Professional Documents
Culture Documents
PROJECT
AND
Table of Contents
ACRONYMS....................................................................................................................2
I. INTRODUCTION.......................................................................................................... 4
2
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
ACRONYMS
AED Agency for Educational Development
BiH Bosnia and Herzegovina
CAD Computer Aided Design
CAM Computer Aided Manufacturing
COP Chief of Party
CSA Cost Sharing Agreement
CTO Chief Technical Officer
EDC Educational Development Center, Inc.
EI Excellence in Innovation
EU European Union
GTZ Gemeinschaft fuer Technische Zusammenarbeit
ICT Information Communication Technology
LOHN EU abbreviation for labour only outsourcing services in textile industry
NMFA Norwegian Ministry for Foreign Affairs
SEE South East Europe
SME Small and Medium Enterprise
USAID United States Agency for International Development
3
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
I. INTRODUCTION
In May 2010 the Excellence in Innovation (EI) Project submitted an initial briefing paper,
which presented a summary of the key factors related to the competitiveness of the apparel
sector in BiH. The EI Project used those key factors as a basis to identify potential high
impact information and communications technology (ICT) applications that could become
core offerings of the e-BIZ Center that is to be established for the apparel sector. The
findings were presented to USAID and the Norwegian Ministry of Foreign Affairs (NMFA), the
co-funders of the EI Project.
Building on the initial briefing paper, the EI project subsequently conducted a market
analysis of the potential high impact ICT applications that the briefing paper had identified.
Through the market analysis, the project gained a more in-depth understanding of the
market opportunities for an e-BIZ Center that would offer services based on the high impact
ICT applications. This market analysis identifies the high impact ICT applications that could
be used to provide the core offerings of the Apparel e-BIZ Center, and presents a concise
analysis of the market factors within BiH and internationally that would affect BiH SME
demand for and use of the e-BIZ services.
The major conclusion of the market analysis is that fee-based CAD/CAM services and
marketing assistance would generate reasonable demand from firms across the BiH apparel
subsectors. The market analysis results also suggest that several other services would
generate demand from BiH apparel companies, most notably the assistance in labeling and
packaging apparel products and training services in CAD technologies. as many firms
reported that their staff need even basic training in new technologies.
It is important to note that this briefing paper is not intended to provide a detailed market
analysis of the apparel industry; rather, it distills the industry conditions in order to determine
which ICT applications could help to significantly improve the competitiveness of the sectors
small and medium enterprises (SMEs).
4
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
In sum, a range of services could potentially be offered by an Apparel e-BIZ Center. These
include:
CAD services for design, pattern-making, grading and marker making;
CAM services for rapidly cutting material with consistent precision
Internet-based communications to improve the speed with which companies receive
patterns from clients and responsiveness to clients;
Online marketing of BiH products, e.g., with virtual showrooms and other
presentation facilities
Internet-based applications to consolidate demand and source materials at lower
cost
Training, e.g., in the effective use of CAD applications for young designers and textile
engineers (most visited firms stressed that most local designers are not capable of
effectively preparing their designs for production); in apparel design, branding, sales
and marketing
The EI team decided to conduct the survey through a series of one-on-one interviews with
owners or directors of apparel firms in order to ensure that the right person from each
company was being interviewed (preferably the owner) and that the interviews produced the
critical information, comments and leads the EI Project sought from the firms/individual being
interviewed. Furthermore, the EI Project also wanted to eliminate the possibility of receiving
1
Identification of High Impact Applications and Opportunities: Apparel Sector, May 2010
5
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
incomplete forms or having to wait for the completed forms, which regularly occurs when
projects rely on interviewees to complete and mail back survey forms. On-site interviews
were conducted during the two week period from June 21 - to July 9, 2010.
UTOKs representative estimated the total number of functioning SMEs in the BiH apparel
sector in 2010 at slightly over 250 firms. However, the EI expert consultants estimate that
almost one half of this number include extremely small, family-run businesses that may
generate limited demand for the upcoming e-BIZ Center. The key criteria for the selection of
firms to be interviewed by EI included the company size, geographical location (several
clusters exist at present) and sub-sector representation (work clothes, mens suits & coats,
womans fashion clothing, underwear & lingerie etc).
The final list of 68 firms included the largest BiH apparel firms. Therefore, the EI Project is
fully confident that the survey selection represent an accurate sample of BiH apparel firms
for market survey, especially considering that the number of sampled companies represent
nearly half of all relevant apparel firms in BiH.
More than 20% of surveyed firms currently use (in house) some type of CAD for design
of patterns and markers, digitizing, grading, marker making and plotting.
The majority of interviewed firms (76%) expressed strong interest in purchasing e-BIZ
Center CAD services for product design, grading, rapid marker making and plotting as
well as for online marketing, advertising, material sourcing and pattern distribution.
75% of respondents expressed a high level of interest in purchasing CAM services for
fabric cutting
6
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
A relatively large majority (70%) also expressed strong interest in purchasing labeling
and packaging services
More than 90% of respondents have made it clear that e-BIZ Centers services will have
to reduce their current costs and would need to result in faster production cycle and
better product quality in order for them to become the Centers regular customers.
Close to half of all respondents expressed concern that the (lack of) education of their
current staff may represent the problem when accessing e-BIZ Center services.
Therefore, the training programs would generate early demand and facilitate and
maintain the market for the Centers various services.
The survey also generated a number of other comments and leads, e.g., some suggested
that clients may not want to use the e-BIZ Center services unless the Center is located
relatively close to their firm. Although this information is helpful when e-BIZ Center
management considers potential satellite offices or field representative positions, it also
reveals the SMEs limited understanding of the ways CAD can be used to strengthen their
competitiveness. Some comments were less useful, e.g., that the Center focus only on
finding new EU buyers for lohn productions or that it should offer fabric dying in the initial
stage. The EI Projects assessment is that the e-BIZ Center should, from the outset, offer a
variety of services directly or indirectly associated with CAD services.
The market survey results revealed only one additional service that could be an e-BIZ
Center offering: Agent (offline) services linking BiH producers with EU based clients.
The role of the e-BIZ Center as an agent intermediary would also allow local SMEs a chance
to include high tech services offered by the e-BIZ Center into their offer to EU lohn clients
e.g. CAD assisted plotting, marking and grading or even CAM cutting. The market for these
services may increase soon as many respondents reported that EU based clients are
expressing interest in outsourcing plotting, grading and even some of the basic design
functions to their BiH based lohn partners.
Table1: Comparison between High Impact ICT Applications Identified in Industry and Market
Analyses
7
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
demand and source materials at lower cost demand and source materials at lower cost
Training, e.g., in the effective use of CAD Training, e.g., in the effective use of CAD
applications for young designers and applications for young designers and
textile engineers textile engineers
Agent (offline) services for EU based
clients
Improved production efficiency resulting in direct savings for all categories of BiH apparel
producers
Improved design, labeling and packaging for BiH full product/own brand producers
Significant savings on raw materials and labour cost/per garment produced (particularly
after the introduction of CAM services)
Opportunity to expand lohn services offerings to include higher value services and/or to
achieve full service one stop shop status for EU based lohn buyers
The above listed improvements undertaken by individual firms will eventually result in:
Competitive advantage for BiH lohn producers in terms of price, customer service, and
quality in comparison to their SEE competitors
4. Customer Analysis
There are two distinct types of customers for BiH apparel products: EU-based lohn corporate
clients and local and regional individual and corporate buyers. This division in turn
determines the production and marketing set up for most BiH apparel producers and has a
direct influence on potential demand for future e-BIZ Center services. Therefore, the
potential customers for e-BIZ Center services could be divided in two general categories:
1. BiH lohn producers
2. Full product/own brand producers
The majority of BIH lohn producers currently receive plotted and graded designs along with
roles of fabric that they cut manually at their production facility. With trends shifting towards
EU buyers looking to outsource virtually all aspects of the production, the demand for CAD
assisted plotting and grading as well as basic design and even CAM services from BiH lohn
producers will undoubtedly increase in the near future. The timing of the e-BIZ Center launch
would conveniently coincide with that trend.
Furthermore, the market survey revealed that an increasing number of EU buyers are
returning from China or other Asian countries in recent months and they now actively
search for alternative suppliers from Eastern Europe. The opportunity for BiH producers to
8
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
capture some of that market will clearly emerge soon and their offerings to prospective lohn
buyers could be significantly upgraded with usage of e-BIZ Center CAD services.
On the other hand, the full product/own brand BiH producers, especially smaller firms, have
distinct needs and their interest for e-BIZ Center services will be more focused on design,
staff training, labeling/packaging and marketing services.
It is worth noting here that e-BIZ Center may not need to aggressively market its services to
lohn producers in early stages as demand for more services from their EU partners will force
BiH lohn firms to accept changes and obtain CAD and other services externally in order to
keep clients.
Nevertheless, the full product/own brand producers are different and they may need to be
educated about the benefits and cost saving aspects of using e-BIZ Center services. Most
do not face direct pressure from buyers to improve their production efficiency and often are
ready to accept lower profit margins rather than accept changes in their operations, e.g.,
they may continue with manual plotting, grading and cutting processes, despite the cost and
quality advantages offered by CAD and/or CAM.
5. Competitive Analysis
Most of BiH apparel producers (lohn and full product/own brand) producers that participated
in the survey do not use outside service providers for design, marking, plotting and grading
services. No firms offer any of the listed services at present so BiH firms either have or had
to develop the in-house capacity or receive everything from their lohn clients. However,
many respondents reported that their lohn clients are increasingly ready to transfer
responsibility for marking, plotting, grading and even design to their BiH partners.
At present, the schooling and training for designers and apparel production engineers and
technicians in BiH is provided by the Bihac-based Technical Faculty, Sarajevo based Textile
Technical School and by Komas Komerc, the sole official dealer of textile production
equipment in BiH. Therefore, the training programs offered by the e-BIZ Center will have to
be competitive both in terms of its content and tuition fees.
It is important to note that these numbers are extremely preliminary estimates and the final
business plan could diverge significantly from them.
Although pricing is extremely hard to determine at this point (and is ordinarily not included in
a market analysis), the information gathered during the market research provided some
initial guidance regarding pricing ranges.
9
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
V. CONCLUSION
The market survey provided valuable information about the current state of the apparel
industry in BiH and it also corroborated initial suggestions regarding potential high impact
ICT services for this sector, which were presented in the Industry Briefing document.
The major conclusion drawn from the market analysis is that there is quite high interest in
CAD services, marking, plotting and grading.
The large proportion of potential e-BIZ Center customers are aware that the current industry
environment is forcing firms to focus on improving production efficiency and increasing their
ability for rapid response to customer demands. Hence, the e-BIZ Centers marketing
strategy will likely not need to include efforts to convince potential customers about the need
to address those two production issues and instead it should focus on ensuring customers
that the newly established apparel e-BIZ Center will be able to provide quick impact services
that would effectively improve rapid responsiveness and production efficiency in a given firm.
The preliminary cost estimate suggests that an initial investment of approximately 162,000
KM2 may be needed in the first year of the e-BIZ Center operations. The EI Project
anticipates launching the RFA for the Apparel e-BIZ Center with a proposed figure of
100,000 KM3 for the grant.
2
83,000 Euros using the exchange rate from the Bosnian Central Bank
3
51,129 Euros, using the exchange rate from the Bosnian Central Bank
10
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
ANNEX A:
SAMPLE QUESTIONNAIRE
11
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
12
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
7. What is the approximate percentage of sales from LOHN, from FULL PACKAGE
PRODUCTION (customer provides pattern, you provide material, fittings, and
produce the garment), or YOUR OWN PRODUCTION (you design, provide
material and produce the garment)? (Read choices aloud - check appropriate
box)
8. Average price per garment that the company being interviewed gets for its
products
(Reminder: If we know this information for this company, do not ask this question)
0 Independently
0 Through traders agents
0 Through clusters, associations
0 Other_________________________________________________________
_______
13
10. What problems do you have in each phase of production
Phase Problem in Each Phase
Speed Efficiency (wasted time/money) Quality
a. Design for patterns and markers
b. Digitizing
c. Grading
d. Marker making/planning
e. Plotting
f. Cutting fabric
g. Sewing
h. Marketing, advertising
i. Sourcing of materials, e.g., fabric,
buttons, zippers, trim, packaging
j. Sending or receiving designs or patterns
k. Cost of shipping products to customers
l. Improving skills, e.g., through training
Use of Technology
The next group of questions is about how you currently use technology
12. Do you have any of the following equipment on site? Check all that apply.
14
13. How do you use CAD/CAM or the Internet? (Circle all that apply)
Business Outlook
For the next group of questions, Ill ask about your outlook for the next three years.
Total Labor
Hours Sold
(include euro
cent per labor
hour)
15
15. In comparison with 2009, do you expect domestic sales revenue over the next 3
years (by the end of 2012) to increase or decrease? By approximately what
percentage?
Increase Decrease
0 to 10%
11 to 50%
More than
50%
16. In comparison with 2009, do you expect export sales revenue over the next 3
years (by the end of 2012) to increase or decrease? By approximately what
percentage?
Increase Decrease
0 to 10%
11 to 50%
More than
50%
18. Do you prefer more Lohn work rather than doing more full-package production? If
so, please state why
19. In comparison with 2009, do you expect your total number of employees to
increase or decrease over the next 3 years (by the end of 2012)?
If the answer is increase, what change would be likely to cause you to increase
employment?
16
e-BIZ Centers Product and Service Offering
The next questions focus on CAD/CAM and Internet services that a newly established
Apparel Services e-BIZ Center might offer, which would strengthen BiH apparel
companies.
There are many ways CAD/CAM and the Internet could help your business:
LO HI
a. Using CAD to design products 1 2 3 4 5
21. b. Using CAD for grading 1 2 3 4 5
c. Using CAD to quickly make markers 1 2 3 4 5
d. Using CAD for plotting markers 1 2 3 4 5
e. Using CAM to cut fabric 1 2 3 4 5
f. Using the Internet for sales, marketing, advertising, 1 2 3 4 5
or promotion
g. Using the Internet for sourcing material 1 2 3 4 5
h. Using the Internet for distributing/receiving patterns 1 2 3 4 5
i. Using the Internet to consolidate freight and lower 1 2 3 4 5
transportation costs
j. Labeling and packaging services 1 2 3 4 5
k. Trimming services 1 2 3 4 5
l. Marketing services (finding new buyers) 1 2 3 4 5
m. Any other services you need (please 1 2 3 4 5
specify)________________________
__________________________________________
22. If an e-BIZ center is established with the services described above, what
problems do you think you will face while using the Centers services?
17
23. What are the most important criteria for using the Centers services in relation to
your current manufacturing?
LO HI
24. Do you have any questions about the questionnaire, the Excellence in Innovation
Project or the future e-BIZ center in the apparel industry?
This concludes our questionnaire. Thank you again for you time and very helpful
participation.
18
ANNEX B:
LIST OF COMPANIES THAT WERE INTERVIEWED
19
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
20
Branitelja domovine bb
21 Vintex Gornji Vakuf/Uskolje Ivan Kartali 030/495-766 Art72@bih.net.ba
G.Vakuf/Uskoplje
770 Sbbr b.b. Donji
22 Slovenka Donji vakuf Samir utkovi 030/205-323
Vakuf
050/281-604
23 M&D tex Mrkonji Grad Milorad Rudi Pdbrdo Mrkonji grad
050/281-603
030/540-151
24 Men - Travnik Kundi Mustafa mendoo@bih.net.ba Tvornika b.b. Travnik
030/540-152
25 Koa Komerc - Teanj Edib ii 032/666-781 Ciglanska bb. Teanj
032/665-950 Ind.zona Rosulje
26 Eurovez - Teanj Mirsad Ljevakovi eurovez@bih.net.ba
032/665-951 b.b.Teanj
27 032/650-818
Koteks - Teanj Hamza Hoti koteks@koteks.ba Bukva b.b. Teanj
032/650-476
28 Style tex - teanj Zijad Meinvi 032/654-072 Bukva b.b. Teanj
29 032/691-581 Dobojska b.b. Doboj
Trendtex Doboj Jug Zekija Mujezinovi info@trendtex.ba
032/691-018 Jug
30 032/859-051
Ziko - Zavidovii Ferid Mujanovi ddziko@bih.net.ba Dolac b.b. Zavidovii
032/859-052
31 Elchy tex - epe Midhat Karamehmedovi 032/881-332 info@elchytex.com Anke Topi b.b. epe
32 Unikopromet Begov han Zahida osi 032/684-384 Unikom_n@bih.net.ba Begov Han b.b. epe
33 032/618-530
HM Promet - Maglaj Muhamed hrnji minadir@bih.net.ba Misurii b.b. Maglaj
032/618-520
34 032/609-530
Bontex - Maglaj Senajid Husi info@bontex.ba Lijenica b.b. Maglaj
032/609-531
35 032/650-654
Contessa - Teanj Rizah ajanovi alami@bih.net.ba Bukva b.b. Teanj
032/650-138
36 Sendy - Teanj Senad Belagi 032/692-594 sendy@bih.net.ba Kraevo - teanj
37 032/650-233
Napredak - Teanj Mirvet karahmet info@napredak.ba Radua b.b. teanj
032/650-061
38 Sarajevotekstil - Sarajevo Nusret Salin 033/565-610 Dalmatinska 2 Sarajevo
39 Jahorinski potok b.b.
Mraz - Pale Radivoje Kovaevi 037/225-750 mraz@paleol.net
Pale
40 Galtex - Pale Radenko Peki 057/224-685 Srpskih ratnika 52 Pale
41 038/221-248
Zlatna nit - Gorade Kerim Fejzi Zlatna.nit@hotmail.com Viegradska 2, Gorade
038/221-258
21
42 Javor Tekstil - Nevesinje Katalina Saftivc 059/600-623 javornnj@teol.net Kilavci b.b. Nevesinje
43 059/380-481
Pelica maja - Bilee Drago Vujovi Novo naselje 8 Bilee
059/380-482
44 058/620 700 Gavrila principa 9
Tex Moda - Viegrad Slavko Vukovi napredakvgd@teol.net
058/620-981 Viegrad
45 059/370-013 Peka Pavlovia b.b.
Bileanka - Bilea Gojko Vukovi
059/371-208 Bilea
46 Tekstilna.industrija@tel.net
TIM - Mostar Rajna Mandari 036/321-838 Vukovarska 1 Mostar
.ba
47 Mile tex - Prijedor Igor krneta 052/237-176 Mile-tex@poen.net Svale b.b. Prijedor
48 Nikole Paia b.b. Trn -
Carmen Line - Banjaluka Zorislav Stoji 051/585-585 carmenl@inecco.com
Laktai
49 Jasna - Rogatica Mio Bojovi 058/415-711 jasnarogatica@spinter.net Bolnika b.b. Rogatica
50 Karadordja petrovia 47
Padrino BP Novi grad Bojan Blavi 052/751-014 Padrino.ng@gmail.com
Novi Grad
22
USAID/BIH EXCELLENCE IN INNOVATION PROJECT
ANNEX C:
SUMMARY OF MARKET SURVEY
23
Company Product Annual Lohn/ Problems with digit/mark/grad/plot./
product. Full /cutt/Market/Training/
/stuff / CAD Brand
Baby 600.000
Embroidery 5.000
Companies: 68
100% Lohn - 29
90 % Lohn - 11
70-80% Lohn - 4
50-60 % Lohn - 3
Note: Underwear - daily capacity from 500 22.000 ; baby - daily capacity 500
1000 pcs.
7. What is the approximate percentage of sales from LOHN, from FULL PACKAGE
PRODUCTION (customer provides pattern, you provide material, fittings, and
produce the garment), or YOUR OWN PRODUCTION (you design, provide
material and produce the garment)? (Read choices aloud - check appropriate
box)
8. Average price per garment that the company being interviewed gets for its
products
(Reminder: If we know this information for this company, do not ask this question)
66 Independently
13 Through traders agents
0 Through clusters, associations
0 Other_________________________________________________________
_______
28
u. Sourcing of materials, e.g., fabric, 17 16 17
buttons, zippers, trim, packaging
v. Sending or receiving designs or 4 2 3
patterns
w. Cost of shipping products to 2 2 2
customers
x. Improving skills, e.g., through training 15 14 30
Note: Low numbers in plotting because companies have not plotters and problems
Low numbers in marketing because in lohn they have not marketing
Low numbers in Sourcing because in lohn they got all fabrics and materials
Low number in j. and k. because in lohn they received paper patterns and
partners are
Transporter /shipping
Use of Technology
The next group of questions is about how you currently use technology
Plotter
Make __Partner_(5)___Algotex_(5)__,Vetigraf__,Gerber,__Lectra Gerber Acu
Pilot 320,___lestra_______________________
Model __smart 180 (4)_,Vetigraf Quick Jet 180,__Gerber Acu Plot
100,___Stream Jet 180,__Algotex Mark 10,___Lectra Alis Go,__Partner
2004,___Accoplat 320,_Alis 20,___Lectra Alys Go,________________
Software version (very important to obtain version) __Invest plot (2) Algotex
Server, Client,__Just print (2), Vigi Print,________________
Business Outlook
For the next group of questions, Ill ask about your outlook for the next three years.
(include euro
cent per labor
30
hour)
31
15. In comparison with 2009, do you expect domestic sales revenue over the next 3
years (by the end of 2012) to increase or decrease? By approximately what
percentage?
Increase Decrease
0 to 10% 32 3
11 to 50% 17 1
More than 4 -
50%
16. In comparison with 2009, do you expect export sales revenue over the next 3
years (by the end of 2012) to increase or decrease? By approximately what
percentage?
Increase Decrease
0 to 10% 30 2
11 to 50% 22
More than 4
50%
18. Do you prefer more Lohn work rather than doing more full-package production? If
so, please state why
19. In comparison with 2009, do you expect your total number of employees to
increase or decrease over the next 3 years (by the end of 2012)?
If the answer is increase, what change would be likely to cause you to increase
employment? - More business (more demand) 16 x
- Systematic government solutions 7
There are many ways CAD/CAM and the Internet could help your business:
33
LO HI
n. Using CAD to design products 1(8)2(4)3(7)4(5)5(44)
o. Using CAD for grading 1(6)2(2)3(9)4(7 5(44)
p. Using CAD to quickly make markers 1(6)2(2)3(7)4(7)5(46)
q. Using CAD for plotting markers 1(6)2(1)3(7)4(7)5(47)
r. Using CAM to cut fabric 1(6)2(5)3(5)4(9)5(43)
s. Using the Internet for sales, marketing, advertising, 1(6)2(3)3(7)4(8)5(45)
or promotion
t. Using the Internet for sourcing material 1(5)2(4)3(8)4(8)5(43)
u. Using the Internet for distributing/receiving patterns 1(6)2(4)3(6)4(7)5(45)
v. Using the Internet to consolidate freight and lower 1(6)2(4)3(6)4(7)5(45)
transportation costs
w. Labeling and packaging services 1(6)2(5)3(9)4(8)5(40)
x. Trimming services 1(7)2(4)3(8)4(4)5(45)
y. Marketing services (finding new buyers) 1(4)2(2)3(6)4(4)5(42)
z. Any other services you need (please 1(3)2(1)3(3)4(3)5(45)
specify)________________________
__________________________________________
22. If an e-BIZ center is established with the services described above, what
problems do you think you will face while using the Centers services?
23. What are the most important criteria for using the Centers services in relation to
your current manufacturing?
LO HI
24. Do you have any questions about the questionnaire, the Excellence in Innovation
Project or the future e-BIZ center in the apparel industry?
Do you have marketing strategy for attracting clients for E-biz centers?
It is better 10 CAD than 1 CAM!
Do you know about printing machine for textile who are simple, practical and
cheap?
35