Manufacturing Mantra: Digitize or Die

I just returned from Hong Kong. The conferences, “Prime Source Forum”, and “Made in Asia” that we (Adrienne Braumiller of Braumiller Law Group and myself) attended this past March were led by the mantra of “Digitize or Die.” In my opinion, what this essentially translates to is “get with the program” regarding new innovations in technology, because like it or not, there is a good chance that the majority of your buyers are the tech savvy millennials.

Speaking of millennials, in Hong Kong, it seems like all of them are digitally tapped into the Matrix. From the UBER drivers (Yes, they have UBER in Hong Kong even though it’s supposedly illegal) to every rider I saw on the metro. Just an observation, it’s really quiet on the train while in transit because everybody has their face in their phone. Yes, everybody! In the bigger picture, the official “network” in China, is comprised of approximately 800 million people who spend a good portion of their lives on “WeChat”, which is the equivalent of Facebook in China. It’s the world’s monster of a social network, with enough selfies and pictures of food snapped on a daily basis to make Zuckerberg at least roll his eyes and mumble, “That’s right, only Chinese companies get that kind of market access.” The Chinese use their cell phones (often plural) to conduct “life” even to the point of not needing to carry a wallet. That’s right, everything you need to pay for that candy bar and soda at the local store is right there in your cell phone. Just hold your cell phone in front of the scanner at checkout. From my perspective, it’s pretty scary to have your banking information that “out front” on your cell phone, but, apparently that is not a concern in China….or even Hong Kong for that matter.

The HK conferences were in Kowloon, so we stayed at the W Hotel (nice property) which is across the street from what looked like an endless number of freight containers in the always busy port. The W Hotel is also directly connected to the Elements mall which is huge, like all of the hundreds of malls in Hong Kong. It was amazing to see just how many high-end stores there were with absolutely no customers and very little in the way of inventory on display. The reason being, the traditional brick and mortar stores have merely become fronts for the real revenue stream, which is online and via mobile. Go to the store, touch it, feel it, smell it, try it on, and if you like it, buy it cheaper on your cell phone on the way out. No need to pay that high overhead price. I recall the presentation given by the CEO of a website called, (fashion) which was recently acquired by Alibaba. He mentioned that if two years ago someone had told him that 92% of his sales would be conducted via a cell phone, he would have laughed. It’s a sign of the times, just look at what is happening to the big retailers in the U.S. Good-bye Sears, Kmart, and who knows who is next, Macys?

Given the current pace of the technology driven new frontier it will be interesting to see who is still standing by 2025.

Consumers in both China and the U.S. have come to expect what they want in a matter of minutes regarding the ordering process online, and within a couple of days maximum at their doorstep. I personally have become spoiled by Amazon. I am of course a “Prime” member just based on the number of orders I place in any given month, and would prefer to tap the keys on my computer for a few minutes rather than drive down the street 4 minutes to the local mall. I have also been a big fan of (website under the Alibaba umbrella) over the past few years and have sourced at least 50 Chinese companies. I started out waiting about (3) weeks for delivery, and now, the average is about (1) week, or sooner, as some companies are even warehousing in the U.S. and can deliver in (3) days.

Yes, Amazon is considering a warehouse in the sky, (what?) , but distribution technology aside, more importantly China leads the world in the manufacturing and many are aggressively incorporating technology into the supply chain, striving to make it better, faster, and even cheaper. According to both VP’s of Sourcing from both Puma and Nike, it used to take around (18) months to bring a new prototype to market, and now it can be accomplished in a matter of a few weeks.

Speaking of the larger sports apparel brands and new technology, kudos to Adidas who just debuted its newest shoe, which has, not a 3D, but a 4D-printed sole.

The German company said 5,000 of the “Futurecraft 4D” shoes will be available at retail stores in the fall and winter. It plans to start mass producing them next year and expects to have made more than 100,000 pairs by the end of 2018. The company would not disclose where the shoes will be manufactured.

Adidas (ADDDF) partnered with Silicon Valley-based startup Carbon to create the shoe, which uses a new technology called digital light synthesis.

3D printed materials are often rigid or malleable and wouldn’t work well for a shoe. But with Carbon’s technology, the material is springy and able to bounce back almost instantaneously.

The technology works by using UV lasers to project a pattern for a midsole liquid. The light turns the liquid into a solid and the result is a flexible, but durable, midsole.

The technology could save time and money in the production process and will allow for greater customization.

“We can produce up to 100 times faster than other 3D printing and additive manufacturing processes,” an Adidas spokesperson told CNNTech.*

Yes, we live in a digital age where the demands of staying competitive might even make a CEO consider only hiring millennials, as they are the ones who are “tapped into the Matrix”, and can therefore better identify with the necessary technology, as well as the end consumer. This is in fact the case with, as the CEO mentioned that the average age within his company is 25, and with him included, 26. I can’t imagine what the starting pay is that they are all entitled to….ha!

In conclusion, the trip to Hong Kong was eye-opening. You want to compete, stay frosty, stay informed, and stay aggressive. I’m not going to get left behind. I even have Alexa (Amazon Echo) helping me edit while I write this article, as she plays spa music for me. That’s right….Digitize or Die……….:-)

*Source: USA Today Money section


By: Bob Brewer, BLG Marketing