INFOGRAPHIC SERIES - CREATE A SIMPLE STITCH EFFECT

Here is a stitch effect in Illustrator. Simple method by using the dash effect on the stroke and applying some simple effect to make it look real.

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Start with a shape, any shape and fill it with a color, no stroke.

Select the shape and choose Object>Path>Offset Path. Set it to be inside the shape the distance you would want the stitching to appear.

Set the new shape to have no fill, add a slightly darker stroke and set it to 4 pt weight.

Open the Stroke Panel and set the Cap Ends to Round, click the dashed line box to call up the dashed line options. Set the dashed line to a longer dash and shorter gap setting to create a stitch look.

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With the darker color, the stitching shows up better

Add a drop shadow effect to the path. Effect>Stylize>Drop Shadow. Set the X & Y offset to 0 so that the shadow isn't cast to the side of the stitch. Add a very slight blur to the shadow.

The shadow helps create a bit of depth the the stitch.

Duplicate the path, turn off the drop shadow on the duplicated path (in the Appearance Panel).

Choose Object>Path>Outline Path.

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With the outlined path, choose Object>Compound Path>Release. 
Add a fill of a gradient going from black to white.

 If you do not Release the Compound Path, the entire shape will be filled, not each stitch. 

Set the shape to 80% opacity and set the blending mode to Multiply

Here is the final stitch effect.

Setting the opacity of the over and under stitching will make the stitching blend in more if needed.