Download the full study reports:
(May 2004, pdf, 0.8 MB)
Qualitative report: Key issues,
case studies, conclusions
(Aug. 2004, pdf, 0.9 MB)
The textile, clothing and footwear industries (TCFI), as combined by the e-Business [email protected], represent a traditional consumer goods manufacturing sector including the following activities in the sense of NACE Rev. 1 classification:
While the textile and leather sub-sectors produce mainly raw materials, the downstream industries (clothing and footwear) produce consumer goods. The industry is dominated by SMEs, a large share of which is concentrated in regional clusters. It is one of the most fragmented and, at the same time, one of the most global sectors.
With about 185,000 companies, TCFI employed 2.2 million people in 2000/01 and generated a combined production value of about € 218 million, which accounted for about 4.5% of total manufacturing in the EU-15. The production value of the 10 new Member States has been estimated at about 5% of that generated in the former EU-15 (Source: Eurostat / DIW).
The sector experienced a sharp decline in employment over the past decades, partly due to a substantial rise in productivity induced by deep restructuring and the introduction of new production technologies.
The level of e-business in TCFI is below average compared to other manufacturing sectors studied by the e-Business [email protected]. Company stated objectives and their short-term expenditure plans also suggest a slow pace of change. In fact, firms themselves reported to the e-Business [email protected] survey that their small size is an important reason why e-business does not play a major role in their opeations. The same survey, however, showed that there are some regional disparities in e-business development: TCFI companies from the Nordic countries, Germany and the UK appeared, in general, to be more advanced in comparison to their counterparts from other EU member states.
Gaps in the diffusion and usage of ICT and e-business, particularly for more sophisticated applications like Supply Chain Management (SCM) or Customer Relationship Management (CRM), have been identified in all sub-sectors of the TCFI. On the other hand, a relatively well deployed activity is collaborative online design of products. This may be attributed to the long sector tradition of exchanging product design related data: the introduction of CAD/CAM in the TCFI dates back some decades and is widely diffused even among micro and small companies.
The complex and very fragmented sector supply chain, involves a network of long standing relations among suppliers, third parties and customers. These relations, however, are rarely measured and assessed in terms of response times or prices, with a view to enhancing their efficiency. Even the larger companies have not yet taken a leading role towards supply chain integration and online trading with customers does not appear high in this sector’s priorities.
In summary, the e-business intensity in TCFI is below average in all four dimensions measured by the e-Business [email protected].
There is still untapped potential regarding the use of ICT for many companies in the TCFI. The reduction of both costs and error rates in comer-cial transactions along the sector’s value chain could be the main driver for e-business in the future: Due to the large number of transactions and exchanges, even slight improvements in this domain can produce significant overall savings.
On the other hand, responses to the e-Business [email protected] survey indicate that there still are significant cultural barriers among TCFI compa-nies, such as strong adherence to traditional production and trading patterns. This, combined with the large players’ lack of commitment in guiding innovation at the supply chain level, might plausibly explain the sector’s delay in e-business adoption.
Another driver for e-business may stem from the challenge of unfair competition by counterfeit products, a problem mostly faced by the higher TCFI market segments. ICT could provide the industry with a set of new, powerful tools for monitoring production processes and for tracking products’ distribution from factory to point of sale.
A key challenge for the TCFI, in general, is to increase the efficiency of product development. SME support policies could focus on raising awareness and encouraging the application of e-business technologies in this area. In addition, the following issues are particularly relevant for this sector: