swapped with conventional cotton bales of any origin as long as they are in the same site, using BCCUs earned by buying bales with allocated BCCUs from BCI traders or BCI-registered ginners.
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Better Cotton CoC guidelines - Spinners
Better CottonConventional Cotton
100 Kilos of Chinese
Better Cotton Bales
100 Kilos of Indian
Conventional Cotton Bales
Volume In = Volume out
BC CC
CC
CC
BC
BC
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Mass-balance with Site Scope
Yarn with allocated BCCUs can be swapped with yarn without any BCCUs of any origin as long as they are in the same site and volume-out doesn’t exceed volume-in. 13
Better Cotton CoC guidelines – Intermediaries
Yarn with BCCUs Yarn without BCCUs
100 Kilos of yarnwith allocated BCCUs from
China
100 Kilos of yarnwithout any
allocated BCCUsfrom India
Volume In = Volume out
Fabric manufacturer in India
BC CC
CC
CC
BC
BC
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Tracing the “volume” of Better Cotton
Until now – BCI has enabled retailers to claim individual bales of physical Better Cotton.
From now – BCI enables retailers to claim usage of lint Better Cotton (a certain amount of it) in their supply chains.
But How?
Output Declaration Forms from Spinners
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Output Declaration Form from Spinner
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Trace the volume of physical Better Cotton throughout retailer and brands’ supply chains
This is done by transfer of BCCUs from one supply chain actor to the next using output declaration forms (ODF)
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Mass-Balance & BCCUs help BCI to:
Traders Spinners Fabric MillsTraders
Earn BCCUs purchasing physical BC
Transfer these BCCUs along
with bales they sell
SpinnersEarn BCCUs
purchasing bales w/ BCCUs
Transfer these BCCUs along
with yarns they sell
Fabric MillsReceive ODF
from spinnersPass ODFs to retailers and
brands(Coordination is
required)
Retailers/Brands
Receive ODF that was generated by
spinners on Better Cotton
TracerEnter claims accordingly
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Better Cotton Volume Claims by Retailers
Yarn with BCCUs Yarn without BCCUs
Product with allocated BCCUs
(indicated on spinners’ ODFs)
Total claims reported to BCI
Retailer
BCCUs
BCCUs
Cotton Tracer
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How would it work starting with the retailer?
TradersReceive PO from
spinnerBuy lint bales from ginner accordingly
Ship lint balesEnter transaction into the Cotton
Tracer
SpinnersReceive PO from
fabric millCalculate needed
BCCUs for the ordered yarn, using the fixed
conversion rates built into the
systemOrder lint
accordinglyEnter transaction into the system and generate
ODF
Fabric MillsReceive the PO
from RBs given a set % of BC to be included in the
fabricCalculate the net
weight of yarn needed
Place order with spinner and
indicate the % of BC to be included in the yarn (same % received from
retailer)
Retailers/BrandsSet BC usage
targetDecide how to spread this % throughout
productsSet KPIs for
various departments
Ask fabric mill to provide ODF from
spinners
1919
Spinner’s
ODF w/BCCUsRetailer’s
ClaimH O W ?
Coordination effortEngage with suppliers down to the spinner or fabric mill level – suppliers’ suppliersInform about Better Cotton requirements – no UBICS, mass-balance, no certificate, ODFAsk for ODF to be transferred to you – how? The actual document or information on it?
Due diligenceFabric mill level redistribution of BCCUsBCCUs in = BCCUs out for your specific ordersAsk the fabric mill to keep records of BCCUs received and passed along to retailers?Ask your spinners to pass the ODF directly to you?
Special casesCancelled orders – when to enter claims into the Better Cotton Tracer?
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Things to take away
» New Better Cotton CoC requirements for allGinners 100% Segregation CoCTraders Mass-Balance Admin. with country scopeSpinners Mass-Balance Admin. with site scopeRBs Enter claims against spinner BCCUs
on the Cotton Tracer
» Introduction of Better Cotton Claim Units» No more UBICS» Output declaration forms from spinners» Making Better Cotton volume claims
» Better Cotton Traceability System
General web site functions
How the transfer of BCCUs work between members
Entering purchase and sales transactionsGenerating output declaration forms
How retailers and brands make their claims using ODF from spinners.
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Better Cotton Tracer
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Thank you!Please contact me or my country teams to:
Ask any questions regarding our traceability systemYour account on Better Cotton TracerTo get a copy of this presentationReport troubles you identified in your BC supply chain
Kerem Saral – BCI Supply Chain [email protected] Line: +41-22-939-1293Skype ID: keremsaral
Selvin Lloyd - India Supply Chain [email protected] Shuiab – Pakistan Supply Chain [email protected] Xiao - China Supply Chain [email protected]