New Model Of "Internet Industry" Transforming Red Collar For China'S Traditional Manufacturing Industry

In recent years, Clothing industry The red collar group has become a hot topic in the midst of the wailing. Tens of thousands of Chinese and foreign enterprises have flocked to visit and study from all directions. Alibaba, Haier, Vanke, Lenovo, TCL and other famous enterprises are its visitors, and Haier Zhang Ruimin has seven workshops, requiring all Haier management to study in red collar.

Why is a clothing enterprise so attractive?

　 Let private customization realize industrial production

In the traditional garment industry, it is considered that two different products cannot be made on one assembly line: personalized customization and industrial scale production are two incompatible contradictions. To customize, there is no mass production, and to mass production, there is no customization.

But in the red collar factory, the products produced by one production line are different, and the efficiency is several times that of the traditional garment making method. How does it do it?

When you enter the red collar workshop, you will feel its obvious difference from the traditional workshop. It is more like an IT company. Each employee faces an electronic display screen and carries out his work according to the instructions above.

The color, style and fabric of each product on the assembly line are different, and they all have their own "ID card". As long as workers scan the identification terminal in front of them, the information and production requirements of this dress are clear at a glance.

The intelligent customization system developed by Red Collar alone controls all this. From the initial measurement, to ordering, pattern making, tailoring, and finally to the final garment, a set of garments is divided into more than 300 standard processes. How to match the most reasonable and how to cut the most economical materials are all calculated and implemented by the system.

Red collar has built several databases in this system, such as pattern database, style database, process database, material database, etc., which is said to store millions of big data covering Chinese and foreign clothing. The traditional batch production of clothing generally has only three sizes, large, medium and small, and the maximum number is 10. However, in the red collar database, there are more than 9000 models of a suit, ranging from 1.3 meters to 2.5 meters, tall and short, fat and thin, and data on various figures are available.

This not only reduces the unsatisfied rate of customer needs to 1/10000, but also greatly improves the efficiency of garment making. For example, in the pattern making process, in the traditional way, a senior pattern maker needs to complete a suit at least all day, but with the help of the red collar intelligent system, it can be completed in 20 seconds. Relying on this system, 210 employees in the red collar workshop can complete 2000 sets of personalized clothes a day, which is unimaginable in traditional workshops. Red collar workers can create such a "magic" factory, thanks to the persistence and forbearance of agent Zhang, who has been at the helm for 12 years.

　　 "Neurosis"

Zhang's clothing business started in the early days of reform and opening up. At first, he was just a self-employed clothes seller. After years of trouble, he accumulated a lot of capital, which made it easy to establish Laixi Jiali Garment Factory in 1986 and produce jackets by copying Hong Kong and Taiwan ready to wear clothes. Because of good quality and reputation, the clothing factory represented by Zhang will soon become larger. Nine years later, like most garment manufacturers, he embarked on the road of OEM and established a red collar group.

In the first few years, life was easy, but gradually, Agent Zhang became frustrated at both ends. On the one hand, the cost of raw materials and labor is getting higher and higher, and the small profits are being squeezed out. The dealer at the other end keeps returning unsold goods, with more and more inventory and tighter cash flow. In the end, it is useless to be busy. Zhang's situation is not an individual case, but a true portrayal of the whole clothing OEM industry in China.

Clothing industry operation mainly includes three links: R&D design, processing and production, and brand channel operation. The profit distribution on this value chain is about 35% for R&D and design, 55% for brand channel operation, and 10% for processing and production. This is the smile curve of most manufacturing industries, that is, production and manufacturing links are at the lowest end of the price chain and get the least return.

For example, the world luxury brand ARMANI (Armani), whose cost of fabric accessories for a suit is only a few hundred yuan, and the processing fee for each piece of its OEM factory in China is only about 80 yuan, but after ARMANI received the ready to wear clothing, the price is up to more than 10000 yuan, and the brand took away most of the profits.

Due to the low level of clothing design in China, it is difficult for products to become famous, so a large number of clothing enterprises can only work for other brands. The boss of a processing enterprise once revealed that even the listed company Hongdou Group used to contract ARMANI, and many of LV's products came from the same workshop with Vancl.

What makes Chinese clothing enterprises even worse is that, due to the relative lag from design to supply chain integration, the lead time in the industry is generally very long (the process of product design, production, logistics and sales), and general clothing brands usually need 6-9 months of lead time and stock up period.

Because the lead cycle is long and it is difficult to keep up with the rapidly changing market, most enterprises need to make decisions and gamble on explosive funds. In order to cope with possible demand, they need to place large orders in advance. Once these products are overstocked, they will become a huge burden. According to an insider, the general production and marketing rate of domestic brands is about 65%, and some brands in "difficult times" are even as low as 35%. The saying in the industry is that even if all Chinese garment enterprises stop production, Chinese people do not have to worry about not having clothes, because all the inventories of enterprises add up to two years of sales on the market.

Such a situation has existed for a long time. Agent Zhang saw it in his eyes and was anxious. "To be an enterprise, you must make profits. How can you continue to develop without making money?" He began to seriously ponder the way of "sustainable development".

Combined with domestic Clothing industry In the current situation, agent Zhang traced back to the source and thought of the problem of demand and supply: "The profits of enterprises come from the value created for consumers. To create value, we must meet the personalized needs of consumers. The best way to achieve this is to customize. Moreover, sell before doing, and even the inventory is gone."

For the customized market, agent Zhang also has his own considerations. In the United States, the market share of customized clothing accounts for 30%. China is the largest clothing consumer in the world, but personalized customization started late. With the upgrading of consumption concept and consumption level, personalized demand will become increasingly prominent, and the "short and smooth" and "small and beautiful" clothing industry will become a new development trend. Based on this regressive cognition, in 2003, Agent Zhang took the red collar on the road of transformation and transformation of large-scale garment customization.

In this step, Agent Zhang went not only hard, but also a bit alarmed. The staff force of 7000 people has been reduced to 3000 people. Continuous capital investment and continuous transformation of production lines have no experience to follow, which is equivalent to taking a factory with 3000 people to do long-term experiments.

Compared with the financial pressure of several hundred million yuan, what makes agent Zhang suffer more is the mental pressure. Everyone except him said that his idea could not be realized. No matter in the factory or at home, he always heard opposition, and even many people said that he was "insane".

But agent Zhang recognized one thing: "Only things that are difficult to do can have business opportunities. It is easy to process with supplied materials and draw according to the gourd, but everyone can do it, and there will be no profit. Only by doing what others cannot do, and making a good business model, can he stand out." Driven by this idea, he overcame the difficulty together.

For customized production, the first key is to measure the size, and the accuracy of its data directly determines the wearing effect of ready-made clothes. Agent Zhang paid special attention to this and hired a body measurement technician with more than 40 years of experience at an annual salary of 5 million yuan, hoping that he could help red collars develop a set of body measurement standards for intelligent transformation.

However, a few months later, the teacher Fu could do nothing. In desperation, Agent Zhang had to think for himself.

The effort pays off. After a period of time, he came up with the "three points and one line" coordinate measurement method, which can collect 22 human body data in a few minutes, saving time, accuracy, and easy to operate. Later, with the efforts of the R&D personnel, this volume measurement method was transformed into a 3D intelligent volume meter. As long as standing on the volume meter, the system could automatically collect the required data in more than ten seconds.

In the customized production line, different customers have different requirements. How to timely and accurately deliver these requirements to each process is particularly important. At first, they wrote the production requirements on a piece of paper, but the paper was easily damaged. Later, it was replaced with long cloth strips. If there is much information, the long cloth strip will not work. So, someone thought of the electronic magnetic card. When this kind of magnetic card was finally presented to Agent Zhang after several improvements, he knew that his dream of customization had been half realized.

During the construction of the new production mode, Agent Zhang also continued to "modify" the equipment. The conveying equipment imported from Germany is suitable for mass production, with 6 hooks (clothes) on each hook. In order to meet the needs of customization, he insisted that the workers change it into four hooks and then into two hooks. Every time we change, we don't understand, even complain.

However, the data after the new production line was put into operation finally solved the problem of agent Zhang's "neuropathy". In 2014 and 2015, the whole domestic clothing industry was in high inventory and negative profit, and withered. Red collars, however, have made great strides and led the way. Sales revenue and net profit increased by more than 130% year on year, the profit margin exceeded 25%, and the inventory was zero.

The "red collar phenomenon" immediately attracted attention both inside and outside the industry, with various reputations such as "industrial upgrading model", "supply side reform benchmark", and "Internet processing industry". More curious people came to explore and unexpectedly, two periods of students from Lakeside University visited Haier, Lenovo, Vanke, TCL, Sany Heavy Industry, and almost the leading enterprises in all industries "followed the fashion" and swarmed into the red collar factory.

After his visit, Guo Guangchang of Renaissance Group made strategic investment cheerfully, claiming that "Fosun cannot miss the eve of the arrival of the Internet industry."

A clothing business boss from Thailand said after visiting: "My business is much smaller than here, and I made a similar attempt. But after seeing this factory, I found that I can do too much." Up to now, domestic and foreign enterprises that make an appointment to visit still have a long queue.

　　 What has changed

Once, the clothing industry was an important symbol of "Made in China", creating a large number of employment opportunities and foreign exchange income for China. However, after an unprecedented take-off, the industry is now declining.

The low profits caused by being at the low end of the global industrial chain for a long time, the rising human costs, the massive ineffective production capacity caused by the homogenization of products and the slow launch of new products, and against the backdrop of the increasingly saturated market and the lower cost advantage of the garment processing industry in Southeast Asia over China, a series of internal advantages and external problems are forcing the transformation of the traditional garment industry.

The rise of e-commerce makes this industry even more difficult. Since 2014, a wave of store closures has made people shudder. There are 140 Anta stores, 270 Xinur stores, 519 Septwolves stores, and more than 5000 Bosden stores. With life and death at stake, many enterprises have found their own way and embarked on the road of creating their own brands or e-commerce, but with little success.

Where is the way out for the traditional clothing industry? Experts and experts are thinking hard. Many people believe that "fast" with intelligence as the core is the direction of efforts. But the problem is that if it does not meet the needs of consumers, this intellectualization will be counterproductive and further increase the inventory pressure. Therefore, "meeting consumer needs" has become the key crux. At this time, the smart customization model of red collar seems to be a good remedy for the disease, which will shed a ray of sunshine for the clothing industry under the haze.

Customization, production based on demand, is the so-called C2M mode. C is a consumer and M is a manufacturing enterprise, which uses consumer demand to drive enterprise production. This not only meets the needs of consumers to the greatest extent, but also eliminates the pain of inventory that plagues the clothing industry.

In this mode, the "smile curve" also fails. In the output of a garment, the production enterprise does not need to continuously invest in R&D and design, and the profit space is completely enlarged. The profit rate of traditional production enterprises is not more than 10%. The performance of Red Collar in the past two years shows that although its production cost is 10% higher than that of the traditional model, the profit rate is more than twice that of the traditional model. At the same time, the intelligent system of red collar has accelerated the production cycle of new products by 8 times, from 3 months to 10 days.

"Fast" is very important in the clothing industry. The famous Spanish clothing retail brand ZARA can create a staggering market value of 100 billion euros, relying on speed. They can control the production process every second. Every new dress can be completed in two weeks from the designer's creativity to the ready to wear clothes on the store shelves. It only takes 36 to 48 hours for new goods to be delivered to China.

With all links closely linked, ZARA can have new products on the shelves twice a week. In addition, its timely capture of fashion elements, taking a personalized route, with more models and less quantity, aroused the compulsive purchase psychology of consumers that "they may not be able to buy in the next second". In the red collar mode, consumers are also changing. In the magic factory APP of red collar, consumers can independently choose styles, fabrics, colors and design various details with the help of intelligent systems. This deep autonomy has turned ordinary consumers into designers, breaking through the traditional consumption experience.

The change of business model will inevitably bring about changes in organizational management.

In the traditional management mode, the company takes profits as the core, asks for benefits from the department head, and the employees turn around the head. In the new point-to-point mode of user to factory, user requirements become the core.

Red collars began to go to departments and administrative levels in a bold manner, breaking up more than 30 large and small departments. Employees came out and became nodes in the process, making every employee focus on user needs. And 80% of the middle level leaders play the role of "firemen", responsible for solving problems at any time, and standardizing the process. This reform has reduced the management cost of red collars by 20%.

As a result, red collars have become user centered in terms of both business model and internal management, realizing the return to the essence of business. This was summarized as the "source point theory" by Agent Zhang, that is, to drive and integrate the industrial chain with the source point customer demand to form a sustainable virtuous circle.

In this regard, Agent Zhang proudly said: "Harvard Business School came to us, and after reading it, they said, 'The whole Harvard wanted to do this case, but they didn't find it, and your organizational system is exactly what we want to find.

　　 Challenge Taobao and Jingdong

As products are completed through the Internet and sold mostly through the Internet, red collars are also considered to challenge Taobao and JD platforms and grab food from the tiger's mouth. In fact, Agent Zhang did not want to challenge the two mountains, but was forced to do nothing.

After the intelligent system test is mature, Red Collar wants to settle in Taobao, JD and other platforms, but the basic code of the two platforms does not support the customized model of Red Collar, nor will it open a "small kitchen" for a single enterprise of Red Collar.

After the door was closed, red collar workers decided to build their own platform. With this in mind, Agent Zhang has also brewed a bigger blueprint to build an intelligent ecosystem.

Agent Zhang hopes to use his own experience and achievements of 12 years to help traditional enterprises upgrade and transform, export a number of intelligent customized enterprises like red collars, and gather the transformed enterprises on the e-commerce platform of red collars to achieve common "C2M". At that time, the red collar platform will become the entrance of customized services for multiple industries. As long as consumers find the red collar platform, they can enjoy customized services in different fields.

Ideally, if this C2M platform is completed, it will surpass the B2C and C2B models of Taobao and JD. Because the latter is still on the third line. Among all business models, red collar is the most direct two line model, with the least intermediate links, and consumers and production enterprises at both ends benefit the most.

"All the merchants on our C2M platform can make money. Those with small ability can earn less, while those with large ability can earn more." Agent Zhang stressed confidently.

In response to this idea, red collars have taken steps.

Not long ago, Red Collar, Haisibao, a denim clothing enterprise in Zibo, Shandong, completed the intelligent upgrade. Previously, Heisenberg mainly produced relatively low-end jeans, with a factory unit price of only about 70 yuan. The production cycle was long and the inventory pressure was high.

With the help of red collars, Heidelberg quickly established a global cowboy customization supply chain platform based on the Internet, which not only adapted to the personalized needs of the market, but also increased the unit price of products to more than 300 yuan. It also got rid of the passive mode of "doing resale" in the past, realized zero inventory, and significantly increased profits.

At present, more than 60 traditional manufacturing enterprises at home and abroad, including German enterprises, have established cooperative relationships with Red Collar, covering many industries such as chemical industry, bicycle, furniture, textiles, decoration design, shoes and hats, electronic products, etc. Red Collar has exported a complete set of intelligent solutions to them.

From the perspective of intelligent transformation, red collars are prying a bigger cake. In recent years, the transformation and upgrading of the traditional manufacturing industry has become more and more serious. The key point is the intelligent transformation of the factory. If red collars can design standardized solutions for a large number of domestic and even foreign factories, their gains will be unlimited. Only the massive data of each factory will help red collar master the future industrial cloud platform, thus occupying the commanding height of Industry 4.0.

But this does not mean that red collars can rest easy on the way forward. Under the background of rapid iterative upgrading of informatization and intelligence, Red collar Will there be competitors? Although the market space for personalized customization in China is huge, how and how long will it take to move this gold mine? How to further improve the user experience? Can the existing smart factories be upgraded again.

These are all problems that agent Zhang needs to think about.

For more information, please pay attention to the information report of World Clothing, Shoes and Hats Network.