Listen to Part 2 of a 2 part series where Anton Wilson, RFA & CPG executive advisor, zeroes in on factories, cost structures, true measure of profitability and the trends of the future.
Transcript
The transcript is close to a literal transcript of the spoken word. Please excuse any grammatical errors, spelling errors or break in the flow. The podcast is a non-scripted conversation with natural flow aimed to deliver value.
[00:00:02.090] – Intro
Welcome to PLM Evolution, your gateway to the forefront of digital thread and digital transformation and all things PLM. On this show, we’ll unpack the perspectives of industry pioneers, bringing you compelling conversations from the dynamic world of product innovation at today’s leading enterprises. Now, here’s your host, Patrick Sullivan.
[00:00:28.010] – Patrick Sullivan
All right. Welcome to another episode of Digital Transformation through the eyes of PLM, formerly PLM Quig 30. And if you’re tuning in, this is part two of a conversation with Anton Wilson, who is a former executive in the retail footwear and apparel industry. And if you haven’t listened to part one, I highly encourage you to go back because there are a lot of deep dives into some very complicated processes and strategies, and Anton broke it down. And as you start to hear some of the brands that he was helping lead the charge in, like Wrangler and Champion and ISOD and Target, you’ll start to go through memory lane of associating to these brands commercially in the marketplace, going all the way back to the transitioning to the 90s into the 2000s. So I highly encourage you to go back and listen to that, because that is a prelude to what we’re about to talk about today with our deep dives into factories and cost structure maturing to the point where PLM and standardizing and processes can be leveraged on a global scale and then diving back into lean manufacturing and single piece flow and talking about domestic manufacturing as it relates to domestic in the United States. So there’s a lot of build up here. So to set the stage for what I just brought up, because those are big topics on factories and cost structure and so on. First off, Anton, thanks for jumping back on the podcast for this second episode. I really appreciate your time and your willingness to do this.
[00:02:19.130] – Anton Wilson
Thank you for having me back. I’ve had a great time with these.
[00:02:22.340] – Patrick Sullivan
Okay, great. So I know I just covered it. If you don’t mind, for the benefit of the listeners, I can kind of set the stage a little bit of some of the high level topics. So let me rewind back to the 80s where the conversation started and apply some of these concepts that we spoke of. So at Wrangler, getting exposure to the cutting process and then VF and getting exposure to the differences and the nuances between fashion and apparel and really this introduction of seasonality in the then getting the opportunity to have exposure. To fabric manufacturing, then transitioning to a new organization, BTK Industries, which specialized in children wear, where you were the COO and you helped pull together and pull off a turnaround for them, where you were break even within a year’s time, which is just incredible with some very strategic moves, including reducing sales, which I was shocked about. I’m in business development, so reducing sales never sounds like a good player, but it was very effective for the strategy that you implemented there. Then you went to a family owned business as a consulting opportunity to help them navigate some growth and some challenges with screen printing, which you had the opportunity to apply some logic and systems and processes to help them with their expansion. Then moved to ISOD and Crystal Brands, where you ran product development, quality and production. And that happened to be, I believe, was your first time helping expand in the offshore. And you really had some significant lessons in translation and how language and culture impacts how people interpret information, from design intent to what’s happening on the manufacturing floor, which was very important. It went to Champion, and we started to dive into the definition of value of time and value of materials. That’s where you were a key individual to help them implement a strategy for offshore development, which you had a lot of success with. And in addition to that, you were implementing single piece flow, lean manufacturing, which will be a huge value, and campaign for folks who are preparing to talk to CFOs. Then, after helping implement that offshore strategy, you were recruited and went to Target for a very successful year I’m sorry, 15 years, where the board was asking for brand consistency, and you were a key member of the executive group to help implement that by doing things that were happening for the first time in the industry. And the strategy was standardizing on color, then standardizing on fit, and then going into fabric and then trim, ultimately for the intent of close to first review approval. So the first time that you guys are evaluating that, the approval happens on the first round. And by implementing those standards, there was a huge increase in go to market and also efficiency across the whole process. So I’ll pause, I’m following my notes. I think I summarize or at least hit the highlights. There’s plenty to listen to and get value from. I just wanted to bring everybody up to speed before we started to go into this conversation today. Anton, was there anything that I missed that you wanted to bring up?
[00:06:24.000] – Anton Wilson
No, that’s quite encompassing. Thank you very much.
[00:06:28.640] – Patrick Sullivan
Sure. I did my best. I did my best. By the way, let me cap off that point in your career at Target, where you came in and that business unit was at 5 billion. You started with nine people, and over your 15 year career, you helped grow it to 14 billion and had 200 people in your group. Which is just amazing to hit those numbers with that amount of people helping.
[00:06:59.110] – Anton Wilson
Just to be clear, it was a group effort. I mean, there was merchandising was involved, design was involved. We put together a sourcing team. I was a cog in a very large, encompassing wheel of making all that happen. We were describing my part, but there were other parts that had to come together.
[00:07:18.670] – Patrick Sullivan
Yeah, well, absolutely. It takes a teamwork to make the dream work. Right? Okay, so we set the stage and what you proposed that you wanted to dive into and I’ll just reiterate it, I know I said it earlier is first topic diving a little bit more into factories and the cost structure associated to that and some of the things that are important to consider. Second, we’ll dive into core member of specs and systems and standardizing on processes and how you can leverage PLM truly at a global scale. And then talking about lean manufacturing, single piece flow and domestic manufacturing where you can still be profitable even having manufacturing in the United States and the importance of it for the overall management of the company and the processes associated to it. So those are the three big agenda items. Are you ready?
[00:08:24.770] – Anton Wilson
I’m ready.
[00:08:25.800] – Patrick Sullivan
Okay, so let’s tackle factories and cost structure first.
[00:08:29.280] – Anton Wilson
So given my background in factories, living, working, starting up, managing factories for years before I went into retail, I had a very good understanding of what was driving cost. But what I noticed is that not just target but people I would talk to in the industry at various trade organizations and such as production began to move offshore, especially to Asia. The Asian suppliers or vendors as we typically call them in this industry, the vendors were really focused on service, full package service. They would be a one stop shop for everything. Whereas historically in the US it was done piecemeal. A designer would work with a mill on fabrics, they would work with factories on production, they would work with the pattern departments and all this different finishes, work with laundries, all these they would be done in separate meetings. Whereas the Asian vendors, they were pulling it all together and they had everything under one roof. And so buying organizations, and I typically call them buyers, although their defined role in their respective organization might not be buyer, it could be sourcing manager, it could be something else. But the people who are actually making these decisions found it much easier to just negotiate the cost rather than to dig into the componentry of cost to understand what was the actual fabric consumption going to be, what was the actual labor content going to be. They would get one number and they would negotiate on that number. So around 2008, 2009, around in there, I started sending some of my team back into the factories. I had team members work with me and depending on what year you’re talking about, it could be as many as nine offices around the world or seven. Mostly I would send them into factories in their different regions and with a checklist to look for, to see primarily how was fabric being consumed. And we observed what I thought we were observed and that is that the factories were not highly efficient in this matter. They would use hand spreading the fabric, hand laying up on the fabric to be cut versus using automated machinery which would give you an exact placement on a table to a planned utilization marker’s call. And so every factory we went into there was no exception to this we found that they were all inefficient, no matter whether it was China, Central America, Vietnam they were inefficient. And so I began to realize that even though we were developing in house communication tools or we were using third party PLM systems or systems development to convey information, we weren’t always asking the right questions. We weren’t looking at what made the cost be what it was. And I extrapolated the numbers filed, and again, I’m talking about 2009, probably. Now, I calculated that we were conservatively leaving $25 million on the table at Target. It’s not a small number. Now, you could say it’s a small number at Target because they were at that time maybe a $50 billion company. But I keep telling people, when you’re on that scale, it doesn’t take a large percentage to create a large annual dollars. So I use basis points. I say it’s like arbitraging things in the financial market. Basis points on a big number can make a huge difference. So that was the start of me looking at the utilization of factors. The next thing that rolled into that, though, was I may jump across some of the topics we want to talk about because they are interconnected very strongly was the realization that domestic factories would give us the visibility that we wouldn’t get in the overseas factories because the overseas vendors were very secretive. They felt like their operating systems, their procedures, their methods, their equipment were somewhat proprietary even though they weren’t that unique to them. And so I started realizing that domestic manufacturing in the US. Had a place and we should be looking at it because our strat I say it this way a good sourcing strategy needs to recognize political ramifications which we now learned as a result of COVID as well as what’s going on with Ukraine and China. We’ve understood the disruption on a global scale. We were calling this out in 2009. Target, to its credit, is doing a great job of looking at global placement where the political risks or the supply lead times might be created risk for. So we’re doing a good job. But we were not looking at domestic. We didn’t realize that domestic should be looked at. Again, domestic manufacturing is not necessarily more efficient than overseas manufacturing, but because it is domestic, we can go into the factories and see for ourselves how things are done. I’ll come back to that in just a moment. But system wise, we also have the issue that whatever PLM system we would be using we write down in a PLM system what our design objectives are, what our fit criteria are, what our trim standards or fabric standards would be. We made an assumption that the more detail we put in there, the greater the likelihood of getting what we wanted. What we didn’t realize or didn’t take into account was that when it went to China, for example, who was world’s largest trading partner, that they were translating it sometimes two or three different times, depending on where the work was going. And we wouldn’t necessarily know whether they were reading what our intent was originally, and we wouldn’t know whether what we were getting was anywhere close to what we asked for. So again, domestically, you don’t have that problem when you’re talking to someone in your native language and their native language is the same language, more easier to get what you want. So we realize that systems alone don’t necessarily assure that clear communication is happening. And so again, it’s sort of pushed back into, well, why are we looking at domestic labor, domestic resources? I’m going to jump away from Target for a moment now and go to after I retired, I started doing some consulting work, and I still do some consulting work. I work with other consulting firms on different projects. And one of the ones that I was working with is an organization called TC Square textile clothing technology Corporation. They were a government funded or government supportive organization starting in the look at technology and use it as a basis to either make or keep domestic manufacturing competitive. They had a tool that was developed at North Carolina State University in the 90s called the Sourcing Simulator. It’s an amazing tool in that you can answer probably I think I calculated one time 60 some different variables in your sourcing strategy, in your sourcing and retail or wholesale strategy. Things like when are you going to mark it down, how much will you mark it down? How many deliveries do you want? When do you want them to be here? Those kinds of things. And what it pointed out was the AHA. For me, it was the big AHA. And it goes back to the domestic manufacturing versus international manufacturing. And that is that full package sourcing bases, its placement, its financial placement, decision on gross margin, the margin that you get when you purchase it based on what you think you’re going to sell it for, it didn’t take into account the impact of those post acquisition hits to profit. Again, markdowns close outs, lost sales, because you had the wrong mix. You had to plan months in advance your colors or your size assortment or even your styling assortments, and you chose wrong, you thought wrongly, so you had the wrong product or you had not enough of the right product. When you looked at what the Sourcing Simulator showed us is that net margin, the profit that you have when the last piece is gone, is what really counts. And when you look at net margin, it allows you to look at domestic sourcing differently because domestic sourcing allows you to place your decisions much, much quicker, much more in tune with the market. You can use domestic sourcing to fill in lost sales or missed sales to cover as units are sold out. You can backfill them very quickly versus having a 30 day or 45 day window from Asia. You might have a two week window from the US. And so all these things came together for me to say that almost every company should have an all encompassing strategy of sourcing that uses global sourcing where it’s appropriate, and domestic sourcing where it’s appropriate. So if you have a product like white underwear, for example, buy it in the cheapest place in the world, labor’s cheap somewhere else in the world, in the US. Buy it where you have no risk of having the wrong color. It’s all white. It’s underwear the style that you never goes out of style. Buy it domestic in the market. But if it’s a high fashion item with a high value and high margin, you can absorb more direct labor value because US. Labor is more expensive. But you can sell it all at full price. There are no markdowns, there is no clearance being done. And so your actual profit is greater even though your gross margin is lower. Like I said, that was a big AHA for me. And I’ve run multiple simulations with these, with different clients, different customers, and showed them that buying globally doesn’t always give you the best profit potential, even though you have a higher gross margin.
[00:20:09.810] – Patrick Sullivan
So I’ve taken a lot of notes in that section. So in my mind, I’m thinking about a matrix of sorts because there’s high volume, low fashion in the bottom. If you’re imagining just regular XY axis, and I’m flipping it over, thinking about the price of the item, high volume, high standards, bottom left corner, in terms of, like you said, underwear was an example versus up in the top right, high fashion, high dollar, right? And then your sourcing strategy is another element. So as the price continues to go up and your sourcing strategy in that bottom left corner that I described, you could go for low labor costs because it’s consistent. There’s not a lot of variation associated to it in comparison, right? And then in this top right corner, high labor costs, high dollar value, quality details, materials, all of those things contribute to that. But there’s a differentiated market there and there’s more margin opportunity. So your sourcing has to be flexible to accommodate the potential scenarios where you have the markdowns or you chose the wrong color. Am I saying that right? There is this balance that here, fine, get it as low cost as you can but depending on the volume, it starts to make sense. One, it’s a moving target depending on what you’re selling and what you’re designing, right? In terms of what balance, of what your sourcing strategy is. Am I saying that right?
[00:22:08.830] – Anton Wilson
Pretty much. If you were to use this matrix, you would also want to say, well, what percentage of my total sort is going to be in each one of the matrix boxes? Okay. And you would find that probably the percentage of your assortment that would be viable opportunities for domestic sourcing is probably small because unless you are a brand or a retailer who has a sub brand within them where it’s all high fashion, high value, you would probably find that the majority of your product falls somewhere else. So I’ll use unused Target as an example. Out of those 5000 styles that we might develop new each year targeting maybe two or 300 of those would go should be considered as domestic opportunities. The rest of them could be considered global and then within global it would be maybe Mexico is one option because Mexico is a little bit higher labor and a little bit faster delivery than China, for example. So you see it’s all part and parcel looking at your whole matrix and realizing that everything has a place. It doesn’t all have to go all to the same place every city is.
[00:23:34.780] – Patrick Sullivan
Right. Got it. Okay. So is there anything else that you want to add on the cost structure related to factories? I think that was a pretty comprehensive and it threaded into the other topics as well.
[00:23:50.650] – Anton Wilson
Yeah. While we’re on the topic of factories, I want to talk about and again, it’s kind of hard to separate factories from sourcing strategy. They’re connected very heavily and that is I talk about how the Asian companies in particular made it easy for buying organizations with this concept of full package. The problem with domestic sourcing as we know it for the most part today is they still don’t always provide full package service capabilities. Those that do are going to be in a much better position to be seen as competitive with global resources. So they could not only show them how net margin could be improved, but also say, you know, I can find the fabric for you, I can find the trims, I can do all this for you as well. That’s something that also has to be taken into account.
[00:24:49.790] – Patrick Sullivan
Yeah, I mean it’s really shifting responsibilities to the company that you’re outsourcing. So you called it Asian suppliers and I assume just US suppliers as well. Right?
[00:25:02.260] – Anton Wilson
Yeah.
[00:25:04.290] – Patrick Sullivan
And it’s all around whether who wants to take on the brunt of the work. Right. Is there a shift in pricing when it’s an all inclusive deal?
[00:25:17.590] – Anton Wilson
When you say pricing, you mean the acquisition cost from the supplier or you mean the wholesale retail price?
[00:25:23.320] – Patrick Sullivan
Acquisition cost.
[00:25:25.030] – Anton Wilson
So the problem with looking at the cost of acquisition production goes back to the idea of the gross margin argument. Or rather the support for gross margin is that theoretically, acquisition cost is actually a result of starting with what you’re going to wholesale or retail for and figuring out what your debits are after you have the product at hand and then coming up with what you think your landed cost or your acquired cost would be. And that’s what drives these decisions. The problem with comparing gross margin modeling, price modeling is that domestic manufacturing will always exceed the cost of offshore manufacturing because US. Labor costs are higher. And that’s why if you only look at gross margin as your placement decision deciding factor, and you don’t look at the ability to turn fraud faster and align inventory on hand to sales, actual sales demand, if you don’t look at those things which debit against your ultimate profitability, gross margin will always drive you to offshore shorts. Domestic sourcing can’t compete in that regard. And so one of the things that I try to explain to people, including Target, is that over the last 30 years, using full package pricing and working with Asian vendors, you’ve been spoiled and you’ve set up your whole reward system. You reward the performance of your sourcing organization or your buying organization on gross margin, on hitting gross margin goals, but you don’t link that to your profitability. At the end of the day, when the last piece is gone, there’s a disconnect there. So they don’t see that. They only see if I don’t get the gross margin, I’m not going to get my bonus. I’m not going to be able to save my job. And so the reward system encourages this. Even though I think in the first session we talked about, I think you talked about and I mentioned come back to about meeting with CFOs, when I meet with a CFO and I walk them through what the difference is with looking at net margin as the driver of placements, their eyes light up, they get it. They send me down the hall to talk to the head of sourcing or the head of Merchandising or whoever, where the buying organizations are. They look at me like I’ve got three heads.
[00:28:08.030] – Patrick Sullivan
I don’t know how much you’ve spent time with engineers, and I’m going to say discrete, but in other industries outside of retail, footwear and apparel and PLM historically grew out of PDM like CAD management within engineering. And the design is finished and the design, the bill of material is handed off to the manufacturing group to go and make the product right. And so I had an appreciation for your translation story of design intent versus how it’s actually built. Because there’s a difference. There’s almost always a difference. And to get engineers historically to change the way that they design and create their bill of material for manufacturing is a big effort and there can be resistance to change. And it was interesting, I think the majority of time the engineering groups are bonused on how quickly they get their designs out. They’ll measure it from quote to getting a bill of material out. They’re not measured on the quality of the design. They’re not measured on waste that happens on the manufacturing floor in case the design is inaccurate. And the guys on the manufacturing side are kind of like agile engineers. They’re figuring out a way to make it work but that whole process is not associated to the original design. And so we’ve said it before, we’re like, well, let’s just change the compensation structure. They are bonused out on the efficiency of how the actual product is built versus how it’s designed. Just how it’s designed. So we haven’t had any takers yet.
[00:30:21.110] – Anton Wilson
Well, your batting average is about as good as mine.
[00:30:29.050] – Patrick Sullivan
That’s good. All right. We’ve talked about that topic and we’ve kind of touched on some of these other you know, I’m really interested and I brought up PLM, right. Houses a lot of information around design. And do you agree that it is a strategic platform for which to achieve corporate objectives? Let me ask that one first.
[00:30:59.570] – Anton Wilson
Yes, I do. Let me back up. From what we know, the answer is yes. But let me give you a different perspective on it. One of the things that I talk about transformative that’s needed most people, even though we spent what, the last 20 minutes talking about cost and labor costs between the US. And overseas and all that, as being a major driver in today’s fashion industry. One of the bigger, hard to measure, but nonetheless high impact hits towards profitability is speed to market. And the idea of being able to go very rapidly from an idea to a product that it can convert itself can make a huge difference in retail sales or wholesale sales. And the ability of a system to house all the information that’s needed if it’s entered and managed collaboratively, as opposed to, for example, we enter everything we want in our corporate office and you in a global office overseas. You just work with the data. How about I start something? You add to it, I add to it, you add to it. And we literally knock things out in a span of one or two days if necessary. Having a PL in a system that can do that and encapsulate all of the requirements and all of the expectations is tremendously important. I do believe that and one of the problems that I have experienced is in the implementation of PLM in the earlier days. I’m going back now maybe 15 years actually. At Champion, we started implementing a Rudimentary rudimentary. It was an early PLM type system that was a system that NASA used to build rockets. True story. And after about six months working on our business, they said, we’ve never seen a business as complicated as know, when we build a rocket, we build it once, we build it twice, we build it three times. Parts don’t change. The fashion, the style doesn’t change the performance aspects don’t change. You’re talking about stuff that every three months, everything is brand new. And so it was a learning experience that’s the point is that PLM system has to be so robust that the dialog and the data that’s being collected is coming from both sides. And that’s what a good PLM system should do.
[00:33:42.280] – Patrick Sullivan
Yeah, we’ve seen good implementations and challenging implementations, as I’ll say it. And the most successful implementations that I’m part of and have seen are the environments where the executives are brought in, bought in. They have set the vision, and they have freed up either the dollars or the people. And the right people that have the right experience to be able to be empowered, to make the decisions, to leverage the intent of the software, not just recreate the processes and try to put it into the system. I think we talked about some of that in the last conversation. You have to be willing to accept some standardization, which allowed you to help organizations grow right. And then leverage the intent of the design in the way that it should. So processes need to be updated. People need to change how work is being done. And that can only really be done successfully if people are collaborating and building on ideas.
[00:35:03.130] – Anton Wilson
Yeah, change management. Change management is probably my observation is probably the most significant factor to successful implementation. Or not. I’ve seen so many companies as a consultant, I’ve seen so many companies say, well, we do it this way. We want the systems to do it that way, too. Well, no, that way isn’t the right way to do it, and it never was. It worked for you because you built it from the ground up. But this system has been tested across multiple companies, and this actually works. Give it a shot. And of course, there’s always the foot draggers and the ones that say, no, I’m used to seeing it this way. We’ll get used to seeing it that way. Okay.
[00:35:50.750] – Patrick Sullivan
And just for clarification, for people listening when you say change management, because we’ll have engineers listening to this too, we’re talking organizational change management. How do you get people to accept he change and the impact to their role and then structured accordingly? So you are leveraging a system and adopting a system to achieve the benefits and the ROI that the company is after. All right. Perfect now, well, we kind of tied in the PLM side of things, and we’ve touched on domestic manufacturing and sourcing and profitability associated to that. If we look to try to tie all of these concepts together in the trajectory of your career and we think about what’s happening in the world today, what do you think is a significant trend that is happening and or a direction that you feel people should be buying into in order to continue to adapt to what’s happening in the world today?
[00:37:05.750] – Anton Wilson
When I use a word that’s so overused, it’s so cliched, but I don’t know the better word, and that’s transparency. The idea that end use crusaders are continuing to evolve on this timeline. Of wanting to trust their brands, brands that they love and like to be doing the right things for everybody in their broad organization for the world. You can layer in sustainability if you want to or environmental impacts, you can layer in ESG, all the ESG components when you talk about child labor, et cetera, et cetera. All those things roll up into this idea of transparency and being able to I think brands need to be doing a better job of showing all of the things that consumers would like to know about a product without necessarily divulging trade secrets. I’m not talking about divulging trade secrets but they should be able to track where the cotton came from. Did it come from Uzbekistan for own? Where was it manufactured? Was it manufactured outside of the Oyga region in China? They want to know that you’re doing right and it’s not a groundswell but you can see the emphasis on it continuing to increase and I think that’s a compelling thing. Systems that can be more easily embedded than we think it doesn’t have to be a unique standalone system that tracks all this. It can be part of a PLM system, it can be part of an ERP system, it can be part of anything of that nature to monitor or report on what the company is doing that’s on the right things. Sustainability, I think has been a bigger buzzword but the reality is sustainability is hard to measure. You really can’t measure what sustainability is. You can only say well, I did this or I did that and that is less harmful to the environment than what I could have done. But it doesn’t really say that it’s the best that can be done. The transparency is either there, it’s not. You either show it make it possible to be seen or you don’t.
[00:39:51.420] – Patrick Sullivan
How do you feel? Well, what’s an example of a company that you feel is fairly transparent?
[00:39:59.660] – Anton Wilson
State of may’s all? I think people in the industry would point to Patagonia and say that Patagonia has always been about walking the talk. They talk about wanting to preserve the environment and they do things like say don’t buy this. If you don’t need it, don’t buy it and if you are tired of it, give it back, we’ll find a place for it. That’s the kind of thing that is like a big first step. But the other part of it is there are more and more companies now are starting and there are software that do this that allow you to they actually show you a map of the world and they show you the line where product leads from here to there as it is being assembled. So you can see whether your product was made in Myanmar, for example, versus being made in Vietnam. So I don’t think anybody’s doing it perfectly well. The ones that are doing it better today tend to be smaller companies. There’s a company in North Carolina that has a program where they buy everything locally. They actually work with the farmer to project the cotton crop they’re going to need. They work with the ginning operation to gin the cotton to their standards. They work with the spinning mill and the knitting factory to produce the fabric that they need. It’s all done within 100 miles radius. For example, their headquarters operation. They use earth friendly dyes and inks for screen printing. They’re a very small company. They’re not that large but they have this mindset and they’re living that mindset on a daily basis. And they have a QR code where they actually have a thread. They have a system where you can look inside your shirt and it used to be a thread color and you can go to their website and you put in that thread color and it will show you everything that happened to that shirt. They call it dirt to shirt. So you see smaller companies that are able to do this because they’re flexibility. They’re not so embedded in these massive long supply chains. Those are the kind of things that I think more and more companies could do and software would enable that. You don’t necessarily have to have an army of people who track everything. Blockchain technology is obviously a part of that where you have assurances that it’s not smoke and mirrors, it’s real. But those are the things I think that is sort of like the next software horizon, the next system horizon that.
[00:42:39.870] – Patrick Sullivan
Yeah, that’s an interesting and thought provoking concept. The Patagonia example is a good one and then your pulse on smaller companies that are agile enough to implement it from the ground and have it be a core philosophy. I think small companies really have a luxury of seeing what’s trending and being able to act on it without it can be more of how they build it into the profitability versus an organization that’s very well established with deep roots across the globe and trying to uplift that. That takes, one, a supportive board and then two, the right people in place to be able to execute that consistently with the patience and vision to make it happen.
[00:43:34.800] – Anton Wilson
The next thing that I think is going to I think you’re starting to see more and more of this now very small scale, what I call the digitization of manufacturing and the integration of that with product development. So we’re now getting to a point of having smart machinery, machinery that can actually record stitches that are applied to a seam to an individual product. And if you think about that, that’s a driver of cost but it’s also a driver of quality, it’s also a driver of style. And if you have in this communication channel that we talked about, where it’s two ways, where it’s coming and going, if your system can capture feedback from the machinery, you have a greater assurance of getting the quality that you want. You have a greater assurance that you’re costing it because you’re now getting into the driver of cost. And you can look it up anytime. You can look and see what’s going on. You can even pick an individual machine. This is very early ExOne, but some people calling this Industry 4.0. It’s the idea of having not necessarily robotics, not necessarily automation, but digital tracking of performance and linking it back to your chronic intent.
[00:45:02.000] – Patrick Sullivan
Yeah, I’d be interested to hear your thought. I deal a lot in the non retail footwear and apparel industries and industry 40, well, 2040 and the concept of IoT and off time on the manufacturing floor and different ways to collect data and then having the talent in house to be able to pull the right data together to make the right analysis. There’s a lot of advancement that needs to be done there and you bring up a lot of interesting concepts. I mean if the world of model based design and 3d has been happening for a long time in these discrete manufacturing and non RFA world it seems like RFA has been playing around with it and then how to apply it in an effective manner so it’s traceable and to your point, transparent, at least within the organization, as it flows through the maturity of creating the product. It’s catching now. And then your digitization of manufacturing concept, it’ll be interesting to see how long it takes for that one to evolve because just in the examples that you described is very powerful. But you’ve got to have the software, you’ve got to have the machines, and then you’ve got to have the ability to really break that data down and apply it in a good analytical fashion to make good decisions.
[00:46:46.060] – Anton Wilson
That’s actually the component that we probably don’t focus enough on because there are machines out there now that can do this. Not on every operation, not on every machine, but you can add it on as a feature, but the ability to be analytical about it, what am I looking for and what am I going to do with it when I find I don’t think we have people who really understand that yet. That’s going to be the big learning purpose.
[00:47:19.160] – Patrick Sullivan
Well, I’d be willing to bet that you could help expedite both journey to pull some of those things together. Your experience that you’ve been able to share with us over the last 30, 40 years takes these Lego blocks and pulls it together into really just, I don’t know, a design, a building, a house, whatever metaphor you want to use. You’ve got a lot of knowledge that’s very applicable. And the people that I’ve seen who are able to do something with data, the best through the analytical eye are the ones that know where to look.
[00:47:58.850] – Anton Wilson
Yeah, for me, I actually go back to where I started out. I said I started with the old Bluebell Organization later became Wrangler, who had one of the best training programs in the industry, if not the best. They used to tell us that the two most important people in this company are that lady who’s sewing the garment up and the person selling it at the end of the day. And all we’re all here to do is help, is get out of their way, make it possible for them to do their jobs, fix whatever is going wrong. And so you’ve learned to be analytical because you’ve looked at every aspect of interruption or interference or disruption, negative disruption, because positive disruption can be a really good so, you know, that philosophy has carried just I go back to the Toyota model. If you don’t teach people, if they don’t really know how product comes together, they just know it happens in this great void 10,000 miles away. There’s a limit to what they can do at analyzing and understanding the information that can be made available to them. There’s a place where people can do that, but you got to start at the bottom. You need to learn how that data happens. When I was an engineer, an industrial engineer, my first role in the factory was counting stitches. So we knew that this seam was ten inches long and twelve stitches per inch. I bet every once in a while we’d check it. Are there 120 stitches in there? Plus or minus. Those are the things that were important. It led itself to quality, it led itself to the styling, and all those things came together.
[00:49:50.860] – Patrick Sullivan
Yeah. Well, I really have a huge appreciation for all of your experience and your ability to I mean, when we first spoke a year ago, sorry it’s taken this amount of time to be able for us to have this conversation. But I knew back then, from just getting that limited exposure to your career, that you have had those unique scenarios where you know how to uncover the value because of, well, just what you described. You were counting stitches and associated it to quality. And you’re not just using it as a buzzword. You actually have examples to where it started with that simple task of counting the stitches. But it can lead to huge amounts of efficiencies in quality, fashion, speed to market, cost, all of those things. So this has been a huge education for me, and I want to thank you for sharing all of your knowledge with us in not one episode, but two. It’s been an eye opener for me, and really fun, too.
[00:51:06.740] – Anton Wilson
Well, thank you. It’s been great for me. All the stuff that we talked about, I don’t think about anymore. It’s actually been good for me to revisit some of those and think about how those steps were or how effective me and my team were to make these kinds of things happen. So I appreciate that.
[00:51:25.190] – Patrick Sullivan
Yeah, well, great. I’m glad you enjoyed it. And I know that many folks who listening to this are getting great amount of value, too. And if anybody’s like me, there are some podcasts where I can only consume about 15 to 20 minutes at a time, and I take notes. And what is an hour podcast takes me 5 hours to listen to because I’m taking notes as I’m listening. And this one will probably take if I were listening and not interviewing and taking notes and hearing it for the first time, I think it would take me about six to 8 hours because there’s a lot of value in here. So thank you for that.
[00:52:01.510] – Anton Wilson
Thank you.
[00:52:02.740] – Patrick Sullivan
All right, so, everybody, thank you for tuning in. I appreciate your time and attention, and we’ll hope you got a lot of value from this. If you have any questions or want to talk further, feel free to reach out. You can reach folks at ArcherGrey in two ways. One info@archergrey.com, or you can reach me at patrick.sullivan@archergrey.com. So thank you again for joining us. And, Anton, thank you for your time.
[00:52:31.110] – Anton Wilson
Thank you. Thank you.