Welfull Group Co., Ltd., founded in 1993, is an import and export trading company for textile and apparel products. Recognized by eight ministries in China including the Ministry of Commerce as a national pilot company for supply chain innovation, Welfull focuses on integrated development in modern commerce, venture capital investment and platform services.
With 15 years of experience in the apparel industry, Welfull has established its name in the international arena and has amassed many customers and supplier resources from around the world. It is one of the leading international traders of textile and apparel in China with an annual export-import volume approaching 400 million U.S. dollars.
Five Pain Points in the Apparel Manufacturing Industry
Industry veteran Welfull encountered many market challenges during the COVID-19 pandemic. Mr. Xu Zhenhao, CIO of the Welfull Group, identified five pain points in the textile and apparel manufacturing industry amidst the global pandemic.
- Labor costs are growing each year, forcing the transfer of the entire industry to Southeast Asia and even Africa
- Compared with apparel brands, the apparel manufacturing supply chain is slower in response due to a lower level of digitalization
- The apparel manufacturing industry often has low added value. Since most apparel manufacturers (mostly OEMs and a few ODMs) continue to provide processing and manufacturing services, this inevitably leads to a thinner profit margin for businesses
- Lower levels of standardization than other industries; leading to products of a mixed quality that fail to satisfy the demand of buyers from major global brands and retailers
- Most upstream suppliers operate on a small scale because of the lower volume of demand from non-Chinese brands and retailers compared to Chinese-domestic sales orders. Small suppliers often encounter difficulties in financing, which in turn can hinder company growth.
How to Survive: Overall Digitalization
- When it comes to cost control, Welfull hopes to reduce costs and increase benefits through centralized purchasing. In other words, costs are brought under control by shifting processing overseas to Bangladesh for example, to new facilities owned by the Welfull Group or partners, and integrating resources for transnational cooperation.
- To speed up response time, Welfull is putting a digital platform in place that can facilitate resource sharing and more efficient coordination throughout the supply chain.
- In relation to added value, Welfull hopes to work with third-party platforms on quality checks and logistics so that they can draw on their respective strengths and stretch upstream to increase the percentage of ODMs.
- Welfull has also established a finance company for the supply chain to help small and medium-sized suppliers grow together with Welfull.
Mr. Xu says that, “Welfull aims to build a complete and efficient ecosystem of global presence that is oriented toward cross-border trade and underpinned by a digital platform.”
In light of this, Welfull has drawn up a digital blueprint that covers every part of the group.
- In the upstream section, by building its own supplier portal, Welfull will realize effective coordination with external suppliers using a Product Lifecycle Management (PLM) solution.
- In the downstream section, a cloud-based showroom will be developed to improve engagement with customers. In the near future order scheduling, sample display, product customization and inquiry will be completed online.
- In the middle section of the supply chain, a node management system is being established to connect every link throughout the supply chain, covering all enterprise systems.
Centric at the Core of Digital Transformation
The blueprint explains exactly why Welfull has chosen to adopt Centric PLMTM as its PLM solution.
Welfull believes that implementing Centric PLM as the core of its supply chain innovation planning will contribute to a closed loop of data links and information flows.
In addition, the apparel manufacturing sector has changed from the traditional model where “one is responsible for every aspect of an order” to cooperation between different departments concerning business, fabrics and accessories purchasing, technology, production and quality. Welfull was crying out for a new digital system, especially during the outbreak.
When Welfull first resumed operations, if an executive needed to find out information regarding an order, they had to organize a meeting where teams would be present and show their spreadsheets to share data. However, social distancing requirements during a tense epidemic situation made it very difficult to have such a meeting. This is no longer an issue, as Centric PLM allows all departments to work closely on the same platform.
Last but not least, establishing a digital process and the accumulation of digital assets will bring about an improvement in the efficiency of reordering and style selection, giving Welfull a competitive edge during collaboration with foreign customers.
Wise Choice: PLM Online in Nine Weeks
Mr. Xu says, “Centric and Welfull are closely aligned in their global vision, and Centric has impressed us with their second-to-none industry commitment and the professional consulting services we have seen over the project. Whether we move toward an OEM or ODM business model, Centric PLM is highly configurable so it can flexibly and effectively accommodate our needs and greatly shorten implementation time.”
Centric PLM is expected to digitalize the entire business process, from inquiry to sample making to delivery. Information islands can be eliminated to promote efficient teamwork and reduce communication costs. For example,
- Material management: A standard database is built to identify roles and responsibilities in the development and utilization of materials in bulk production
- Style management: Everything from basic style files to the core BOM is brought under fine-grained management for better cost control
- System integration: Centric PLM’s connection with Welfull’s Supplier Relationship Management (SRM) solution provides better coordination with upstream suppliers
The progress of the implementation has been closely aligned with the goals set by Centric in the early stages of the project, and the solution was smoothly put into force in less than two months.
“A benefit of digitalization during this period is that it guarantees better involvement of our staff, and it is a good time for us to strengthen our soft power,” concludes Mr. Xu.