future of textiles is upon...
TRANSCRIPT
FUTURE OF TEXTILES IS UPON USDigitalization enabled Connected Value Networks
Akshar Chandra
March 2018
VUCA – the beast devouring all industries
Volatility
Uncertainty
Complexity
AmbiguityThere may be no ‘right
answer’
Less clarity about the future
Increasing rate of disruption
Multiplicity of decision
factors
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Changing Context:
Shifting Paradigms in Manufacturing
Traditional Manufacturing
1. Scale, scope & size
2. Factor costs
3. Location
4. Resource productivity
5. Standardization
Cost Driven Strategy
• Mass production
• Mass customization
• Longer & inflexible
supply chain
Rapid shift
towards
Evolving Trends
1. On demand – anytime,
anywhere, whatever!
2. Customer engagement –
Co-creation
3. Individualization
4. Ecosystem innovation
5. Cross-industry interplay
Customer Driven
Strategy
• Flexible supply chain
• Constant innovation
• Knowledge intensive
Product focused
Solution provider
Businesses are moving from
products to solutions
Rapidly changing customer needs are driving business models and ecosystem innovation..….
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So what is Industry 4.0 really?
Digitalization led disruption across industries in the offing…..
Industry 1.0 Industry 2.0
Industry 3.0 Industry 4.0
Textile 4.0 – Connected Value Networks
1 4 Ps of Digital Transformation – Fast Fashion
2 Value Network vs Value Chain
3 Triple ‘A’ Supply Chains
4 Blockchain
5 Cyber Physical Systems
6 Machine Learning
7 Last Man Standing
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FAST FASHION – 4 Ps of Digital Transformation
6
1 PULL - Digital Fashion Capitals
Instagram has become the store window display
and Periscope the runway, making next season’s
trends this season’s conversation
2 PLACE - Multi Channel Retail
Fusion of digital and physical – Re-imagined
pricing models, store design, retail experience
and consumer relationships
3 PRODUCTION - Less is More
On demand individualized products instead of
mass customization playing on scale costs
More SKUs, lower inventory & faster churn
4 PRODUCT - Smart Textiles
Next Frontier – Wireless circuitry woven into
Digitally enabled fabrics that will look
completely normal and washable
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Textile 4.0 – Connected Value Networks
1 4 Ps of Digital Transformation – Fast Fashion
2 Value Network vs Value Chain
3 Triple ‘A’ Supply Chains
4 Blockchain
5 Cyber Physical Systems
6 Machine Learning
7 Last Man Standing
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The Era of Connected Value Networks
8
Value
Chain
Value Network
Raw Material
RM to Fabric
Ethical Supply Chain
System Integration
Quality Assurance
Easy Access
Economic Options
Chain of Custody
Product Basket
Demand Intelligence
From 80:20 split in
focus to 100% drive
towards delivery
excellence
Truly collaborative
model to deliver
superior textile
solutions across the
world
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Technology has disrupted established industries
at an unprecedented pace
World’s largest taxi company
Estd. 2009 || Valuation – $72 B
OWNS NO CARS
World’s largest ‘stay’ provider
Estd. 2008 || Valuation – $31 B
OWNS NO PROPERTY
Most popular media company
Estd. 2004 || Valuation – $488 B
CREATES NO CONTENT
World’s most valuable retailer
Estd. 1999 || Valuation – $250 B
CARRIES NO STOCK
HOW THE MIGHTY FALL
Kodak missed the bus on digital photography
Xerox failed to capitalize on its many innovations
Rise of smartphones caught Nokia sleeping
Complexity of global expansion fell giant Tesco
Yahoo failed to innovate quickly enough
RAPIDLY CHANGING BUSINESSES
Forget 3D – 4D printing coming to market
Uberization of customer expectations
Drone-based delivery and mobility solutions
Shape-changing smart materials
Digitized transactions – instant and secure9
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Textile 4.0 – Connected Value Networks
1 4 Ps of Digital Transformation – Fast Fashion
2 Value Network vs Value Chain
3 Triple ‘A’ Supply Chains
4 Blockchain
5 Cyber Physical Systems
6 Machine Learning
7 Last Man Standing
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Triple A supply chains – AGILE
Business Challenge
Across industries, both demand and supply fluctuate more rapidly and widely than they used to
SOLUTIONMost supply chains cope by playing speed against costs, but AGILEones respond both quickly and cost-efficiently
How to miss the bus
Compaq lost market share consistently across 1990s because• Company had large inventory of raw materials and lost to
competition when component prices fell• Incurred more reworking costs when market moved to changed
specifications of PCs
How to crack AGILE supply
chains
H&M, Mango and Zara have all grown at >20% annually since 1990• Agile design process – predict trends, sketch and order fabrics• Continuous market feedback and garment manufacturing based
on latest customer tastes only – reduced number of items on sale• Debottleneck distribution – state-of-the-art sorting and material
handling technologies – 15 days to market (down from 3 months)11
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Triple A supply chains – ADAPTIVE
Business Challenge
In addition to unexpected changes in supply and demand, supply chains also face paradigm-shifting changes in markets
SOLUTIONADAPTIVE supply chains identify structural shifts, relocate facilities,
change supply sources, and at times, revolutionize manufacturing
How to miss the bus
Lucent lost its leadership of the global telecommunications market because it didn’t adapt quickly enough• Failed to identify rise of the Asian market• Realized the advantage of outsourced manufacturing very late
How to crack ADAPTIVE
supply chains
With countless factors at play, Toyota believed the uncertainty was too high to allocate newly launched Prius cars to dealers in USA market based on data models alone. So, in California market, for instance –• Toyota kept inventory in central stockyards• Toyota sold 25% of its Prius output in Northern California and
only 6% in the Southeast (exact opposite of other Toyota cars)12
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How Digitalization is transforming competitiveness
of Nations – Adidas Speedfactory in Germany
Computer Design
Program
Computerized Knitting
Robotic Cutting
Additive Manufacturing
• Styled digitally
• Testing for fit &
performance
Speedfactory
• Auto-calibrating
Knitting machines
• Precision cutting
by industrial robots
Virtual
Computer
Model
• Industrial 3D
printing – more
materials added
everyday
These processes take instructions directly from the computer
design programs so they can switch from making one thing to
another very quickly, without having to stop the production 13© Not to be reproduced without permission
© Not to be reproduced without permission
Advanced Manufacturing – Adidas Speedfactory
ASIAN FACTORIES SPEEDFACTORIES WHAT GETS SOLVED?
SUPPLY CHAIN
LocationLocations with
low factor costsClose to markets
Capturing local needs –
customized solutions
Time to market from first
sketch18 months Less than a week
Quick response to
changing fashion trends
Shipping of latest fashionAir cargo
(high cost)
Road or rail
transportCost management
LABOUR & SKILLS
Shop-floor employees >1000 160 Counter labour shortage
Employee skill requirementMonotonous rare
craft skillsHigh-tech skills Counter skill shortage
PRODUCT RANGE
Innovative shapes and
finishes
Limited due to
human skills
More
customizationsWider range of products
Intend to replicate this model across traditionally high cost developed countries, close to market14
Triple A supply chains – ALIGNED
Business Challenge
Differing interests in value chain of an industry end up reducing the efficiency and performance of companies in the whole chain
SOLUTIONHighly successful companies take care to ALIGN the interests of all
the firms in their supply chain with their own
How to miss the bus
In 1980s, one of critical success factors of HP’s IC division was carrying as little inventory as possible, resulting in• Long lead times in the supply of ICs to HP’s ink-jet printer division• Since customers can’t be kept waiting, HP created a large
inventory of printers – very high inventory costs
How to crack ALIGNED
supply chains
ABG Fibre business has been actively investing in enhancing business development opportunities for downstream industry up to garment manufacturers and fashion designers through its LAPF platform• Identifying future fashion trends, demand projections, etc• Providing technical and market reach support to spinners,
fabricators and processors15
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Textile 4.0 – Connected Value Networks
1 4 Ps of Digital Transformation – Fast Fashion
2 Value Network vs Value Chain
3 Triple ‘A’ Supply Chains
4 Blockchain
5 Cyber Physical Systems
6 Machine Learning
7 Last Man Standing
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Blockchain in Action – Fibre to Fashion Tracking
17
Lot details
Lot number,
quantity, mass
balancing
parameter,
quality
certificate, etc.
captured
PULP
FIBER
CARRIER 1
Shipment and
transportation details
CARRIER 2
Retail Store
YARN
Shipment &
transportation
details
Lot details
Lot number, quantity,
mass balancing
parameter, quality
certificate, etc. captured
Lot details
Lot number, quantity,
mass balancing
parameter, quality
certificate, etc. captured
FABRIC
Knitting or weaving process
Lot details
Lot number, quantity,
mass balancing
parameter, quality
certificate, etc. captured.
CARRIER 3
Shipment & transportation details
GARMENT
Cutting, Printing Sewing, Finishing etcLot details
Lot number, quantity,
mass balancing
parameter, quality
certificate, etc. captured.
CARRIER 4
The manufactured
garment is shipped to
apparel brand’s
warehouse
CARRIER 5
The branded
apparel is shipped
to retail storesWAREHOUSE
Sorting, labeling, distribution planning, etc.
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Value Network Paradigm enabled by Blockchain
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Value Network Tracking
Allows tracking of physical product across the value network players1
Ensures Transparency and Data Integrity
Highly secure and transparent, making it nearly impossible to
change historical records. 2
Increases Efficiency and Speed
Value Chain players can leverage the system for faster settlement process
like stock reconciliation and payment settlements3
Reduce Counterparty Risk
Smart contracts enable “trustless” transactions between multiple
parties4
Increases Revenue and enables Cost Savings
Potential savings and new revenue opportunities through trusted
business, more efficient processes and reduced costs.5
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Textile 4.0 – Connected Value Networks
1 4 Ps of Digital Transformation – Fast Fashion
2 Value Network vs Value Chain
3 Triple ‘A’ Supply Chains
4 Blockchain
5 Cyber Physical Systems
6 Machine Learning
7 Last Man Standing
19© Not to be reproduced without permission
Cyber-physical systems – Connected Value
Networks
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Integrated computation, networking & physical processes
1. Embedded computers and networks monitor and control the
physical processes, with feedback loops where physical
processes affect computations and vice versa.
2. Network of smart physical objects- Devices, etc. – there will no
difference between information and materials, because products
will be inextricably linked to "their" information
FIBRE PARAMETERS YARN FABRIC
Machine Speed
Imperfection Index
Counts Strength
Uster Evenness
Breaking Tenacity
UV %
Oil Pickup
Tenacity
Moisture %
Cut Length
Splinters
Loom/Knitting Speed
Dye-ability
Non-conforming
Visible Defects under
4 point system
VISCOSE INDUSTRY – MANUFACTURING ECOSYSTEM
© Not to be reproduced without permission
Textile 4.0 – Connected Value Networks
1 4 Ps of Digital Transformation – Fast Fashion
2 Value Network vs Value Chain
3 Triple ‘A’ Supply Chains
4 Blockchain
5 Cyber Physical Systems
6 Machine Learning
7 Last Man Standing
21© Not to be reproduced without permission
Build Resilience through
Data Analytics
22
Sheer amount of data generated everyday in Textiles & Apparels Ecosystem is Mindboggling
Demand
IntelligenceSupply ChainProcurement Production
• Product design
through
Continuous
iterative feedback
• Real time
performance
analytics
• ZARA
• JIT / Low
stocking model
• Category
Analytics &
Strategy
• Collaboration
Platforms
• AUTOMOTIVE
• Asset reliability
through
Predictive
Analytics
• Operations
Performance
Management
• CHEMICAL CO.
• Flexible supply
chains
• Integrated
planning and
execution
• Logistics Cost
Optimization
• SIEMENS© Not to be reproduced without permission
Textile 4.0 – Connected Value Networks
1 4 Ps of Digital Transformation – Fast Fashion
2 Value Network vs Value Chain
3 Triple ‘A’ Supply Chains
4 Blockchain
5 Cyber Physical Systems
6 Machine Learning
7 Last Man Standing
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Industry 4.0 Recipe to EXCEL in VUCA environment
LAST MAN STANDING
Amidst all turbulence
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Digitization
Digital Integration
Analytics
Emerging Technologies
• All information and transactions need to be in digital format
• Rapidly evolving smart ERP systems
• Integrated demand and operations planning, asset management, optimal
supply chains and unlocking value through Industrial Internet of Things (IIoT)
• Optimization of demand capturing, production, quality control and logistics
through machine learning systems
• Feedback loops to ensure continuous improvements
• Industrial Robotics
• Virtual Reality / Augmented Reality
• Additive Manufacturing
© Not to be reproduced without permission
© Not to be reproduced without permission
Textile 4.0 and the India Opportunity
25
PRODUCT 4.0 From dumb product to
technology enabled
solution
VALUE NETWORKS Seamlessly integrated
processes across the
ecosystem
INNOVATE Re-imagine Textiles
Paradigm
‘New Ways of Working’
HI-TECH
MANUFACTURING Adopt latest technology
for world class outcomes
IMPROVE EFFICIENCY to achieve superior asset
performance
Cost and Quality
Excellence
CUSTOMER CENTRICITY Customer at the center of
all decisions from top floor
to shop floor
“TO BE GERMANY OF THE EAST & NOT FACTORY TO THE WEST”