Let private customization realize industrial production How Red Collar Group realizes transformational transformation

In recent years, the clothing industry has been screaming, and the red-collar group in which it has become a hot and fragrant scent, tens of thousands of Chinese and foreign companies are rushing to visit and study from all directions. Ali, Haier, Vanke, Lenovo, TCL and other famous enterprises are its visitors. Haier Zhang Ruimin is a seven-in-one workshop, requiring all management of Haier to go to the red collar to study.

Why is a clothing company so attractive?

Let private customization achieve industrial production

In the traditional garment industry, one assembly line is considered to be unable to make two different products: personalized customization and industrial scale production are contradictory bodies that cannot be combined with each other. If you want to customize, you will not be able to produce energy. custom made.

However, in the factory of the red collar, the products made by one production line are different, and the efficiency is several times that of the traditional clothing method. How did it do it?

Entering the red collar production workshop, you will feel the obvious difference between it and the traditional workshop. It's more like an IT company. Every employee is facing an electronic display and follow the instructions above to carry out his work.

The color, style and fabric of each product on the assembly line are different. They all have their own “ID card”. The workers only need to gently wipe the identification terminal in front of them. The information and production requirements of this clothing are all clear at a glance. .

Control of all this, red collar own research and development of intelligent customization system. From the initial volume, to single, pattern, tailoring, and finally to the final garment, a set of garments is subdivided into more than 300 standard procedures, how to match the most reasonable, how to cut the most material, all calculated by the system And execute.

In this system, Red Collar has built a number of databases, such as a type library, a style library, a craft library, and a material library. It is said to store billions of large data covering Chinese and foreign clothing. Traditional mass-produced garments generally have only three large, medium and small garments, and no more than ten. But in the red collar database, there are more than 9,000 models of clothes, ranging from 1 meter to 2 meters, tall and thin, and all kinds of body data.

This not only reduces the unsatisfactory rate of customer demand to one in ten thousand, but also greatly improves the efficiency of garment making. For example, the pattern-making process in the garment process. In the traditional way, a senior pattern-maker is required to complete a suit at least one 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 clothing a day, which is unimaginable in the traditional workshop. The red collar can create such a "magic" factory, relying on the insistence and forbearance of the 12-year-old agent at the helm.

"neuropathy"

Zhang’s clothing business started in the early days of reform and opening up. At first, he was only a self-employed individual who sold clothing. After a few years of accumulation, he accumulated a lot of capital. It was easy to establish Laixi Jiali Garment Factory in 1986 and produce jackets by replicating Hong Kong and Taiwan. Because of good quality, prestige, Zhang agent garment factory soon become bigger. After 9 years, like most clothing manufacturers, he embarked on the road of OEM and established the Red Collar Group.

In the first few years, it was still quite good, but slowly, Zhang’s agent became two-headed. At one end, the cost of raw materials and labor is getting higher and higher, and the tiny profits are being squeezed out. The other dealers kept returning the goods that could not be sold, the stocks were getting more and more, and the cash flow was getting tighter. In the end, it is equal to busy work. The situation of Zhang’s agent is not a case, but a true portrayal of the entire OEM OEM industry.

There are three main links in the operation of the garment industry: R&D design, processing and production, and brand channel operation. The profit distribution in this value chain is about: R&D design accounts for 35%, brand channel operations account for 55%, and processing production accounts for 10%. This is the smile curve of most manufacturing industries, that is, the manufacturing process is at the lowest end of the price chain, and the return is the least.

For example, the world luxury brand ARMANI (Armani), the cost of a fabric accessory for a suit is only a few hundred yuan, and the processing cost of the Chinese factory for its foundry is only about 80 yuan, but ARMANI gets the price after the garment. However, it is more than 10,000 yuan, and the brand has taken away most of the profits.

Due to the low level of domestic clothing design, the products are difficult to become famous, so a large number of clothing companies can only work for other brands. The owner of a processing company revealed that even the listed company Red Bean Group had OEM for ARMANI. Many of LV's products came out of a workshop with Vanke Eslite.

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

Because the lead period is long and it is difficult to keep up with the fast-changing market, most companies need to make a gamble. In order to cope with possible needs, they need to place large orders in advance, and once these products are backlogged, they become a huge burden. According to an industry source, the general production and sales rate of domestic brands is around 65%, and some brands in “difficult times” are as low as 35%. According to the industry, even if all Chinese clothing companies stop production, the Chinese do not have to worry about not wearing clothes, because all the inventory of each company is enough to sell in the market for two years.

This kind of situation has existed for a long time. Zhang agent looks in his eyes and is anxious. "Doing business must have profits. How can it continue to develop without making money?" He began to seriously ponder the "sustainable development".

Combining the status quo of the domestic apparel industry, Zhang’s agent traces the source and thinks about the demand and supply: “The profit of the enterprise comes from the value created for the consumer. To create value, it must meet the individual needs of the consumer. The best way to do the utmost is to customize - and sell it first, even the stock is gone."

For the custom market, Zhang agent also has its own considerations. In the United States, the market share of custom clothing accounts for 30%. China is the world's largest consumer of clothing, but personalized customization started late. With the upgrading of consumption concepts and consumption levels, the demand for individualization will become increasingly prominent, and the “short and fast” and “small and beautiful” of the apparel industry will become a new development trend. Based on this regression-style cognition, in 2003, Zhang agent took the red collar to embark on the road of transformation and transformation of large-scale clothing customization.

In this step, Zhang’s agent is not only difficult, but even a little bit shocking. The 7,000-person workforce has been reduced to 3,000 people, continuous capital investment, and the production line has been continuously transformed. Everything has no experience to follow, which is equivalent to taking a factory of 3,000 people for long-term experiments.

Compared with the continuous pressure of hundreds of millions of funds, it is the mental pressure to make Zhang agents difficult. Apart from himself, everyone said that his ideas could not be realized. Whether he is at the factory or back home, he always hears opposition, and many people even say that he is a "neuropathy."

However, Zhang agent has taken a point: "There are business opportunities for things that are difficult to do. It is easy to process the materials and take pictures of the gourd. But everyone will do it, there will be no profit. Do not do others, make good. The business model will stand out." Driven by this idea, he has overcome the difficulties together.

Customized production, the first pass is the volume, the accuracy of the data directly determines the wearing effect of the garment. Zhang has paid special attention to this. He hired a qualified person with more than 40 years of experience at an annual salary of 5 million yuan. He hoped that he could help the Red Collar develop a set of standards for intelligent transformation.

However, after a few months, the master can do nothing. In desperation, Zhang agent had to think about it.

Hard work pays off, after a while, he came up with the "three points and one line" coordinate volume method, which can collect 22 data of the human body in a few minutes, saving time, accuracy and easy operation. After the efforts of the research and development personnel, this method is transformed into a 3D intelligent measuring instrument. As long as it is standing on the measuring instrument, the system can automatically collect the required data in a dozen seconds.

Different customers have different requirements on the customized production line. It is especially important to pass these requirements to each process in a timely and accurate manner. At first, they wrote the production requirements on a piece of paper, but the paper was easily broken. Later changed to a long cloth. When you encounter a lot of information, the long strips don't work. So, someone thought of an electronic magnetic card. When the magnetic card was improved and finally presented to the agent, he knew that his custom dream had been achieved in half.

During the construction of the new production model, Zhang also continued to “modify” the equipment. Transmission equipment imported from Germany suitable for mass production, the equipment every six hooks to hang (clothes). In order to meet the needs of customization, he insisted that the workers be transformed into four hangings, and then changed into two hanging. Every time you change, everyone doesn't understand, and even complains.

However, the data after the new production line was put into operation finally rectified the "neuropathy" of Zhang. In 2014 and 2015, the domestic apparel industry had high inventory and negative profits, and it was dying. The red-collar is triumphant and leading the way. Sales revenue and net profit have increased by more than 130% year-on-year, profit margins have exceeded 25%, and stocks are zero.

The "red-collar phenomenon" immediately attracted attention from outside the industry, and various reputations such as "industrial upgrading model", "supply-side reform benchmark" and "Internet processing industry" were added. More curious people to find out, two students from Lakeside University visited, Haier, Lenovo, Vanke, TCL, Sany Heavy Industry... The leading companies in almost all industries have entered the red-collar factory “fashionable”.

After the visit of Guo Guangchang of the Fuxing Group, he made a strategic investment and said that “Fosun cannot miss the eve of the arrival of the Internet industry.”

A clothing company owner from Thailand visited and said: "My business is much smaller than here, I did a similar attempt, but after seeing this factory, I found that I can do too much." Now, domestic and foreign companies that are scheduled to visit are still lined up.

What changed?

Once, garment manufacturing industry is an important symbol of China, for the Chinese to create a lot of jobs and foreign exchange earnings. However, after an unprecedented take-off, the industry is now fading.

Long-term low profit caused by the low end of the global industrial chain, rising labor costs, large amount of inefficient production capacity caused by product homogenization and slow new product launch, the market is becoming saturated, and the Southeast Asian garment processing industry has a higher cost advantage than China. In the background, a series of excellent internal and external problems are forcing the transformation of the traditional clothing industry.

The rise of electronic business, leaving the industry difficult. Since 2014, a wave of wave shop closures has chilled, 140 Anta customs stores, 270 Xinur customs stores, 519 doors in seven wolves, and more than 5,000 in Persden. Under the circumstance of life and death, many companies have found their way out and embarked on the road of self-built brands or self-built e-commerce, but the results have been minimal.

Where is the traditional clothing industry? Experts and experts are thinking hard, and many people believe that the "fast" with intelligence as the core is the direction of efforts. But the problem is that if it doesn't meet the needs of consumers, this kind of intelligence will be counterproductive and further increase the inventory pressure. Therefore, “consistent with consumer demand” has become the crux of the problem. At this point, the red-collar intelligent customization model seems to be a symptomatic prescription, and it will give a ray of sunshine to the clothing industry under the shadow.

Customized, production in demand, the so-called C2M mode. C is a consumer, and M is a manufacturing company that uses the needs of consumers to drive enterprise production. This not only satisfies the consumers to the greatest extent, but also does not need middlemen, and relieves the pain of the inventory that plagues the clothing industry.

In this mode, the "smile curve" also failed. In the output of a piece of clothing, the production company does not need to continuously invest in R&D design, and the profit margin is completely amplified. The profit margin of traditional production enterprises does not exceed 10%. The performance of Red Collar in the past two years shows that although its production cost is 10% higher than the traditional model, the profit rate is more than twice that of the traditional model. Meanwhile, the red collar of intelligent systems for new product output cycle accelerated eight-fold, from three months shortened to 10 days.

“Fast” is crucial in the apparel industry. The famous Spanish clothing retail brand ZARA can create an amazing market value of 100 billion euros, which is based on speed. They can control the process in seconds, each new piece of clothing from the designer to the idea, to the ready-to-wear in the store, can be completed in 2 weeks, the new delivery to China only 36 to 48 hours.

With all the links in place, ZARA can have two new shelves in a week. Coupled with its timely capture of fashion elements, take a personalized route, the amount of money is small, stimulating consumers to "buy the next second may not buy" forced purchase psychology. In the red-collar mode, there are consumers who change together. In the Red Collar Magic Factory APP, consumers can choose their own styles, fabrics, colors and design their own details with the help of intelligent systems. This deep autonomy has turned ordinary consumers into designers and broke through the traditional consumer experience.

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

In the traditional management method, the company takes profits as the core, and the department heads need to benefit, and the employees turn around the supervisor. And in the new peer-to-peer mode of users to the factory, user needs become the core.

The red collar began to go to the department and go to the department level, and all the 30 departments and departments were dispersed. The employees came out and became the nodes in the process, so that each employee turned around the user's needs. And 80% of middle-level leaders play the role of “firefighters”, responsible for solving problems that arise at any time and standardizing the process. This reform has reduced the management cost of the red collar by 20%.

As a result, the red collar has turned into a user-centered, user-oriented return to the essence of business, both in business model and in internal management. This was summed up by the agent as "source point theory", which is to drive and integrate the industrial chain with the source point - customer demand, to form a virtuous cycle of sustainability.

In this regard, Zhang agent is not proud to say: "Harvard Business School came to us, they said so after reading, 'The whole Harvard wants to do this case, did not find, and your organizational system is exactly what we are looking for. of.

Challenge Taobao, Jingdong

Since the products are completed through the Internet, and most of them are sold through the Internet, the red collar is also considered to be challenging the Taobao and Jingdong platforms and taking food from the tiger's mouth. In fact, Zhang did not want to challenge the two mountains, but was forced to help.

After the intelligent system test is mature, Red Collar wants to enter Taobao, Jingdong and other platforms, but the grassroots code of the two platforms does not support the red-collar customization model, and it will not open a "small stove" for a red-collar enterprise.

After eating the closed door, the red collar decided to build the platform by himself. When thinking about it, Zhang also brewed a bigger blueprint - building a smart ecosystem.

Zhang agent hopes to use his own experience and achievements for 12 years to help traditional enterprises upgrade and transform, export a number of intelligent customized enterprises like red collars, and integrate the transformed enterprises into the red-collected e-commerce platform to achieve Common "C2M". By then, the red-collar platform will become the entrance of multi-industry customized services. Consumers can enjoy customized services in different fields as long as they find the red-collar platform.

Ideally, if this C2M platform is built, it will surpass the B2C and C2B modes of Taobao and JD. Because the latter are still three points and one line. Among all business models, the red-collar two-point and one-line model is the most direct, with the fewest intermediate links, and consumers and manufacturers at both ends benefit the most.

"On the business of our C2M platform, everyone can make money. The ability is small and earn a little, and the ability to earn more." Zhang agent confidently stressed.

In response to this idea, the red collar has taken steps.

Not long ago, Red Collar was a cowboy clothing company in Haibo, Shandong, and completed the intelligent upgrade. Previously, Heisberg mainly produced relatively low-end jeans, the factory price is only about 70 yuan, the production cycle is long, and the inventory pressure is high.

With the help of the red collar, Heisberg quickly established an Internet-based global denim custom supply chain platform, which not only adapted to the individual needs of the market, but also raised the unit price to more than 300 yuan, and also got rid of the past “doing reselling”. The passive mode achieves zero inventory and profits are greatly improved.

At present, more than 60 traditional manufacturing companies including German companies have established cooperative relations with Red Collar, covering chemical, bicycle, furniture, textiles, decoration design, shoes and hats, electronic products and other industries. A complete set of intelligent solutions was output to it.

From the perspective of intelligent transformation, the red collar is shaking a bigger cake. In recent years, the transformation of traditional manufacturing industries to upgrade situation is increasingly grim, the key point is the transformation of plant intelligence. If the red collar can design standardized solutions for a large number of factories in China and even abroad, then the harvest will be limitless. Only the massive data of each factory will help the Red Collar to grasp the future industrial cloud platform, thus occupying the commanding height of Industry 4.0.

But this does not mean that the red collar can sit back and relax on the way forward. In the context of informational, intelligent and rapid iterative upgrades, will the Red Collars not have competitors? Although China's personalized customization market is huge, how and how long does it take to shake the gold mine? How to further improve the user experience? Can you still upgrade your existing smart factory?

These are all questions that the agent needs to think about.