Sourcing Journal: Why C-Level Execs Cannot Ignore the Shop Floor

As a customer-centric industry, retail is often viewed in the lens of improving the front-end experience to boost sales, even by its top executives, and the factory side of the supply chain is too often “out of sight, out of mind” for C-level leaders. This mentality must change if the industry is to overcome the production and quality issues that the pandemic has worsened.

“If the C-level suite does not get involved, I predict that those retailers and brands are going to have a hard time existing three, four, five, six years from now,” said Jose R. Suarez, founder and CEO of Vaēso, a comprehensive digital manufacturing execution system providing real-time visibility to the shop floor, including work in progress.

In a recent discussion with Sourcing Journal president Edward Hertzman, Suarez said he “could count the fingers on my hand” the number of retailers that want to dive deep to help their factories and their overall manufacturing ecosystem.

While he acknowledged that C-level execs typically have narrow bandwidth, Suarez noted that available tools can equip them to understand today’s challenges on the factory floor and set targets for improvements in quality, productivity and speed.

Given the modern state of the world, one might not think these shop floor visibility technologies are enough to replace face-to-face interactions and inspections. But Suarez says he is confident that once retailers and brands have the “laser-focused” information they need from the factory floor, there is “virtually no difference” between the technology and an in-person visit.

He compared the ideal scenario for brands and retailers to the NASA Mission Control Center in Houston.

“You could be a brand or retailer with an office in Hong Kong or Ho Chi Minh City, and you have your five best apparel or footwear senior technicians,” Suarez said. “Each one is managing 20 factories and just zeroing in, hitting a switch and being able to speak to a supervisor on the shop floor by video conference and give them the knowledge so that they overcome problems. There’s absolutely no reason why that can’t be done.”

Vaēso’s digital shop floor technology is envisioned as a step in this direction, with the company placing RFID-enabled tablets at factory workstations. Each unit, whether it’s a bundle or single piece, will have an RFID tag. This way, every shop floor worker, or “artisan” as Suarez refers to them, can scan each item and convey product output and defective units back to management in real time.

The RFID integration is also key to providing brands with visibility into their current stock levels, an important step toward curbing the overstock issues that Covid-19 has exacerbated. In addition to the margin impact, it provides an environmental benefit consumers will appreciate.

“Some retailers have ended up having billions of dollars of inventory and saying, ‘We’ll have to burn them, or throw them in the trash,’” Suarez said. “That’s no longer acceptable by Gen Z and Millennials.”