The global COVID-19 pandemic proves to be a challenging time for the fashion industry in many ways. We want to bring forth the voices of the manufacturing sector into the mainstream conversation, and in the Perspectives series, we speak to our partner factories on how they are coping with current circumstances, the need for digitalization, sustainability and more.
About this partner
At SupplyCompass, we are proud of our network of manufacturers and suppliers around the world; we handpick only the very best to join our community. Linen is a popular material amongst many of the brands we work with, and considered to be among the most sustainable, so we have spent years searching for the right partner who could source and produce high-quality linen products, with a trusted and traceable supply chain. In 2019, the SupplyCompass team met Aditya, the Head of Business Development for a leading, vertically-integrated Linen Manufacturer in India and we knew they were the partner we had been looking for. They are manufacturers and exporters of natural fabrics, and home furnishings.
With a vertically-integrated setup that operates across every process of apparel and home furnishing manufacturing, this partner is spread over five production units across Western and South India and is certified by GOTS and the European Flax Standard, amongst others. We spoke to him on how their business has evolved, how they have faced the unprecedented challenge of a global pandemic, what changes he expects to see in the industry once the pandemic is over, and the technology that is exciting him at the moment.
When did you start your business? How has the industry and your business changed since you started?
We started in 1970 — My grandfather started the business. This marks our 50th year. We started with silk yarn trading. Initially, my grandfather used to work with a spinning unit and he realised there was a lot of silk waste being generated from spinning waste, so he started to buy that waste and have it re-spun into silk yarn. Since then, we’ve moved on from trading to manufacturing and from yarn to fabric and garments as well. We’ve come a long way in 50 years.
People refer to a couple of decades back as the golden era for the textile industry as there were a lot of export benefits and there was a big arbitrage if you were exporting. That arbitrage has significantly reduced with globalization and ease of access. People say it may not be the golden era anymore, but now we have many more challenges which opens doors to a lot of new opportunities as the industry continues to evolve.
Your business offers small production runs that are very convenient for many brands who want to be more reactive and agile to the market. Are low MOQS something you have always offered your customers or has this changed over time?
It’s come up more in the last 5-6 years. We started offering lower MOQs when we saw how e-commerce has allowed a lot of smaller brands to sprout up and globalization has allowed them to source and sell across the world. A lot of smaller inquiries started to come our way as we exhibited at expos — that was definitely something we saw as an opportunity. Owing to our domestic made-to-stock service of fabrics, it was relatively easy for us to offer smaller runs because we were stocking it for multiple customers anyways and so it reduced our MOQs significantly on the fabric front.
Would you say this was a competitive advantage, compared to other factories?
Seeing the response that we have been getting at different exhibitions compared to those that only do large runs, it has opened a lot of doors for us despite the new level of complexity. We haven’t cashed in on it as much as we should.
Your business is certified by GOTS and the European Flax Standard which is fantastic. When did you notice a rise in the demand for sustainable production or has this always been a core part of your values?
Yes, and no. To be completely honest, this was largely demand-driven. We definitely felt that getting these certifications will help us command a higher margin and/or competitive advantage. We are currently certified by GOTS, European Flax, BSCI and Sedex. We are also recognized by Lenzing and Birla Excel and are certified for production for Inditex and PVH. That being said, I would like to believe it was also part of our core values considering that we started our business, as mentioned before, from reusing silk waste. So in some ways, we started our company out of a need for sustainability. We have always been obsessed with natural fibers and fabrics. A majority of our business is natural and sustainable fibers, and it always has been.
My grandfather has always believed in creating that value while allowing others to create value for you and alongside you, and so it has always been part of our core values. Allowing for these long-term relationships is how the manufacturing industry thrives.
Our biggest customer has been with us for over 20 years and we have employees who have been with us for over 30 years. Even our banker has been our banker for 47 years. We believe in long-term relationships and we don't chase after one-off transactions. Long-term partnerships like these aren't talked about enough in the typical sustainability realm but will be key in surviving through these tough times.
How are you adapting your business in this uncertain time? Are there any areas you wish you were more prepared for?
An event like this is unprecedented and there’s very little we could have done to be prepared for it. In terms of adapting, both our supply and demand have been blocked. Factories are shut, and so are our customers, and there is very little work that can be done by us remotely. In terms of how I wish we could have adapted, it would be more digitization. I had mentioned to your teammates earlier, that we were implementing a new ERP system and we had to put that on hold because there were some technical issues. But if that were in place now and if we, overall, had a bigger drive towards digitization, there would be some backend internal work that we could be doing now, that we aren’t at the moment. So, I wish we were more tech-savvy as a company.
How are you helping and supporting your factory workers? What support is the government offering at the moment?
This is very new to us and very little that can be done. We have provided salaries in full for this month, despite having zero production and zero sales for 15 days. We have over 700 people on our rolls and every single one of them has been paid. That being said, we have already told our staff and workers that we don’t know how long we can sustain paying. This is really unprecedented — unless we come out of a lockdown or we have actual movement in sales, there’s no way for us to sustain paying.
In terms of the government, this is something very new for them as well and it’s basically a war-like situation. The Indian Government is doing a good job of curtailing the situation and is working on different relief packages. As of now, there is very little the government has done besides giving moratorium on loans but there are new decisions being taken every day. To their credit, lesser developed countries can only afford so much — offering zero-interest or payroll loans is highly unlikely
Something to our advantage is that typically March to June is a lean time. The way we have been working is that typically the migrant workers at our factories go on leave from early March, Holi time, to June. Fortunately for us, they have all left and are safe in their village. Their source of income, which is typically agriculture during these months, continues.
This is very new to us and very little that can be done. We have provided salaries in full for this month, despite having zero production and zero sales for 15 days. We have over 700 people on our rolls and every single one of them has been paid. In terms of the government, this is something very new for them as well and it’s basically a war-like situation. The Indian Government is doing a good job of curtailing the situation and is working on different relief packages.
What are some of the ways you’ve seen this impact the wider supply chain? What changes do you think you will be seeing in the apparel industry once this pandemic is over?
A lot is yet to be seen. It all depends on the runtime and how long we are on lockdown and how many people are actually impacted. This will really test the resilience of a lot of companies. Companies that have a lot of liquidity and are well-diversified will come out of it potentially stronger because their competition will fade out. We have been fortunate that our business is relatively diversified geographically. We will have different markets that will ideally reopen at different times, as opposed to someone who’s only working in one market/country.
People who are more diversified and whose business models are more resilient and have stronger liquidity will survive. There will be more openings for supply chain managers because people will realize the need to get deeper into their supply chain. There will be a stronger focus on traceability and supply chain companies will benefit strongly.
What are some of the ways brands and businesses can support factories during this time?
It’s very tough to say. I think it’s fair to demand that you do not cancel orders that have already been placed. However, everyone has their own problems. Brands have their own issues and businesses have their own challenges to solve, with retail space going empty, large sums of payroll and loans to pay. I think it’s unfair to expect them to continue to place orders in such a destructive time, but there has to be some level of partnership. Ideally, brands should think of the workers in factories as your own employees, and come up with some sort of innovative relief package that they can also afford. Now, more than ever, is the time brands can show how compassionate and truly committed to sustainability they are.
Brands need to understand that there needs to be a long term relationship and they will have to continue that relationship even when the pandemic gets over, and step up and support factory employees, even though they are not directly employed by them.
What tools and technology do you use at the moment to manage the sampling and production processes? Have you come across any technology that has wowed you?
We do have a deeply integrated ERP system running. Over time, we have started to accumulate a lot of data, but in silos. We have four different systems currently running and over time, we’ve added more tech so there’s a lot of data being collected in silos. Integrating this into a single system is very important for us and COVID-19 has further highlighted this importance.
In terms of technology that has wowed me, there is TrusTrace; I spoke to their team at Sankalp. I see a lot of potential for blockchain in terms of mapping out the whole supply chain and that’s some technology that I’m looking out for. I want to see how we can use data better in terms of capacity planning and forecasting.
Also exciting is being able to digitize the sampling process with companies like Material Exchange and CLO3D. I'm very excited about how 3D draping tools will progress and how people will adapt to them. But as a factory, there is very little I can do unless brands adopt them. I'm hoping COVID- 19 will push brands to adopt technology better in sampling because it is a big hassle and a big cost for us and for the environment.
We’ve already been speaking to some of the smaller brands about considering this. Especially for smaller runs, say you are making hundred pieces, it doesn’t make sense to sample 15-20 pieces before. It’s too costly and it’s not friendly for the environment or the brand either.
Although we’ve not been working together for a very long time, we’d like to know what you enjoy the most about working with Supplycompass? What business benefits do you hope to achieve through this partnership?
SupplyCompass has a very interesting business model. We see how exhibitions are dying out as very few people are coming to them. It’s obviously a huge travel cost and generally as an industry, fashion travels a lot. We have a running joke that we are exporters second, porters first. We are constantly travelling, showing samples in different exhibitions to different customers. So companies like SupplyCompass have come in at a very good time because this will definitely be the future. First, it will reduce travel and the cost of lead generation. Second, your platform will enable a more data-centric approach to identifying and collaborating with factories that are able to deliver consistent results. I’m very excited to see that.
Perspectives is a SupplyCompass series that focuses on our supply chain partners operating at the intersection between innovation, efficiency and sustainability, to help shape more inclusive conversations in the fashion industry.