
A lot of the best items in ARC Raiders are the ones you make yourself, rather than finding them out in the world. They're useful, crucial even, and will enhance each of your games by a substantial margin.
Durable Cloth is one of them, a relatively common item that is both necessary for the Doctor's Orders quest, as well as crafting Medical items that'll allow you to heal and recover more easily on the battlefield.
So, here's where and how you can find it.
ARC Raiders Durable Cloth - Where and how to get it

Durable Cloth can be obtained in several ways: crafting, looting, or recycling.
To make it, you'll need the Refiner 1 workstation and 14 Fabric. Fabric itself is obtained in countless ways and is one of the most common items you will encounter topside, so you should always have plenty to make Durable Cloth with, even if the cost of crafting it is a bit high and could use some nerfing.
If you want to loot it, searching any Medical or Commercial loot zone is advisable, with places like the Hospital on Buried City standing out as one of the best places for finding healing items in the game.
If you chance upon Sterilized Bandages out in the world, like in the Hospital mentioned above, you can salvage it on the spot (not recycle in Speranza) to obtain one Durable Cloth per salvaged Sterilized Bandage. This item, too, is relatively common in most areas and maps, but I'd say it's too useful to be salvaged into something that can be crafted relatively cheaply, so you'd better focus on grabbing as much Fabric as you can instead.
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