Your SlideShare is downloading. ×
The Value Chain In T&C Industries In Domestic And International Markets
Upcoming SlideShare
Loading in...5

Thanks for flagging this SlideShare!

Oops! An error has occurred.

Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

The Value Chain In T&C Industries In Domestic And International Markets


Published on

Published in: Business, Lifestyle
  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

No notes for slide
  • Transcript

    • 1. The Value Chain in T&C Industries in Domestic and International Markets The Role of SMEs in the T&C Industries; The Economics and Business of Fashion Presentation by Mr. Matthias KNAPPE Caserta, Italy 30 November 2005
    • 2. Technical cooperation arm of WTO and UNCTAD for operational enterprise-oriented capacity building for trade promotion and export development. … for developing countries
    • 3. Context:
      • Global T&C trade: 453 billion $ (clothing 258 bio $)
      • T&C: 7% of global merchandise trade
      • LDC share of world clothing trade: 5%
      • Many DCs & LDCs depend on clothing exports or regard clothing as a future export sector, but not the domestic maket
      • WTO: T&C is a normal sector
    • 4. Characteristics of T&C industry in DCs
      • Most LDCs have no integrated T&C industry (clothing exports = 8 times textile exports)
      • SMEs mainly produce clothing and not textiles
      • Poor market diversification
      • Poor product diversification
      • Mainly CMT/maquila: « full-package » to be developed (incl. product dev. & design)
      • Fashion for the domestic market is minimal
    • 5. Structure The Role of SMEs in the T&C Value Chain Fashion Products: a Result of Services Market Pressure for SMEs in DCs
    • 6. 1. Prices are falling Source: Textile Outlook International No. 116 March-April 2005
    • 7. EU: Import Price Development for Clothing
    • 8. 2. Consolidation (at 4 levels): what are the consequences for SMEs? Source: US Department of Commerce: Report to the Congressional Textile Caucus on the administration’s efforts on textile issues; Washington, September 2002
    • 9. Example : Liz Clairborne
      • 2004 – Top 50 Vendors represented 80% of our volume
      • 2010 – Top 25 Strategic Partner Suppliers will represent 80% of our volume
      Source Liz Clairborne
    • 10. 3. Move towards a Service Industry: Have SMEs the vision? Value-Added Time 2005 1970 Manufacturing Manufacturing & Sourcing Manufacturing & Sourcing & Product Development Full Service Buyers requirements
    • 11. 4. Pressure from Frequent Fashion Changes Demands Quick Response
      • From 2 to multiple selling seasons
      • More fashion products with short product life cycles vs. basic products with regular replenishments
      • Quick response: a « puzzle » of many variables along the value chain
      • This « puzzle » needs to be solved first
      • Difficult with practices establised over decades
      • Stop « firefighting »: new business strategies, processes & procedures
    • 12. 5. Pressure to Form Strategic Alliances
      • Quota system forced retailers to take over value chain responsibilities
      • These responsibilities be given to suppliers
      • To do so trustworthy partners are needed
      • Virtual vertical operations: integrated system between manufacturer and retailer
    • 13. Summary: Market Pressure
      • Prices are falling
      • Consolidation
      • Move towards a service industry
      • Frequent fashion changes
      • Strategic alliances
    • 14. Structure The Role of SMEs in the T&C Value Chain Fashion Products: a Result of Services Market Pressure for SMEs in DCs
    • 15. Fibres Yarn Fabrics End-Users Man-made Natural Ginning Carding Combing Spinning Yarn dying Weaving Knitting Bleaching Dying Finishing Industrial Goods Home Furnishing Apparel The T&C Value Chain
    • 16. Fashion = Quick Response = Services Sourcing Manufacturing Sales (+Marketing) Inbound Logistics Customs, Import Clearance Outbound Logistics Customs-GSP/Quota Export Clearance Product development Design & Sketches Market Research Buyer – Manufacturer Strategic relationship
    • 17. Design & Product Development
    • 18.  
    • 19. Structure The Role of SMEs in the T&C Value Chain Fashion Products: a Result of Services Market Pressure for SMEs in DCs
    • 20. To sell Fashion: SMEs need to take over VC Responsibilities i.e. Provide Services
      • SMEs need to diversify: marketing
      • Everybody offers: good quality, competitive prices & on-time delivery
      • Therefore, provide services buyers want:
      • 1) make and send the garment quickly to my store (participate in the fashion VC)
      • 2) Organize everything and I’ll pay you (service)
    • 21. 75% of cost = sourcing Cost structure of a woven shirt up to the FOB point Material Sourcing: No.1 service demanded by buyers
    • 22. Number 2 service: Use of e- technology
      • The new trading environment forces the adoption of « e » solutions along the VC
      • Trend is led by US buyers and HKG trading houses, followed by EU buyers
      • E-applications are used throughout the value chain; trend: full VC « e » integration
      • Quick responds demands « e »: design and logistics
    • 23. 3. Assist buyers in selling fashion
      • The need to understand:
        • markets,
        • buyer requirements,
        • buyer’s customer requirements, and
        • competitors
      • Need to diversify product range,possibly markets
      • Need to match factory size, customer size and product
    • 24. The Fundamental Relationship: Matching the Elements
    • 25. Small Customer – Fashion Product – Mass Factory
    • 26. Mass Customer – Commodity Product – Small Factory
    • 27. Small Customer – Fashion Product – Small Factory 300 Machine Factory Giorgio Armani Cashmere Men’s Jackets
    • 28. Result of Services: Ability to Produce Fashion Products & Quick Response
      • Understanding of: the market, customer & customer’s customer
      • Material sourcing: prerequesit to understand & engage in fashion production
      • E-business: prerequisite for fast delivery
      • Partnership: prerequisite for engaging in fashion products
      • Matching the elements of a partnership
    • 29. Structure The Role of SMEs in the T&C Value Chain Fashion Products: a Result of Services Market Pressure for SMEs in DCs
    • 30. Summary:
      • SMEs in DCs do mainly CMT but no fashion products
      • Post-quota situation puts pressure on SMEs to take over VC responsibilities
      • Moving into fashion is a process, starting with material sourcing
      • Fashion products: a result of services
      • Industry consolidation competitive pressure implications on IP
    • 31. The Fashion Process in DCs and IP
      • Most design does not start from original concept
      • Use of existing info (design, colours, fabrics)
      • Shopping the stores (& cutting & copying)
      • Visit fashion shows (and cutting & copying)
      • Possibilities in niche markets for national, ethical & folklore design
      • Exploit fashion potential: collaboration of SMEs in the north and south
    • 32. THANK YOU ! For more information Contact: Matthias Knappe , Senior Market Development Officer [email_address]