Collaborative Networks in the Portuguese Footwear Sector and the

Cluster of Felgueiras

Simão Pedro Ribeiro

, Vitor Ricardo Santos

and Carla Sofia Pereira

Polytechnic of Porto, ESTG - School of Technology and Management, CIICESI - Center for Research and Innovation in

Business Sciences and Information Systems, Felgueiras, Portugal

INESC TEC - Institute for Systems and Computer Engineering of Porto, Porto, Portugal

Keywords: Information Sharing, Knowledge Management, Collaborative Networks, Footwear Industry, Footwear

Cluster, Shoes Manufacturing, Business to Business, e-Commerce.

Abstract: Globalization and the rapid market changes increased the perception in the Portuguese footwear industry that

success in the value chain is closely tied to information sharing, the creation and development of collaborative

networks, and the management of the knowledge of the various partners. Business to Business (B2B) and e-

Commerce (eC) are a key opportunity, and at the same time, a challenge for contemporary companies. We

believe that the insights provided in this paper allow theory and practice to better understand the reasons for

the success of the Portuguese footwear industry and of its key cluster of Felgueiras. Based on the research

conducted, we argue that there is a lack of B2B-eC initiatives in the footwear industry and the existing ones

are still incipient. Furthermore, the existence of only one platform that to some extent addresses B2B-eC, also

indicates that there is a need for greater research and development of approaches/technology allowing

companies to explore opportunities to collaborate and negotiate among themselves.

1 INTRODUCTION

Globalization and the rapid market changes increased

the perception in the Portuguese footwear industry

that success in the value chain is closely tied to

information sharing, the creation and development of

collaborative networks, and the management of the

knowledge of the various partners.

There are several definitions associated with

information and knowledge (Stenmark, 2002;

Rowley, 2007). The different definitions and

concepts, among others, can be seen in the work of:

Zeleny (1987), Ackoff (1989), Wiig (1993), Nonaka

and Takeuchi (1995), Kock et al. (1997), Spek and

Spijkervet (1997), Davenport (1997), Davenport and

Prusak (1998), Quigley and Debons (1999), Choo et

al. (2000), and Bellinger et al. (2004). Nevertheless,

it is commonly accepted that global economics

require collaboration, especially in competitive

sectors, such as the footwear industry.

Regarding knowledge management, its

importance has been widely recognized as

industrialized economies shifted from natural

resources to intellectual assets (Seokwoo and Teng,

2008). Dalkir (2005) defines knowledge management

as the deliberate and systematic coordination of an

organization’s people, technology, processes and

organizational structure in order to add value through

reuse and innovation. Other benefits are the:

development of innovative ideas; organizations and

teams have better results when dealing with changes

and coping with crisis; dealing with coordination and

complex tasks; better strategic planning and decision

making (Davidson and Voss, 2002).

The dynamic and complex networks established in

the footwear industry bring advantages for the

different actors by making them part of a value

system that contributes to their business development

(Bastos, 2011). However, collaboration in the

footwear industry is not an easy task, due to the many

business needs to meet and technology to integrate.

Business to Business (B2B) and e-Commerce (eC)

are also a key opportunity and, at the same time, a

challenge for contemporary companies. For instance,

eC is considered a strategic part of the supply chains,

facilitating the communication among companies,

reducing the time that the supply cycle takes to be

completed and allowing collaborative work

(Modrigais et al., 2015).

Ribeiro S., Santos V. and Pereira C.

Collaborative Networks in the Portuguese Footwear Sector and the Cluster of Felgueiras.

DOI: 10.5220/0006508901970204

In Proceedings of the 9th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management (KMIS 2017), pages 197-204

ISBN: 978-989-758-273-8

The goal of this paper is to contribute to the

scientific domain and practice with an overview and

analysis of the Portuguese footwear sector and its

largest footwear exporting cluster - Felgueiras. We

also address the collaborative networks established,

as well as the B2B and eC initiatives. The insights

provided in this paper allow theory and practice to

better understand the reasons for the success of the

Portuguese footwear sector and of its key cluster of

Felgueiras. Based on the research conducted, we also

argue that there is a shortage of B2B-eC initiatives in

the Portuguese footwear sector. Furthermore, we

submit to the reader that B2B-eC is an opportunity for

the Portuguese footwear sector, especially the cluster

of Felgueiras, to obtain a strategic advantage over its

rivals.

In what regards the structure of this paper, the

methodology is described in section two. The

Portuguese footwear sector and the cluster of

Felgueiras are presented in section three. Next in the

fourth section, the collaborative networks in the

footwear sector and the cluster of Felgueiras are

addressed. Section five regards B2B and eC

initiatives. The final section, sixth, will present a brief

conclusion on the “state of the art” of the Portuguese

footwear sector and the cluster of Felgueiras.

2 METHODOLOGY

For the development of the present paper, the authors

conducted a literature review, which privileged the

analysis of papers published over the last six years in

scientific databases; such as the ones present in b-on

(Portuguese Online Libraries Consortium) and IEEE

(Institute of Electrical and Electronics Engineers)

digital libraries. Due to the lack of sources on

collaborative platforms for the footwear industry, the

authors also analyzed papers older than six years

showcasing earlier efforts on the domain at hand.

Technical reports from professional institutions,

namely associations operating in the footwear sector,

were also gathered. Moreover, due to the specificity

of the content and the topics addressed, where

information is only often available online,

institutional websites were also analyzed.

Finally, it is worthy of note that it was also over

the last six years that the Portuguese footwear sector

experienced an increased growth (APICCAPS, 2015;

Portugueseshoes.pt, 2016b).

3 THE PORTUGUESE

FOOTWEAR SECTOR AND

THE CLUSTER OF

FELGUEIRAS

In Portugal, the footwear production is distributed

among two key regions: the most significant is in the

north of the country, and the less significant is in the

center. In the north, the production is concentrated in

the cities of Felgueiras, Guimarães, Santa Maria da

Feira, Oliveira de Azeméis and São João da Madeira

(APICCAPS 2015). Together they account for more

than a three quarters of the employment in this sector

(Portugueseshoes.pt 2016b). In the center, Benedita

also holds footwear production, however it is less

significant (APICCAPS 2015).

In the fashion industry, the products/collection

portfolio tends to change every 4 to 6 months. This

short design/production cycle means that a company,

on average, may have to manage, design and produce

about 300 to 400 different models for the following

collection (Shamsuzzoha et al. 2013). On the other

hand, each model needs to go through the several

"footwear lifecycle activities", which are: collection

creation, samples production, sales campaign,

production, stocking of finished products, sales

monitoring and new orders (Chituc et al., 2007a;

Chituc et al., 2007b). Consequently, there is a need

for the models to be produced collaboratively because

the production is dependent on stylists, components

producers and suppliers of raw materials

(Shamsuzzoha et al. 2013).

These aspects also contribute to the fact that the

footwear industries and related enterprises are

generally based in the same area; hence it is called the

footwear cluster (APICCAPS 2015). The footwear

cluster is recognized as one of the indisputable key

clusters of the Portuguese economy (APICCAPS

2013), and it is considered the "model" cluster in

Portugal (Portugueseshoes.pt 2016b).

For the purpose of this paper and following

Catanho's (2014) approach, which is based on Porter

and Rosenfeld; a cluster can be defined as a

geographically delimited concentration of

interdependent enterprises with privileged

communication channels that facilitate commercial

transactions and dialogue. They also collectively

share opportunities and threats common to their

business.

Innovation is based on interactions and

knowledge flows among enterprises, organizations

and public institutions. Clusters are thus important for

the creation of these interactions, supporting the

sharing of knowledge and the promotion of

collaborative innovation (Gebreeyesus and Mohnen

2013). As mentioned by Bastos (2011), the

Portuguese footwear sector moved “from an almost

exclusively subcontracted production to the

introduction of proprietary design, control of supply

chains, and even the development of innovative state-

of-the-art technologies and equipment.”

The application of innovative technologies in this

sector has improved customer response time,

decrease of costs, reduced time to market, and

expansion to new markets (Chituc et al. 2007a). The

success of the Portuguese footwear industry is

noticeable in following statement: “In 2014, the

Italian shoes were the only ones with had a higher

average out of the factory price than the Portuguese

shoes” (Sena-Dias et al., 2015).

In the north of Portugal, the footwear sector is

mainly represented by small and medium-sized

enterprises (SMEs), with an average number of: 26

workers in the footwear production industries; 18

workers in the components production industries; and

12 workers in the leather goods production industries

(Portugueseshoes.pt, 2016b; APICCAPS, 2015).

In 2015, according to the Portuguese Ministry of

Labor (Portugueseshoes.pt 2016b), the footwear

sector reached 43,840 workers in its ranks. Also in

2015, the Portuguese footwear sector exported 79

million pairs of shoes and exceeded 1.865 million

euros. As for 2016, the sector exceeded 2 billion

euros. It registered a 49% growth in the foreign

markets, with 81 million pairs of shoes exported,

amounting to 1.923 million euros. Exports represent

almost the entire production of the footwear sector

(Portugueseshoes.pt 2016b). In the recent years there

has been an expansion to more than 30 new markets,

especially to the USA, China, Russia, Colombia,

Canada and Angola (APICCAPS, 2014; APICCAPS,

2015).

The cluster of Felgueiras stands out clearly from

the other regions of the country by accounting for

more than 50% of the exports in the footwear sector

(Ribeiro, 2016). Felgueiras is a city in the Tâmega

sub-region, located in the heart of the Sousa Valley in

the northern part of Portugal. It encompasses an area

of 116 km

and is located 17 km away from the city

of Guimarães, that also belongs to this cluster (CM

Felgueiras, 2016; Leite, 2013; APICCAPS, 2015).

According to Lima (2011), the expansion of the

footwear industry in Felgueiras takes place in the late

1970s. It benefited from the increase in the country's

economic liberalization and the proximity of

Guimarães, which is itself a heavily industrialized

city.

The concentration of footwear industries in

Felgueiras fostered the creation of associations and

companies that offer products and services directed to

the cluster’s needs. There are three important

associations (Lima, 2011; Felgueiras, 2016a):

Professional School of Felgueiras, private institution,

created in July, 1991, which offers among others the

following courses: i) Footwear and leather goods

design; ii) Vocational course of footwear; iii)

Maintenance of footwear and leather goods

machinery.

The Footwear Industry Professional Training

Centre was created in December, 1965, with the aim

of providing training and services to the footwear

cluster (CFPIC 2016b). It provides such training

courses as (CFPIC 2016a): i); Development of

products/collections; ii) Computer Assisted Design

(CAD/CAD-2D) for Footwear; iii) Tuning and

maintenance of automatic sewing machines; iv)

English courses geared towards professionals.

Finally, the Footwear Technological Centre of

Portugal it’s a non-profit association created in 1986

to provide technological support to the companies of

the cluster, namely training courses and research

related to footwear (CTCP 2016b). Among other

training offers are: i) Language courses; ii) Stocks

management; iii) Footwear quality control

(GIALERN 2016).

It is also interesting to note that in the cities where

the footwear cluster is present, Felgueiras and

Guimarães, there are higher indicators of

competitiveness, prosperity and social cohesion

(Nuno and Alves 2014).

4 COLLABORATIVE

NETWORKS AND PREVIOUS

INITIATIVES

In the business context, a Collaborative Network

(CN) is an alliance between geographically distri-

buted organizations, autonomous and heterogeneous

in terms of objectives, culture, operational

environment and social capital, that collaborate to

achieve their goals (Camarinha-Matos 2007).

Collaboration relies on elements that are common

among partners. These factors can be shared interests,

communication infrastructures, business practices,

mutual trust, and policies, among others. These

factors also allow enterprises to gain flexibility and

agility in collaboration (Shamsuzzoha et al., 2010).

According to Bastos (2011), there is an

innovation network with an interesting connection

between the scientific, technological and business

world, where new products are developed, new

enterprises are formed or even recreated. This

innovation network results of the ability to create and

follow a strategy that combines the interests of the

several actors of the sector.

Amaral (2016) argues that in areas where clusters

exist there are usually already collaborative efforts.

However, in these areas a series of formal, but mainly

informal, relations have been put into place driving

the success of these companies. “Often, because of

proximity and even friendship and family relations,

there is a great exchange of technical information,

business contacts, projects, ideas for business

expansion and all kinds of partnerships between

footwear companies. This aspect is of paramount

importance because it constitutes the basis of the

entire footwear cluster, leveraging the growth of all

the companies involved and not just some of them, as

seen in other sectors” (Amaral, 2016).

Such efforts are the result of innovation and

technological development programs, such as

“Footwear Factory of the Future”, “ShoeInov”,

“FootInov2020” and “Knowledge4Foot” (CTCP,

2015; CTCP, 2016a).

The program “Footwear Factory of the Future”

was responsible for the creation of the “Technological

Footwear Cluster” (CTCP 2016a). The Technological

Footwear Cluster currently comprises around 60

actors, including: i) about 20 technology-based

companies producing materials, components and

software for the footwear cluster; (ii) around 20

institutions focused on advanced technology for

footwear and components; iii) 20 scientific and

research actors (CTCP 2016a).

The “ShoeInov” program succeeded the "Shoe

Factory of the Future" and expanded the intervention

to sectorial and multimedia areas. Among the several

projects that resulted from it, the projects

“AGILPLAN” and “SHOEID” can be highlighted.

The “AGILPLAN” consisted of a system for

streamlining network planning. The “SHOEID”

consisted of the application of RFID technology to

the value chain, from the producers to the stores.

“FootInov2020” aims to provide companies with

new skills and competences, exploring the existing

strategic and operational synergies in research and

development, product and process engineering and

marketing (CTCP 2016a).

“Knowledge4Foot” still in effect, aims to

encourage collaboration between industries, research

centers and universities, in order to assess the needs

for skills for innovation and technology transfer

(CTCP 2015).

In September, 2016, the cluster of Felgueiras was

benefited by the “New Course to the North” project.

This project promotes a series of workshops entitled

“Fostering of Entrepreneurship”, whose main

purpose is to strengthen collaborative networks at a

regional scale (NORTE 2020 2016).

The important role that the collaborative networks

have played and, particularly in the cluster of

Felgueiras, are reiterated by Amaral (2016): “In the

case of the footwear sector, and especially in the

Felgueiras region, it is clear the cooperation between

industries that do not have the productive or technical

capacity to produce a certain model, at a given

moment. They designate their competitors, but at the

same time partners, to produce that model/order. On

other occasions, the roles are reversed and everyone

benefits, concentrating in Felgueiras the production

of all the orders requested. The region benefits and

companies grow in a sustainable way, sharing the

risks, but also the successes”.

However, according to Chituc et al. (2007a), a

European-wide survey has proved the lack of

interoperability, information integration and the need

for an infrastructure that addresses the needs of the

enterprises operating in this sector. It was also pointed

that enterprises were not used to work collaboratively

and that there was a lack of solutions in the market

that supported the challenges of collaboration in this

sector (Bastos et al., 2012).

Collaboration in businesses also relies on the

existence of tools, architectures, frameworks and

platforms that support interoperability between

heterogeneous and distributed enterprises.

Furthermore, the nature of the collaborative activities

is heavily influenced by technology (Shamsuzzoha et

al. 2013).

Following this drive, prior initiatives related to

the footwear industry will be presented next.

EFENET - "European Footwear Network for

Electronic Trading", aimed the construction of a

communication infrastructure that ensured the

sharing of information in the footwear supply chain

(Chituc et al., 2007b; Chituc et al., 2007a; Chituc, et

al., 2008).

SHOENET - was divided in two levels: (a)

messaging platform that integrates with the ERPs of

the various SMEs participating in the footwear supply

chain, allowing the exchange of commercial

documentation and follow-up on the operations

carried out; and (b) a set of 17 XML-based documents

specific for the footwear industry (Chituc et al., 2008;

Chituc et al., 2007a; Chituc et al., 2007b).

CEC-made-shoe – the main objective was to

address interoperability between companies in the

footwear sector; namely by encompassing the

business processes, from the collaborative design to

the delivery of the final products. This was a follow-

up project to SHOENET and used the messaging

platform and the 17 XML-based documents from

SHOENET (Chituc et al., 2007a; Chituc et al.,

2007b).

DBE approach - proposed by Chituc et al.

(2007b), represents the application of a "Digital

Business Ecosystem" to the footwear sector with the

objective of achieving interoperability between

enterprises in this sector.

ShoeBiz@PT - promotes a service-oriented

architecture, relying on the concept of business

facilitator (Chituc et al. 2007a).

EFENET and SHOENET projects take a

supply chain management approach. On the other

hand, CEC-made-shoe, ShoeBiz@PT and DBE take

a collaborative network approach (Chituc et al.,

2007b; Chituc et al., 2007a).

There has also been some work addressing

collaborative planning in the footwear industry, such

as the CoReNet Framework project (Bastos et al.,

2012). The main goal of CoReNet Framework was

the implementation of new models for the production

of small quantities of textile and footwear products.

Among other objectives, the project intended to:

support the value chain by collecting data from

consumers to understand their needs; involve

potential consumers in the design and customization

of products; management of the collaboration

between the different partners; monitoring of

products’ quality; management of deliveries/supplies

to customers (Bastos et al., 2012).

Finally, the majority of the existing approaches

only focus on internal business issues and processes,

and do not support strategic decisions of groups of

companies aiming to collaborate to fulfil business

opportunities (Bastos et al., 2012).

5 BUSINESS-TO-BUSINESS AND

E-COMMERCE INITIATIVES

The B2B concept is used to define a commercial

practice, i.e., a transaction between companies

(Kuzmanovic 2012). B2B can also encompass

complex relationships in the value chain, multifaceted

sales processes, a reduced number of customers but

higher volume of merchandise, and the need to offer

highly personalized and differentiated solutions and

services (Alexandra and Roxo 2014).

Innovation has also a positive influence on

companies’ performance, especially on SMEs and

those that operate at B2B level (Alexandra and Roxo

2014). As mentioned earlier, the Portuguese footwear

sector works mainly for exportation and is strongly

oriented towards the B2B market (Alexandra and

Roxo 2014).

The commercial practices between companies

supported by information technology can be defined

as Business-to-Business e-Commerce (B2B-eC).

B2B-eC consists of the trading of goods and services

between companies by electronic means (Alves

2008).

According to Nextopia (2015), “apparel and

accessories” is one of the fastest growing e-

Commerce categories. Within this category footwear

is becoming increasingly popular and customers are

now buying more footwear online. Along these lines,

e-Commerce is and will continue to significantly

contribute to the footwear sector growth (Nextopia

2015).

The implementation of good practices in B2B-eC

is also a key factor for the companies. These practices

are summarized by Oracle (2015): i) reach target

customers by addressing their exact needs; ii)

segmentation of customers by multiple criteria; iii)

provide accurate recommendations for products; iv)

provide easy access to products; v) provide detailed

data/information about products; vi) searches based

on the shopping/purchases history; vii) provide

easy/simplified access to orders and budgets; viii)

provide features for large-scale orders; ix) enable

flexible prices; x) updated content and fast indexing

of pages, especially those who contain dynamic

content; xi) maintenance of catalogues, as well as the

ability to quickly add, remove and edit items.

In Portugal, the landscape of B2B-eC platforms is

quite limited, particularly in the footwear sector.

There are some examples of e-Commerce platforms

developed by footwear brands/manufacturers, such

as: Luís Onofre, Onyme2, JJ Heitor, Guava, Eureka,

Nobrand, Fly London, Ramalhoni and FlexandCo;

which are directed towards individual customers

(business to consumer) (APICCAPS 2014).

As per the research conducted by the authors,

PortugalShoes.com is the only platform that

somewhat addresses B2B-eC (PortugalShoes.com

2017). This platform enables the users and customers

to choose the components and certain details involved

in the shoes production process - from the design to

the brand. It also allows companies to register

themselves as a designer, brand, retailer or

distributor, making them part of the collaborative

network (PortugalShoes.com 2017). In addition,

companies benefit from the know-how obtained

through the interaction between designers, brands and

retailers keeping them in touch with the latest trends

in the sector (PortugalShoes.com 2017).

6 CONCLUSIONS

The Portuguese footwear industry has achieved in the

last decade the status of one of the most modern in the

world, which was the result of the continued

investment in state-of-the-art equipment and

technology (Portugueseshoes.pt 2016a). Contributing

to this outcome, was also the strong market

orientation supported by the push on design, together

with the reconversion of operations that allowed high-

quality production and quick response to orders

(APICCAPS 2015).

The qualification of the sector’s human resources

has also been achieved over the last two decades, with

the number of skilled workers having increase by

twofold (APICCAPS, 2015; Portugueseshoes.pt,

2016b). However, the shortage of human resources,

especially skilled workers, continues to be a

constraint for the industries (APICCAPS 2014).

The strategy adopted by the Portuguese footwear

industry is similar to its Italian counterpart (Lopes

2014). Both the Portuguese and the Italian industries

focus on the design and manufacturing of high-end

shoes, based on such values as the excellent design

and high quality. Lopes (2014) argues that in the same

way as Portugal, the success of the Italian footwear

industry, results of the sharing of skills through

geographical close enterprises, which frequently

belong to the same family for some generations.

We believe that the insights provided in this paper

allow theory and practice to better understand the

reasons for the success of the footwear sector and of

its key cluster of Felgueiras. Based on the research

conducted, we also argue that there is a lack of B2B-

eC initiatives in the footwear sector and the existing

ones are still incipient. Furthermore, the existence of

only one platform (PortugalShoes.com) that to

limited extent addresses B2B-eC, also indicates that

there is a need for greater research and development

of approaches/technology allowing companies to

explore opportunities to collaborate and negotiate

among themselves.

Finally, it is too argued by authors of this paper

that B2B-eC could be one possible avenue for the

Portuguese footwear sector, especially the cluster of

Felgueiras, to differentiate itself and gain a strategic

edge over the competitors, namely its main

competitor – the Italian industry. This would also

allow the footwear sector to reach new markets and

increase size, while at the same time enable a

dynamic collaborative network based on information

sharing and knowledge management.

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