Western Hemisphere Manufacturers Share Challenges, Opportunities and Solutions
Updated: Apr 13
By Michael Penchansky, V.P. of Global Business Development & Manufacturing Solutions, CGS, Inc.
Panel Discusses Collaboration, Technology, Workforce and Sustainability
"We cannot just go back to doing the things we used to because we were not being efficient. Collaboration is key, and we need to find a win-win situation where we can all benefit from new innovations and technologies. At the end of the day, we complement each other," said Mario Alberto Canahuati, Executive Director of Energy & Real Estate for Honduran textile manufacturer Grupo Elcatex.
His comments echoed throughout the panel discussion that I was honored to moderate at the recent SPESA (Sewn Products Equipment & Suppliers of the Americas) Executive Conference in Puerto Rico. Other panelists included Jimmy Haygood, VP of Engineering & Procurement for U.S.- based Delta Apparel, and Simon Medina, General Manager & V.P. of Operations at apparel manufacturer Capaz International in the Dominican Republic. Regarding the event, Medina noted, "You don't find very commonly spaces where you can have so much knowledge available to everyone."
The panelists also cited local industry groups like the Honduran Apparel Manufacturers Association and The HUGE (Honduras, USA, Guatemala, El Salvador) Business and Investment Council for enabling collaboration across the region.
Collaboration Is Key
All participants shared insights into the positive benefits of collaboration between business partners and competitors. This seismic shift for the region is primarily driven by the burgeoning opportunities that nearshoring of production from Asia is bringing to the region.
According to Medina, "We can't compete with each other. There was a point in time when we were Western Hemisphere companies competing one against the other. And I think that was probably part of the situation with losing power and control of manufacturing to Asia. We kind of put ourselves into a bad spot competing with each other. Now we are saying we don't need to do that. Every company is specialized in different things. The way I see it, we should be looking into synergizing."
Addressing a long-term competitive weakness for the region, Alberto Canahuati added, "We don't see each other as competition any longer; we look at ways to complement each other. We have created an integrated supply chain. Many spinners are coming into our region, and we now have over 2 million pounds of yarn fiber production capacity in Honduras. So, this essentially allows us to have a textile hub or a fully integrated ecosystem comprising yarn, textiles, sewing and distribution. At the end of the day, this vertical integration will allow us to be more competitive."
Technology Is Essential
While the added textile technologies will undoubtedly make a massive impact in the region, the panelists agreed that sewing room technology is not as widely adopted as it could be due to the labor-intensive requirements of apparel and other sewn products production. "While we have invested heavily in many different areas over the last 5-10 years, we have, unfortunately, invested less in the sewing due to the lower labor rates we've had in the past," said Haygood. "I think there is a major need for an end-to-end sewing automation process. Even so, many individual operations have been automated, which has provided labor savings for the industry."
While much of the sewing labor remains manual, other technologies can be deployed to improve the manufacturing process significantly. Medina sees the opportunity to use shop floor technology to engage workers and support faster, better-informed decision-making in the business. "It is interesting to keep real-time communications with operators about their performance and at every level of work like they already do with social networking in their private lives. Since everybody has a phone, it becomes easier to help them to know their goals and stay on track. They become more self-managed."
Other business challenges require technology solutions. For example, power generation is a problem in certain areas. Delta Apparel is combatting this problem by adding, at great expense, power generators and looking at alternatives like solar power. As most employees rely on buses to travel to and from work, some companies sidestep transportation glitches and roadblocks by providing their own transportation to ensure production uptime.
All participants quickly pointed out that we must never forget that people are at the center of everything we do. "The technology is essential, it's fundamental, and when added to passionate people, it just makes the equation work," added Medina.
Workforce Is Vital
The region's relatively young population and skilled workforce are significant competitive advantages. Compared with China and the U.S., opportunities to recruit a workforce for labor-intensive operations like sewing and to scale such a business are far greater here. But labor costs have increased significantly more than inflation in recent years. Haygood says, "Labor costs are rising really fast, which makes it hard to budget for such a large impact on your labor. That's why automation is so important."
Haygood continues, "Recruiting is one of our biggest challenges. We advertise to different sectors and change how we manufacture to make it more susceptible – call it millennial-friendly.
"I would say that the human factor is key here," said Medina. "With all the talk of technology and the technical aspects of the business, I see it most important to empower every individual in the organization to excel and make speed to market reality. That means investing every day in training for the people. It's not just traditional education; it's providing information so people can self-manage. Let's just keep training our people and improving their lives so they are happy to work in a good working environment and are treated fairly."
Sustainability Is Priority
Today, the push for sustainability spans the entire supply chain. As a public U.S. company, Delta Apparel strives to deliver environmental sustainability. "The government and shareholders want to know what you have done lately for us on sustainability" said Haygood.
Elcatex is also looking at ways to produce and manufacture more sustainably on the textile side. New equipment is available that is more efficient and uses less electricity, water and steam. The company has also developed many technological advances internally through its Rethink technology and innovation division. These include reducing the amount of salt used in the dying process by 80% and reducing water by 50%. "We are also working to make direct-to-garment (DTG) printers more accessible to the industry and recycle 100% of the cotton waste from our cutting process." When asked about their sustainability investments, Alberto Canahuati says that "both equipment and energy-related initiatives do pay back."
Medina added, "We have to make heavy investments in sustainability and look at it from a social responsibility standpoint. It will produce energy savings and make our environment cleaner, and that's something that we have to accept as a new reality."
Of course, many other challenges were discussed by this panel. It ended with a challenge for SPESA from the panelists – keep this discussion alive as a continual conversation in the industry. SPESA agreed. I strongly encourage you to follow SPESA and attend their future events to get a fresh perspective on the ever-changing state of our industry.
Want to learn more about these and other industry issues and the supporting and enabling role technology plays? Join the conversation by phoning (315) 791-4006 or visiting the website cgsinc.com.