Joachim Hensch, the former Managing Director of Hugo Boss Izmir Factory and Founder of Joachim Hensch Consulting in discussion with Prabir Jana, a seasoned consultant with over two decades of association with Apparel Resources and Professor at NIFT Delhi, delved into the essential requisites and criteria for the transformation of an apparel factory into a smart manufacturing factory. The engaging fireside chat was recently orchestrated by Apparel Resources, a leading publisher of industry-oriented magazines including Apparel Online India, Apparel Online Bangladesh and FashTech Journal. Joachim Hensch – who was invited to India by Apparel Resources – and Prabir Jana are technology stalwarts, recognised as thought leaders in the global forum for providing the much-needed push towards adoption of smart factories.
Prabir: When we talk about transforming a factory, there are many tech tools like AI/ML, AR/VR, Cobots and 3D printing, to name a few that come to one’s mind. What strategy should one follow while starting the journey towards smart factory?
Joachim: The first question for me is not related to tech but it is regarding why transformation is needed to be done in an organisation. Firstly, this is done to optimise what we have whether it be cost, lead time or flexibility. So one aspect is that we want to become a better version of ourselves.
Secondly, as a leader of the company, I should ensure that the organisation exists for the next 3-5 years. I have to look around the corner and think about what’s going to happen and when market conditions can change or they are going to change and how can they be foreseeable (like what we see now with the advent of SHEIN, Temu and others). The other questions that arise are if I am on the right direction or there is a need to optimise. If I am at existential risk due to changing market demands, then I have to change. So these are the two strategies I would start with.
Prabir: How do you think the structure of smart factories will change in the coming years? Will there be large factories or high-tech factories because it’s not necessary that large factories will be high tech and small ones won’t be high tech? Because we know SHEIN is definitely not smart in the sense of tech used other than AI.
Joachim: In terms of the size of the factory, some say we are going from mass market to massive niche. As lots of users become creators, there is huge demand for complexity, so when it comes to manufacturing, it is not the size of the factory that matters but rather the capabilities inside the factory such as the existence of the so-called ‘micro-factories’ which create small orders for these high-demanding marketplaces.
As an example, traditional factories maintain a typical sewing set-up of between 18-22/25 people and we have engineering that creates line balancing for 22 people, no matter if the product can be done in 5 minutes/7 minutes/10 minutes. What I believe is that the product should determine the size of the line/set-up and factory. If you have a 3 minute product which includes 8-10 operations, you are not going to feed this into a 20 people line. You are going to create a line of 5-7 people who will do the work with high efficiency because there is no need for 20 people in this case.
| In terms of the size of the factory, some say we are going from mass market to massive niche. As lots of users become creators, there is huge demand for complexity, so when it comes to manufacturing, it is not the size of the factory that matters but rather the capabilities inside the factory such as the existence of the so-called ‘microfactories’ which create small orders for these high-demanding marketplaces. |
I’m not talking about the physical size and dimensions of the factory, but the intellectual concept of a factory that is the right size for the right product. It’s a different ballgame here when talking about smart line balancing and the layout of the skills and machine parts.
Prabir: Coming back to your experience in Europe and working on projects in Asia and Africa, what role do cultural differences play?
Joachim: When I work with a new client, I always do a lot of interviews, especially with blue collar workers. Because 90 per cent of our organisations include blue collar workers.
Like for a client in Morocco, I asked them whether they use smartphones, Facebook or Whatsapp. I also asked them if they use online banking or Amazon and they did.
For a client in Albania, which is still in Europe, I asked if they use these things and they stated that they use Whatsapp and Facebook but they do not use online banking and they use Amazon only for purchases using COD, since in their history, they have never trusted their government and only trust the physical money they have. So if you have this kind of cultural distrust, then it becomes so much harder to make these people believe in MES systems or have faith in digital systems. When you tell the managers in these countries to look into the data, it becomes tough since people have no trust in that.
In Sri Lanka, they have this trust. When we started using dashboards, implementing MES systems changing the organisational set-up and starting to implement digital trust with numbers, they trusted this and their efficiency went up by 20 per cent which is a really big deal since this cannot be done via analogue, so you have to move from analogue to digital and increase your output.
So, culture is a very important thing for your transformation. But, for me it has nothing to do with the region and it is rather about a country and its culture.
Prabir: I keep going back to the Hugo Boss factory because we all compare what kind of smartness is possible in an apparel factory. The World Economic Forum has a consortium which benchmarks smart factories called Global Lighthouse Network and the Hugo Boss Izmir (Turkey) factory was probably the only garment factory ever considered in that network. Do you think that in future, other garment factories will qualify to be in that level? What is your experience to be in that league and how do you see the future?
Joachim: The closest in this endeavour is China. Because a lot of developing countries are in a low efficiency trap, I got into a conversation with an owner in Bangladesh and they want to open a new factory which is an investment of a few million dollars. I asked them about their current efficiency in factories which they said to be 55 per cent on an average. So they want to invest in another factory which will again deliver 55 per cent which is not the way to achieving a goal.
Coming back to China, with wages in some areas up to US $ 800, either you stop working in a global competitive market or you increase your efficiency so much so that you stay in the game.
| A smart factory is essentially many different technologies integrated together. But different technologies may be in different stages of the Hype Cycle. So each technology you plan to use, you must know at what stage of development they are at, so you are better prepared to cross the Trough of Disillusionment or you are at Slope of Enlightenment. |
That is something our industry must understand. If organisations and owners understand the potential they have in their current situation, then these people will become candidates for the Lighthouse Network. Then certainly there is enough tech in the market to do this.
Prabir: The Gartner Hype Cycle for Technology Adoption talks about how a tech adoption cycle does with passing of time. So, Joachim, can you tell us via your experience how similar phenomenon happens in an organisation which tries to adopt tech and how to minimise Trough
of Disillusionment?
Joachim: I can tell you that there is no way you can avoid this. Whoever wants to go this way, no matter what you do and how good you prepare will be in the Trough of Disillusionment for sure. Because the ambitions of the management are higher than what any organisation can follow which I have seen in every transformation journey.
When I started Smart Factory endeavour in 2015 at Hugo Boss, I was thinking very linearly. I had a clear project management map. And I learnt that this was never going to work. Because of tech not being available, processes were taking longer. But I am also a fan of SCRUM which is a very short cycle management style coming from IT. We implemented SCRUM which means that every two weeks, we would set steps and project plans for only two weeks. And every two weeks, we checked what we did and what we were going to do for the next two weeks and what worked and what didn’t.
When something didn’t work, we would stop it immediately and do something else, to avoid the Trough of Disillusionment. That could make this curve smaller, not make a 6 month plan but, say a two-week plan. You have a long term vision of course but you chop it into small bits and pieces so you can work on this.
| The World Economic Forum has a consortium which benchmarks smart factories called Global Lighthouse Network and the Hugo Boss Izmir (Turkey) factory was probably the only garment factory ever considered in that network. |
For my client in Morocco, we had a pleasant two-day workshop and they had 50-80 initiatives in all areas that they wanted to implement after the first two weeks and I said that you will quickly find that this is not something that can be easily managed. So every two months, I will visit you and then we will set up a new project. And after my third visit, the management ‘started to surrender’. They were in the Trough of Disillusionment because they realised that implementing every two months is a burden that cannot be maintained since the other projects are still running, so after four visits, they ran four projects and on the fifth, they were running five projects without the other ones being finished. That is something that you must prepare an organisation for and that is why it is very important to have a clear picture of where you want to go and have a clear picture of
your ROI.
Talking about the Gartner graph, I would place the smart factory concept somewhere halfway down from the Peak of Inflated Expectations. Because people have been talking about smart factories and industry 4.0 for ages. People started realising that this actually works and that it’s not a small investment in a few gadgets but a lot of work. And the money starts flowing in when you reach the Plateau of Productivity. I would recommend that each one does a proper assessment for their own organisation to understand where they are on the graph.
Prabir: A smart factory is essentially many different technologies integrated together. But different technologies may be in different stages of the Hype Cycle. So each technology you plan to use, you must know at what stage of development they are at, so you are better prepared to cross the Trough of Disillusionment or you are at Slope of Enlightenment.
