Battle for a cutting edge continues
12/06/2013
Gerber chief executive, Mike Elia, highlighted Yunique 360, a platform that incorporates 3D imaging technology to reduce the need for users in the textile and apparel sectors to send samples back and forth, increasing the efficiency and speed of operations. “Today it’s all about speed,” Mr Elia said. “But for speed to work in the value chain, data has to move seamlessly and everything has to be integrated free of variability. Seasonal cycles are much shorter now and our clients are bringing out new products faster than ever.
Since the company was taken private in August 2011, Mr Elia said it discloses no financial details now. But he said Gerber’s earnings went up by close to 60% in 2012. “We’ve done that not just by cutting costs but by investing in our technology. So you can expect more innovation and more new products from Gerber over the next several years.”
His counterpart at Lectra, Daniel Harari, said that the effects of the economic downturn that began in 2008 have been so great that what we now have is “reset economy”. Lectra has responded by keeping its main manufacturing and service centres in France, by working hard to focus on its top customers (the top 300 account for 45% of revenue, the top 3,000 for the next 45% and the rest, almost 20,000 companies, bring in the other 10%) and by putting its prices up.
Between 2007 and 2012, the price of Lectra’s technology has gone up by an average of between 3% and 5% per year. Mr Harari said the price of his competitors’ technology over the same period of time decreased by between 2% and 5% per year. He said the growing gap has helped Lectra focus on what it offers to justify asking companies to pay more. He explained that in some cases a day’s downtime on his company’s cutting technology can cost user companies the same as a whole year’s service fees. The technology is self-diagnostic and can almost always be serviced remotely without interrupting operations.
As part of its response to the new business environment, Mr Harari said Lectra aims to help its users improve their performance in lean production and is in the process of applying lean principles to its own operations internally. As a result, he says Lectra is now able to make its Vector cutting technology in France for the same cost as its competitors are making alternative products in China. “Costs in China have gone up,” he said, “but another part of this is that we have become more productive. We are at the point now that even if a competitor offered a user an alternative cutter for free, the user would still be better off with the Vector because the savings in fabric more than make up for the price of the technology.”
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