With the 2005 quota phase-out competitiveness requirements for clothing manufacturers will increase. ITC responds to 6 major needs of SMEs in developing countries (DCs) by providing assistance in the following 6 areas:

1. Sector Strategy Development (the “SHAPE”)

Most DCs are not ready to confront future challenges and uncertainties and need to develop a strategic approach.

ITC guides concerned ministries and clothing sector associations in creating a comprehensive approach (a national clothing strategy). ITC developed a structured thinking process of 10 steps, called the “Shape”. Following the steps, T&C stakeholders will be able to assess and diagnose the industry’s value chain; define actions to overcome problems and to exploit export and sourcing opportunities. ITC guides countries through the 2 workshop process and assists in strategy implementation.

2. Understanding its’ own and competitors’ performance (the “FiT”)

Under the quota system clothing enterprises do not know about competitors and how they perform. From 2005 competitors will be everywhere and enterprises need to know their relative performance, as buyers can freely chose from whom and where to buy.

ITC helps enterprises to benchmark themselves against major competitors, using a software-based benchmarking tool “the FiT”. SMEs get clear indications of their performance in key competitiveness areas, indicating strong areas to exploit and weak areas to improve. ITC trains T&C associations in using the tool and maintains a global benchmarking database.

3. Developing fabric sourcing skills to become “full-package” suppliers

From 2005 onwards clothing enterprises will have to provide additional “full package” services to their buyers. The No. 1 service will be to take over the sourcing of fabrics and accessories. This is difficult, as most DCs have to import all fabrics and accessories, a task that was usually performed by the buyer.

ITC helps clothing enterprises to develop sourcing skills. A new textbook “Source It” and accompanying training material will be applied in workshops. In parallel, ITC developed a regional database on sourcing information of fabrics and accessories, which is available on request. Moreover, ITC organises sourcing missions to find new suppliers of fabrics and accessories.

4. Understanding changing markets

Despite the quota phase-out trade in T&C will remain complex and difficult to analyse. Competitors will become more numerous and so will be the number of trade barriers clothing enterprises are facing.

ITC developed a new website, which provides business information, data analysis and answers to most of the T&C
uncertainties. Secondly, ITC conducts workshops in DCs so that T&C stakeholders understand the future competitiveness requirements and how to confront them successfully.

5. Applying e-applications in the T&C sector

E-facilitated trade becomes a prerequisite to attract buyers in T&C. Manufacturers need to find innovative solutions on how to respond to new “e” requirements demanded by buyers.

ITC elaborates a business guide on e-applications used in T&C, providing an overview of technology developments and “e” requirements imposed by western buyers. The findings can be disseminated during workshops. In addition, advise/training on how to adapt to these new requirements and how to develop tailor-made solutions can be provided.

6. Implementing tailor-made market penetration approaches in line with buyer requirements

Finding new buyers and markets as well as improving product development and design skills continue to be important needs of DC T&C manufacturers.

ITC can help countries to develop tailor-made projects to improve sector competitiveness. This could include any or all of the above-mentioned items as well as other product and market development activities. As future growing markets are found in other DCs, south-south trade development becomes increasingly important for T&C.

In addition, ITC elaborated its possible contribution to the Development of the Cotton Sector. Cotton development is a high priority for most DC and especially African LDCs. ITC’s position paper is available on the ITC website.

For more information: Matthias Knappe, Senior Market Development Officer, Email, Tel.: +41-22-7300 321

Overview: ITC’s Response to the Needs of Clothing Manufacturing SMEs Worldwide
 

Clothing-Specific Needs of DCs	ITC’s TA Response	ITC In-House Cooperation
Lack of a clear sector strategy to confront future challenges	The “Shape ”, a 10 step structured thinking process to reach a national clothing strategy. A process of 2 workshops & Assistance in strategy implementation	Guidance to DC stakeholders given in close cooperation with ITC’s Import Purchasing and Supply Management Section and its value chain approach.
Insufficient understanding about competitors	The “FiT ”, a software-based benchmarking tool. Training in applying the tool to national T&C associations; Management of and access to global benchmarking data.	The “FiT”, was developed together with the Business Advisory Service Section of ITC.
Absence of fabric sourcing skills to become “full-package” suppliers	Fabric sourcing textbook “Source It”; Training workshops to associations and enterprises; Regional sourcing databases (ASEAN, SAARC)	Developed together with ITC’s Import Purchasing and Supply Management and the Trade Information Sections.
Insufficient understanding of changing world markets	New ITC textiles & clothing website; Workshops on future competitiveness requirements and how to confront them successfully.	Website was developed together with ITCs Market Analysis and Trade Information Sections. Workshops conducted in cooperation with the Business Advisory Service Section
Insufficient understanding of the importance of e-commerce and how to respond to new “e” requirements of buyers.	A business guide on e-applications used in T&C. Workshop dissemination. Advise on how to develop tailor-made solutions, following buyer requirements.	Developed together with the ITC E-Trade Unit.
DCs continue to lack product and market development skills and approaches, including in penetrating fast growing markets in the south	Tailor-made projects to improve sector competitiveness, closely following identified buyer requirements.	The penetration of growing markets in other DCs, will be pursued together with the ITC South-South Trade Promotion Programme
DC need and request to develop their cotton sector, including for up-stream industries in textiles and clothing.	A paper was developed, outlining the areas of possible ITC assistance to the cotton sector.	Close cooperation with all concerned sections within ITC