The EU textile-clothing sector is organized in a complex fibre-to-end-use supply chain, which act on a strong cross-border basis from almost every country in the Union. It accounts for 7.6% of all industrial employment and 4.2% of the added value employing some 2.0125 million persons in nearly 110 000 firms.
Opposite to other industries, where consolidation is more advanced, the Textile and Clothing sector has historically been and still is very fragmented and SMEs make up the vast majority of the sector’s players.
An increasingly important aspect of clothing companies’ production strategies over recent years has been the widespread use of subcontracting. Subcontractors can be located in the same region, in other EU countries as well as in neighbouring or other countries (outward processing).
The competitive advantages arising from innovation, creativity, quality and know-how give the industry the potential to be a leader on international open markets. However, as a result of their small-to-medium size, most companies are struggling to launch major investments. Technology has consequently proved an important barrier for this industrial system.
The following synopsis recaps the Textile/Clothing sector main facts and implications:
|High number of players, with a prevalence of SMEs
||Problems of proximity and visibility: low understanding of consumer needs and market trends
Barriers to technology access
|Regional district as segment integrators
End-to-end electronic business largely unexplored, for lack of integration
Few sector champions with investment capability
Lack of industry reference points: low standardisation
Scarce exploitation of technology as a means to co-operate
Imposed, biased company standards, as opposed to conjoint, voluntary definitions
Self-made integration attempts
Relatively small and diverse EU domestic markets
Different business practices
Need to export
Cross-border business: language, cultural, legal and fiscal barriers
The accurate knowledge of information and its sharing with partners are the key-factors, which will guarantee the company success and this for different reasons:
- There is both an overproduction of offer (with regularly increasing imports) and a decrease in the clothing spending of households in a market in recession. Only the companies which will be able to detect the real requirement of the final consumer as soon as possible, will be able to satisfy them and therefore, to maintain or to increase their market share.
There is a need to move towards a customisation of the offer: differentiation is often a purchase criterion: the success of the made-to-measure sale (according to your size) of various apparel manufacturers and distributors is an example of this customisation and of the development of consumer loyalty.
- A quick availability of the offer is required because the consumer is not very patient and can easily move to another shop to find what he needs when he needs it. But, most of the time, the product availability can wait several days after the consumer had made his decision (when the product is expensive, this phenomenon is more likely to happen).
A reactive strategy is not only a technique, which pushes away the stock to the upstream partner, but also a strategy in which everything has to be made to satisfy the consumer.
In fact if the consumer does not buy, all the partners of the T/C/D chain will suffer from this.
This statement leads us to examine a second essential element for the T/C/D/ chain, which are information sharing (necessary to complete information knowledge) and the aspects related with the manufacturing processes.
Today, the fact that the suppliers' commercial services are in contact with the clients' purchase services is not sufficient: all the clients’ and suppliers' technical services (creation, methods...) have to exchange information.
In conclusion, for the downstream of T/C/D chain, the market need is focused on the implementation of reactive strategy of supply according to the consumer demand from the apparel retail trade.
For the upstream of T/C/D chain, that is the activities for the creation of the final goods, the need is focused on the implementation of a corresponding reactive strategy of supply according to the requirements of the downstream of the chain and in the optimisation of the costs and production management, integrating internal and external resources of the company.
In this context, the emphasis is shifted to the careful management of operational stocks of raw materials and semi-finished goods and to the remote control over sub-contracted manufacturing.
This strategy can be implemented only when the conditions for an efficient co-operation among the upstream manufacturers are created and that implies to:
Such conditions cannot be separated from a technologically updated “knowledge management” that encompasses and integrates commercial and technical information.
Integrate the manufacturing cycles, providing reciprocal visibility on the progression of the works
Avoid duplication of operations, capturing the sensible data (e.g.: the quality information) where and when they are created and making them re-usable along the supply-chain
Enable new collaborative business processes
Another peculiar issue regarding the reactive strategy in the upstream of the TCD chain is the need of combining the quick response strategy with the preservation of its product/process know-how which is frequently the ultimate strength of such kind of companies.
This requires a more careful integration of external and internal data flows accompanied by an extension of such data to categories not yet included in the traditional EDI vocabularies and a closer links with their downstream counterparts.
Due to the fragmentation and evolutionary organisation of the workflow between firms of the T/C sector, a set of general models of document will be developed to manage subcontracting together with specific implementations for some of the most known and used processes of the T/C sector (the definition of a set of rules to apply the common dictionary terms to these general models will enhance the possibility for the whole chain to be fully supported).