First off, you need access to a large format scanner (at least 36 inches in width) Our facility has a 50 inch color Contex. If you can't afford to justify the cost (18K used, 35k to 50k new); some copy centers have large format scanning services.
I think Fed-Ex / Kinko charges like $15 - $20 per scan.
Once you have located a large format scanner, then you get to the business of making a garment pattern from either an existing shirt or an existing over-the-counter pattern (fabric store).
Most people I have assisted either do custom patterns (paintball jerseys, bikinis, etc) or they cut an existing shirt into pieces.
Purchase you a roll of white drawing paper at least 30 inches in width, layout each pattern piece on it's own individual piece of paper, draw an outline around the pattern(s) (doesn't need to be perfect but it shouldn't look like a 3 year old either), scan in the outline and WHAALA....you have a digital pattern to use for creating a shirt, pants, bikini, jersey or whatever you want to make.
Once you make your digital pattern, bring it into Photoshop, magic wand the outside of the pattern and erase it, now magic wand the shirt pattern and cut to a new layer to get just the shirt pattern by itself, then stroke the shirt with a line of color, at this point I reduce the fill properties to 0 and then you are left with just a pattern outline. (disclaimer: i am a photoshop novice so there may be a better way to do this.)
Of course there are a few tweaks here and there, but for the most part that is all that is needed.
The biggest mistake I have seen people make is using the actual scanned in pattern(s) to try and produce a shirt. (filling the outline with the actual artwork)
The digital pattern is used as a guide for mocking up / justifying the design, letters, numbers, etc.......in photoshop, the design pattern outline is the very top layer. You turn it off and on as needed to assure you have all pertinent graphics in the correct position. Once your pattern is printed and imaged to fabric, then you return to your pattern and cut it out. If you produce your artwork in the actual shape of the pattern, you are left with no wiggle room for sewing. You always need a little bleed fabric for hemming, surging and the like.
However, once you're confident, you can also increase the size of your digital pattern by a few percents to compensate for cut and sew bleed, then you can actually design your digital patterns. Once printed and pressed, you can go straight to the scissors and cut around each piece without the need for pattern layout

I have clients that do it both ways, so i can't say which is better. One is surely faster, but you need to know what your doing to enlarge all patterns equally or you will ruin a ton of fabric and waste a lot of money as well.
That is basically it. Unfortunately I have only witnessed a shirt manufactured from A - Z on a few occasions. We either provide the transfers only or we pre-fab by printing and pressing the fabric and shipping it to be finished elsewhere.
Many times, confidentiality agreements keep me from going into detail about companies we help...but here is a company that produces paintball shirts (nuff said

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Animal Paintball | Welcome. They are one of the premiere businesses in the paintball market.
The key is very dynamic graphics; apparel is apparel but in the case of custom imaged apparel, the graphics make all the difference.
Sorry this was so long but I hope it helps,
Jae'