El Programa de la ONUDI para la Competitividad Global de la Industria del Calzado en Pa

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El Programa de la ONUDI para la Competitividad
Global de la Industria del Calzado en Países en
DesarrolloUNIDO Programmefor Global
Competitiveness of the Footwear Industryin
Developing Countries
ORGANIZACIÓN DE LAS NACIONES UNIDAS PARA EL
DESARROLLO INDUSTRIAL
Buenos Aires 31.08.2007

• Dr. Ferenc Schmél MSc. Tech., Ph.D.

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(No Transcript)
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BASIC FACTS

• Established in 1966
• Specialized agency since 1986
• Responsibility to promote industrialization
  throughout the developing world
• Member states 171
• Headquarters in Vienna, Austria
• Representation in 35 countries

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UNIDO MISSION

• A specialized agency of the United Nations
• Focuses its efforts on relieving poverty by
  fostering productivity growth.
• Assists developing countries and countries with
  economies in transition in enhancing their
  sustainable industrial potential.
• Promotes productive Employment, a competitive
  Economy and a sound Environment.

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Core Functions

• As a global forum, UNIDO generates and
  disseminates knowledge relating to industrial
  matters and provides a platform for the various
  actors in the public and private sectors, civil
  society organizations and the policy-making
  community in general to enhance cooperation,
  establish dialogue and develop partnerships in
  order to address the challenges ahead.
• As a technical cooperation agency, UNIDO designs
  and implements programmes to support the
  industrial development efforts of its clients.
  It also offers tailor-made specialized support
  for programme development.

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SUSTAINABLEDEVELOPMENT
Reduced poverty
Improved environment
SERVICE MODULES
Competitive Productive Clean
Objective
Institutional infrastructure
Target beneficiaries
Enterprises
Counterparts
I N T E G R A T E D P R O G R A M M E S
Environment
Employment
Economy
Industrial governance and statistics
Sustainable energy and climate change
Private sector development
Investment and technology promotion
Montreal protocol
Agro-industries
Industrial competitiveness and trade
Environmental management
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GOVERNING BODIES
New York Office
Geneva Office
Brussels Office
Bureau for Organizational Strategy and Learning -
OSL
Director-General
Office of the Director-General ODG
Bureau for Organizational Governance - OCG
Programme Coordination and Field Operation
Division PCF
Programme Development and Technical Cooperation
Division PTC
Programme Support and General Management
Division ADM
Research and Statistics Branch - RST
Trade Capacity-building Branch - TCB
Human Resources Management Branch - HRM
Regional and Field Coordination Branch - RFC
Financial Services Branch - FIN
Investment and Technology Promotion Branch - ITP
Operational Support Services Branch - OSS
Multilateral Environmental Agreement Branch - MEA
Africa Programme - AFR
Arab Programme - ARB
Energy and Cleaner Production Branch - ECP
Building Management Services - BMS
Asia and Pacific Programme - ASP
Private Sector Development Branch - PSD
Information and Communication Management Services
- ICM
Europe and NIS Programme - EUR
Agro-industries and Sectoral Support Branch - AGR
Latin America and the Caribbean Programme - LAC
Investment Technology Promotion Offices - ITPO
Agro- Industry Support
Textile and Leather
Food
Filed Offices - UR
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Product design and development
Techno- economic assessments
Technology centres
Demonstration units/operations
PRODUCTS
Connect to the markets
Develop competitive manufacturing capability
Prove conformity with market requirements
MARKETS
Conform
Compete
Connect
WTO UNIDO APPROACH
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COMMODITIES COVERED
Textile
Food
Leather
Wood
Machines
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Leather-based industries in UNIDO

• Technology oriented programmes
• Regional Leather and Footwear Industry
  Development Programme in South-East Africa
• National Leather Development Programme (NLDP) in
  India
• Tannery Pollution Control Programme in South-East
  Asia
• Raw material improvement (Eritrea, Ethiopia,
  Nigeria, West-Africa)
• Institution-building (Egypt, Indonesia, Kenya,
  Nigeria, Philippines, Russia, Uganda, Vietnam)
• Direct technical assistance (Burkina Faso,
  Ecuador, Tunisia)
• Tannery pollution control (Bangladesh, Brazil,
  Colombia, Ethiopia, Indonesia, Kenya, Nepal,
  Nigeria, Pakistan, Syria, Sri Lanka, Uganda,
  Zimbabwe)
• Capacity building and preparatory assistance
  projects (Argentina, Chile, Guatemala, Thailand,
  Ukraine)

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Improving leather goods manufacturing in Burkina
Faso
Example
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Training of leather cutting instructors in Eritrea
Example
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Footwear and Leather Industry Development Centre
(FLISC)in Egypt
Example
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Common Effluent Treatment Plant (CETP)for 240
tanneries with 13,000 m3/day capacityin
Kasur/Pakistan
Example
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Leather and leather productsindustry panel

• Result of the UNIDO System of Consultations
  (1976)
• Advisory body for the UNIDO (Textile and Leather
  Unit)
• Objectives
• assess achievements
• guide UNIDO on programmes and projects (focus,
  approach, subjects)
• assist in fund mobilization.
• Coverage leather-based industry, namely
• Hides and skins (improvement)
• Leather processing (tanning)
• Footwear
• Leather products (leather goods, gloves, leather
  garment, upholstery, sports goods etc.)

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LEATHER PANEL HISTORY
First session 5-7 June 1978 Vienna,
Austria Second session 5-7 February
1979 Vienna, Austria Third session 19-21
November 1979 Vienna, Austria Fourth
session 11-15 March 1980 Beijing, China Fifth
session 25-27 November 1981 Vienna,
Austria Sixth session 29 November - 1 December
1982 Vienna, Austria Seventh session 14-16
December 1983 Vienna, Austria Eighth
session 20-22 November 1985 Vienna,
Austria Regional Meeting 12-15 January
1987 Alexandria, Egypt Ninth session 24-27
October 1988 Pécs, Hungary Tenth session 4-8
November 1991 Madras, India Eleventh session 29
November - 3 December 1993 Nairobi, Kenya Twelfth
session 27-31 August 1995 Tehran,
Iran Thirteenth session 10-14 November
1997 Bologna, Italy Fourteenth session 13-15
December 2000 Zlin, Czech Republic Fifteenth
session 10-14 September 2005 León,
Mexico Sixteenth session 20-23 May
2007 Gramado, Brazil
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PURPOSE OF PERFORMANCE ASSESSMENT
?

• How do you know that your operation is efficient?
• Recognition of facts about ourselves (especially
  myself) is half way to successful future.
• If your operation is not as efficient as it could
  be then what can you do to make an improvement?

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Company level parameters

• Optimum company size
• 600 employees, 5,000-8,000 pairs/day production
• Minimum size of shoe factory
• 450-1,000 pair/day production
• Location
• Max. 3 days by truck from major markets
• Unutilized premises and equipment certainly
  reduces (financial) efficiency
• Marketing is the key function
• Product development should be under marketing
  management
• Only design and shoemaking skills are special
• Specialists in other areas (e.g. marketing,
  purchasing, finance management, plastic soling)
  are required
• Training of direct labour and management is
  necessary

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FINANCIAL INDICATORS

• Turn of capital
• shoe manufacturer 2.5 times/year
• shoe retailer 2.5-3.5 times/year
• Return on sales
• basic shoemaking 6-8
• branded production 8-12
• niche and special footwear 12-16
• Working capital requirements
• raw materials 30 working days
• work-in-progress 4-10 working days
• finished goods 10 working days direct supply
• 60 working days manufacture and wholesale
• Capacity utilization 88-92

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MARKETING

• Margins
• Wholesalers 30
• Agents 7
• Higher prices paid for services
• Quick repeated orders 10
• Special sellers (e.g. mail orders) 10-25
• Brands
• Good product is a pre-requisite (not only
  promotion)
• Based on long-term strategy
• Advertising costs 3.5-4
• Reputation
• Quality, consistency, reliability
• Health, safety, environment, labour policy

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Production - Cutting

• Die cutting gt 2,000 pairs/style production
• Workplace organization
• 1500 lx uniform and artificial lighting
• die labeling and storage
• cut piece removal and sorting
• waist collection
• Cutters productivity
• genuine leather die cutting gt 2,000
  strokes/8 hours
• manual leather cutting gt 400 pieces/8
  hours
• Leather substitutes to be cut on bridge-type
  machines

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Production - Closing

• Performance can be increased by 30-70 through
• better and regular training (skill development)
• workplace organization and motion studies
• better work measurement
• use of optimal working conditions (lighting,
  space etc.)
• better operator control
• Impact (up to 30) of machines equipped with
• quick stop and variable speed motors
• needle stop and positioning devices
• thread cutters
• programming facilities
• Even smaller companies can justify smaller
  automated (CNC) sewing machines

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Production Shoe assembly

• Productivity
• conventional mechanized 16 pairs/worker/hour
• highly automated 26-28 pairs/worker/hour
• best known today 32 pairs/worker/hour
• Principles for high productivity
• balanced production line
• combination of small operation removes handling
  time
• no shoe should be touched if no physical changes
  made
• Finishing max. 50 of total assembly

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Basic facts

• Global world (multinationals dominate)
• Everything (incl. shoe production) moves and
  changes
• Governments facilitate (no support, no defense)
• Promotion governs (marketing, brand, campaign)
• Selling is an art (contacts, actions, stocks)
• Production and retail are different businesses
• No production secrets (everybody can learn)
• Fashion is made (to be followed)
• Quality makes the difference (and sells)
• Diversification ? costs increase
• Low capacity utilization ? high depreciation
• Low productivity ? high overheads

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Factors influencing the developmentof footwear
manufacture in a given country

• Tradition (Italy, Spain, Czech Republic)
• Availability of genuine leather (Argentina,
  Brazil, India)
• Distance to markets (East Europe, Mexico,
  Tunisia)
• Local demand (Italy, France, Germany)
• Government policy (Brazil, China, Italy, Vietnam)
• Infrastructure (China, South Korea, Indonesia,
  Taiwan)
• Financial stability (South-Korea, Indonesia)
• Investment climate (China, Indonesia, Brazil,
  Portugal)
• Institutional background (Brazil, Mexico)
• Labour costs (China, Indonesia, Vietnam)
• Role played in fashion (Italy, France)

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TO BE(cOME) COMPETITIVEON THE GLOBAL MARKET

• Cheap product
• Low(er) price
• Innovative product
• Monopoly ? extraprofit
• Good service
• E.g. adherence to specification, consistent and
  timely delivery, quick response to reorders
• Aggressive promotion
• Good product is still necessary

OPPORTUNITY
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El Programa de la ONUDI para la Competitividad
Global de la Industria del Calzado en Países en
DesarrolloUNIDO Programmefor Global
Competitiveness of the Footwear Industryin
Developing Countries
ORGANIZACIÓN DE LAS NACIONES UNIDAS PARA EL
DESARROLLO INDUSTRIAL
Buenos Aires 31.08.2007

• Dr. Ferenc Schmél MSc. Tech., Ph.D.