Changing Trade Competitiveness:

The ITC Approach 6 Technical Assistance Needs 6 ITC responses

1.

1st Need: A Sector Strategy (Action Plan)

Develop overall country response Build critical country mass Build PPP based on strong sector associations Make a sector value chain analysis

2.

1st Response: The SHAPE

3.

1st Response: The SHAPE

A Structured Thinking Process:

Analyse Brainstorm

Action Plan
Strategy
4.

The SHAPE Ten Step Approach

1. Analyse Domestic Supply/Exports/Imports 2. Analyse the Value Chain (VC) 3. Identify problems in the VC and define the Actions 4. Identify export and sourcing Opportunities and define the Actions 5. Group Similar Actions together 6. Prioritize Actions and assign Time Frames

7. Working Group 8. Finalize Strategy 9. Official Launch 10. Implement and Monitor the Strategy
5.

BORDER

CUSTOMS PROCEDURES

BORDER

AGENTS/BUYING HOUSE

Sales (+Marketing, and Services)

Outbound Logistics Customs-GSP/Quota Export Clearance

TEXTILE INSTITUTE
DOMESTIC SUPPORT SERVICES

DESIGN INSTITUTE
DOMESTIC RAW MATERIALS

DESIGN

YARNS

TESTING

TEXTILE Mnf. & Exporter

RMG Mnf. & Exporter

ACCESSORIES & PACKAGING

Business
Inbound Logistics Customs, Import Clearance

MARKET RESEARCH

MACHINERY

Other Associations

Textiles Associations
LARGELY KNITWEAR FABRIC SUPPLIED

Clothing Associations
AGENTS
TPO

DONOR ACTIVITIES

Sourcing
BORDER

CUSTOMS PROCEDURES

BORDER

6.

2st Need: Know your Competitors

Quotas stifle competition

Now competitors are everywhere

7.

2st Response: THE FiT

8.

THE FiT: Benchmarks performance It is divided into 4 broad areas Management & Organization Sales & Marketing Financial Planning Production, Sourcing & Operations
9.

10.

3rd Need: Information on Sourcing and Supply Chain Management Skills

Cost-structure of a woven shirt up to the FOB point
10% 8% 7%

75% of cost = sourcing

59%

16% Fabric Trimmings Cut& make Labour Other overhead Profit

11.

Profit $0.10

WOVEN SHIRT: For every 1 Dollar earned approximately 60cts is spent on inputs

Overheads $0.08 Labour $0.07 Fabrics: $0,59

Profit now $0.16 !

Trimmings:$0.16

Overheads $0.08 Labour $0.07 Input supplies & Logistics

$0.75 $0.69

A 10 % reduction in the supply cost of fabric and A 60 % increase in its Gross profits without increasing sales trimmings =
Any reduction in purchasing and logistics costs has a direct and large impact on export competitiveness
12.

3rd Response: Source-it ITC textbook

1.- New ITC textbook on fabric sourcing, training and supply information
1.Introduction 2.Material Sourcing Process 3.The Buyer/Designer Side 4.The Factory Side 5.Salesmen Samples 6.Ordering Stock Materials 7.Fabric Inspection 8.Final Checks 9.Trim 10.Production Schedule 11.Things Go Wrong The Art of Sourcing 12.Where to Source What 13.Satisfying the Buyers Needs

2.- Training 3.- Sourcing Data Base (SAARC and ASEAN countries)
13.

4th Need: Understand changing markets and adapt products accordingly Numerous competitors and complex trade structure;

Opportunities in higher-end and niche markets with value-added products;

Exploit market potential in other developing countries, especially in a regional context.

14.

4th Response: Providing Information

A new T&C website http://www.intracen.org/textilesandclothing T&C workshops on the business implications and how to prepare for increased competition Development and implementation of tailormade projects

15.

16.

Providing Business Information

17.

Providing Data Analyis

18.

Providing Technical Assistance

19.

5th Need: E-Trade to attract larger buyers

The use of e in light of the quota phase-out Overview of technology developments e-requirements imposed by buyers in the US and EU The role of HGK & Singapore trading houses Case studies of e-successful manufacturers Dissemination and training

20.

5th Response: Business Guide

A Business Guide on e-Applications in the T&C Sector

21.

5th Response: Business Guide

A Business Guide on e-Applications in the T&C Sector

Overview of technology developments e-requirements imposed by western buyers The role of HGK & Singapore trading houses Case studies of e-successful manufacturers

Dissemination and training

22.

Market Pressure on Clothing Manufacturers after the quota phase-out

Rivalry between manufacturers
10 9 8 7 6 5 4

New Market Entrants

3 2 1 0

Threat of Substitutes

Supplier Power

Retail Power

e-influence

e-influence
23.

Likely evolution of the T&C Industry

Today Future

Producer

Conflicts

Retailer

Producer

Retailer

Competition

Competition

Producer

Competition

Conflicts

Customer

Customer

Conflicts

Retailer

Producer

Retailer

Response

Demand

Response

Demand

24.

The Global T&C Value Chain and the use of e-Applications

E-Linking of the Value Chain

Sales Info + Direct Order

Delivery Status Info

Fabrics

Clothing

Agent

Retailer

MARKET

Physical Delivery Clothing Value Chain R&D Inbound Logistics Production Outbound Logistics Marketing to Retailers 25.

6th Need: Develop a Regional Approach

Strategic Response: Critical (country/regional) mass Rules of Origin require regional cooperation Regional/Sub-regional Partnership Regionally integrated industry Link foreign investors to local business
26.

6th Response: Strengthen regional trade cooperation

South-South Trade Development Regional trade development along the regional value chain

27.

ITCs TA to the Clothing Sector

Need 1: Sector Strategy Development Clothing Sector Strategy Development the Shape Need 2: Know your competitors Benchmarking tool The FiT Need 3: Sourcing Information and SCM skills Skills development & regional supply information Need 4: Understanding changing markets New website; workshops; tailor-made projects Need 5: E-Applications in T&C A Business Guide Need 6: Intra-regional trade along the value chain South South Trade Development Approach
28.

1.- Sectror Strategy Develpment

2.- Undersatnding its own and competitors performance 3.- Developing fabric sourcing skills to become full-packagesuppliers 4.- Understanding changing markets

Sales (+Marketing, and Services) Sales (+Marketing, Outbound and Services) Logistics Customs-GSP/Quota
Export Clearance Outbound Logistics Customs-GSP/Quota Export Clearance

The SHAPE

The FiT

Manufacturing
Inbound Logistics Customs, Import Clearance

Sourcing Guide and database Garment-Maps and ITC T&C website

Manufacturing
Inbound Logistics Customs, Import Clearance

5.- Applying e-applications in the

Sourcing
Business Guide in e-commerce for T&C

T&C sector

Sourcing
ITC Tailored Consultation

Implementing tailor made market penetration approaches in line with buyer requirements

29.