future of textiles is upon...

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

2© Not to be reproduced without permission

© Not to be reproduced without permission

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..….


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


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






4 Blockchain


6 Machine Learning

7 Last Man Standing


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


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


OWNS NO PROPERTY

Most popular media company


CREATES NO CONTENT

World’s most valuable retailer


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






4 Blockchain


6 Machine Learning

7 Last Man Standing


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


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


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


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






4 Blockchain


6 Machine Learning

7 Last Man Standing


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


mass balancing

parameter, quality

certificate, etc. captured

FABRIC

Knitting or weaving process

Lot details


mass balancing

parameter, quality

certificate, etc. captured.

CARRIER 3

Shipment & transportation details

GARMENT

Cutting, Printing Sewing, Finishing etcLot details


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.


Value Network Paradigm enabled by Blockchain

18

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






4 Blockchain


6 Machine Learning

7 Last Man Standing


Cyber-physical systems – Connected Value

Networks

20

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






4 Blockchain


6 Machine Learning

7 Last Man Standing


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





4 Blockchain


6 Machine Learning

7 Last Man Standing


Industry 4.0 Recipe to EXCEL in VUCA environment

LAST MAN STANDING

Amidst all turbulence

24

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



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”

future of textiles is upon...

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