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1.

Changing Trade Competitiveness:Changing Trade Competitiveness:

The ITC ApproachThe ITC Approach

66 Technical Assistance Needs

66 ITC responses

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2.

11stst Need:Need: A Sector Strategy (Action Plan)A Sector Strategy (Action Plan)

Develop overall country response

Build critical country massBuild PPP based on strong sector

associations

Make a sector value chain analysis

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3.

11stst Response:Response: The SHAPEThe SHAPE

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4.

A Structured Thinking Process:

11stst Response:Response: The SHAPEThe SHAPE

AnalyseAnalyse

Action PlanAction Plan

StrategyStrategy

BrainstormBrainstorm

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5.

The SHAPEThe SHAPE Ten Step ApproachTen Step Approach1. Analyse Domestic Supply/Exports/Imports

2. Analyse the Value Chain (VC)

5. Group Similar Actions together

6. Prioritize Actions and assign Time Frames

3. Identify problems in the VC and define the Actions

4. Identify export and sourcing Opportunities and define

the Actions

7. Working Group

8. Finalize Strategy

9. Official Launch

10. Implement and Monitor the Strategy

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6.

AGENTS/BUYING HOUSE

ClothingAssociations

CUSTOMS PROCEDURES

MACHINERY

YARNS

ACCESSORIES& PACKAGING

TEXTILE

Mnf. & Exporter

RMG

Mnf. & Exporter

DESIGNINSTITUTE

LARGELY KNITWEAR

FABRIC SUPPLIED

Textiles

Associations

MARKETRESEARCH

DESIGN

TESTING

AGENTS

TEXTILEINSTITUTE

BORDER BORDER

DOMESTIC

SUPPORT SERVICES

TPO

DOMESTIC

RAW MATERIALS

CUSTOMS PROCEDURESBORDER BORDER

DONOR

ACTIVITIES

Other Associations

Sourcing

Business

Sales

(+Marketing,

and Services)

Inbound LogisticsCustoms,

Import Clearance

Outbound LogisticsCustoms-GSP/Quota

Export Clearance

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7.

22stst Need:Need: Know your CompetitorsKnow your Competitors

Quotas stifle competition

Now competitors are everywhere

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8.

22stst Response:Response: THE FiTTHE FiT

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9.

THE FiT: Benchmarks performanceTHE FiT: Benchmarks performance

Management &Organization

Sales & Marketing

Financial Planning

Production,Sourcing &

Operations

It is divided into 4 broad areas

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10.

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11.

59%16%

7%

8%

10%

Fabric Trimmings Cut& make Labour Other overhead Profit

75% of75% ofcost =cost =

sourcingsourcing

Cost-structure of a woven shirt up to the FOB point

33rdrd Need:Need: Information on Sourcing andInformation on Sourcing andSupply Chain Management SkillsSupply Chain Management Skills

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12.

Any reduction in purchasing and logistics costs has a direct and large Any reduction in purchasing and logistics costs has a direct and large

impact on export competitivenessimpact on export competitiveness

A 10 % reduction in thesupply cost of fabric andtrimmings =

AA 60 %60 % increase in its Grossincrease in its Grossprofitsprofits withoutwithout increasing salesincreasing sales

Fabrics: $0,59Fabrics: $0,59

Trimmings:$0.16Trimmings:$0.16

LabourLabour

$0.07$0.07

OverheadsOverheads

$0.08$0.08

Profit $0.10Profit $0.10

WOVEN SHIRT:For every 1

Dollar earned

approximately60cts is spent on

inputs Input suppliesInput supplies& Logistics& Logistics

$0.75$0.75

LabourLabour$0.07$0.07

OverheadsOverheads

$0.08$0.08

Profit nowProfit now$0.16$0.16

$0.69$0.69

!

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13.

33rdrd Response:Response:Source

Source--it ITC textbookit ITC textbook

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.Trim10.Production Schedule

11.Things Go Wrong

The Art of Sourcing

12.Where to Source What

13.Satisfying the BuyersNeeds

1.1.-- New ITC textbook on fabric sourcing, training andNew ITC textbook on fabric sourcing, training and

supply informationsupply information

2.2.-- TrainingTraining

3.3.-- Sourcing Data Base (SAARC and ASEAN countries)Sourcing Data Base (SAARC and ASEAN countries)

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14.

44thth Need:Need: Understand changing markets andUnderstand changing markets andadapt products accordinglyadapt products accordingly

Numerous competitors and complex tradestructure;

Opportunities in higher-end and niche

markets with value-added products;

Exploit market potential in other developing

countries, especially in a regional context.

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15.

44thth Response:Response: Providing InformationProviding Information

A new T&C website

http://www.intracen.org/textilesandclothinghttp://www.intracen.org/textilesandclothing

T&C workshops on the business implications

and how to prepare for increased competition

Development and implementation of tailor-made projects

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16.

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17.

Providing Business InformationProviding Business Information

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18.

Providing Data AnalyisProviding Data Analyis

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19.

Providing Technical AssistanceProviding Technical Assistance

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20.

55thth Need:Need: EE--Trade to attract larger buyersTrade to attract larger buyers

The use ofee in light of the quota phase-out

Overview of technology developmentsee--requirements imposed by buyers in the US and

EU

The role of HGK & Singapore trading houses

Case studies ofee--successful manufacturers

Dissemination and training

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21.

55thth

Response:Response: Business GuideBusiness GuideA Business Guide on eA Business Guide on e--Applications in the T&C SectorApplications in the T&C Sector

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22.

55thth

Response:Response: Business GuideBusiness Guide

Overview of technology developmentsee--requirements imposed by western buyers

The role of HGK & Singapore trading houses

Case studies ofee--successful manufacturers

Dissemination and training

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

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23.

0

1

2

3

4

5

6

7

8

9

10

Rivalry between manufacturers

Threat of Substitutes

Retail PowerSupplier Power

New Market Entrants

ee--influenceinfluence

Market Pressure on Clothing ManufacturersMarket Pressure on Clothing Manufacturersafter the quota phaseafter the quota phase--outout

ee--influenceinfluence

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24.

Likely evolution of the T&C IndustryLikely evolution of the T&C IndustryToday

Producer

Producer

Conflicts

Conflicts

Conflicts Retailer

Retailer

Competition

Competition

Future

Response Demand Response

RetailerProducer

RetailerProducer

Demand

Competition

Customer Customer

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25.

The Global T&C Value Chain and the use ofThe Global T&C Value Chain and the use ofee--ApplicationsApplications

Fabrics Clothing Agent Retailer MARKET

Sales Info +Direct Order DeliveryStatus Info

Clothing Value Chain

R&D InboundLogistics

Production OutboundLogistics

Marketing toRetailers

E-Linking of the Value Chain

Physical Delivery

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26.

66thth

Need:Need: Develop a Regional ApproachDevelop 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

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27.

66thth

Response:Response: Strengthen regional tradeStrengthen regional tradecooperationcooperation

South-South Trade Development

Regional trade development alongthe regional value chain

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28.

ITCs TA to the Clothing SectorITCs TA to the Clothing SectorNeed 1:Need 1: Sector Strategy Development

Clothing Sector Strategy Development the Shape

Need 2:Need 2: Know your competitors

Benchmarking tool The FiT

Need 3:Need 3: Sourcing Information and SCM skills

Skills development & regional supply information

Need 4:Need 4: Understanding changing markets

New website; workshops; tailor-made projectsNeed 5:Need 5: E-Applications in T&C

A Business Guide

Need 6:Need 6: Intra-regional trade along the value chain

South South Trade Development Approach

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29.

4.4.-- UnderstandingUnderstanding

changing marketschanging markets

1.1.-- Sectror StrategySectror Strategy

DevelpmentDevelpment

Sourcing

Manufacturing

Sales

(+Marketing,and Services)

Inbound LogisticsCustoms,

Import Clearance

Outbound LogisticsCustoms-GSP/Quota

Export Clearance

Sourcing

Manufacturing

Sales

(+Marketing,

and Services)

Inbound Logistics

Customs,

Import Clearance

Outbound Logistics

Customs-GSP/QuotaExport Clearance

2.2.-- Undersatnding itsUndersatnding its

own and competitorsown and competitors

performanceperformance

3.3.-- Developing fabricDeveloping fabric

sourcing skills tosourcing skills to

becomebecome

fullfull--packagesupplierspackagesuppliers

5.5.-- ApplyingApplying

ee--applications in theapplications in the

T&C sectorT&C sector

Implementing tailorImplementing tailor

made market penetrationmade market penetration

approaches in line withapproaches in line with

buyer requirementsbuyer requirements

GarmentGarment--MapsMaps

andand

ITC T&C websiteITC T&C website

The SHAPEThe SHAPE

The FiTThe FiT

Sourcing GuideSourcing Guide

andanddatabasedatabase

Business GuideBusiness Guide

in ein e--commerce for T&Ccommerce for T&C

ITCITC

Tailored ConsultationTailored Consultation