Let's just start of with this part of the production process is all about removing shrink & delivering consistency.
The industry typically has two ways they deal with shrink. First is piece dye-taking each roll of fabric (typically anywhere between 50 - 100 yards of continuous fabric) through a wash cycle. Second, is garment dye-estimating the amount the fabric is going to shrink in the wash, adjusting each pattern by that amount, cutting and sewing the "blank" tshirts, and then running them through the wash assuming they will shrink back to the desired size after wash.
If you want a cotton t-shirt that is accurately sized and doesn't shrink, neither work. Piece dye doesn't actually shrink the fabric because the fabric remains under tension during the process. Garment dye relies on an estimate of shrink over hundreds if not thousands of yards of fabric, and relies on that estimate to be consistent with all the moving variables of wash temperature, timing, dye formula, shrink from roll to roll, etc.
Enter Cotton Inc. - a non profit group aimed at innovation within the textile industry focused on the use of cottons. They have done extensive testing on shrink in cotton fabric and published a number of reports on it. Without boring with the technicals, they found that taking fabric through a wash and dye process without tension allows for maximum shrinkage because during the process tensionless fabric can assume its lowest energy state.
This is why we block dye. Once the fabric is made at our mill, we unroll, spread and cut all the fabric into blocks. This reduces the amount of tension present in the fabric and better allows the fabric to acheive maximum shrink during the wash and dye cycle. These blocks are sent to our wash and dye house. Once dyed, washed, and shrunk, these blocks of fabric are ready for Cut and Sew.