Taiwan’s First Textile Mill to Embrace Industry 4.0
Everest Textile President Roger Yeh has invested tens of millions of NT dollars to build Taiwan’s first intelligent textile production line. Yeh believes that, if Taiwan’s textile cluster is well-estasblished, there’s no reason to fear the red supply chain.
Taiwan’s First Textile Mill to Embrace Industry 4.0By Elaine Huang
From CommonWealth Magazine (vol. 590 )
About half an hour’s drive from the Tainan high-speed railway station is the rural district of Shanshang. It is easy to miss the Everest Textile headquarters on the side of the road there because it is almost hidden behind a wall of tangled shrubs and vines.
Everest Textile recently made headlines after presidential candidate Tsai Ing-wen, who has meanwhile won the election, wore one of the company’s products - a fluffy lemon yellow down jacket – while on the election campaign trail. The jacket from the company’s EverSmile brand subsequently sold like hot cakes.
Intelligent Production Saves Personnel Costs
However, only industry insiders know that Everest Textile counts among the early adopters of “industry 4.0,” the computerization of manufacturing promoted by the German government that has meanwhile unleashed a global smart factory craze. Everest Textile teamed up with Advantech Co. Ltd., a global leader in industrial computers and automation, to build Taiwan’s first intelligent textile mill in an old factory building. The smart textile mill is the first example of “industry 4.0” being put into practice in Taiwan.
Inside the dyeing and finishing plant, a machine scans the chip on a cart loaded with a batch of undyed fabric. On the dyeing and finishing line, machine A pours the dye and weighs it, then tells machine B how much dye is to be used and how much fabric has to be dyed. Several machines are connected with each other to work like the operating system of a giant computer. The pass rate on the production line can be measured immediately, enabling real-time adjustments.
Since the entire process is automated, there isn’t a soul in sight. Gone are the days when workers wearing masks to protect against toxic dyes had to keep a close eye on the production line all the time.
Everest Textile forecasts that the smart factory will increase productivity by 30 percent with concurrent manpower cuts of 30 to 50 percent.
The rise of the red supply chain, a term for import substitution in China, has dealt a severe blow to Taiwanese electronics manufacturers. Yet Taiwan’s makers of functional fibers such as Everest Textile and Eclat Textile in New Taipei City do not need to fear the competition from Chinese mega textile mills with ten times the output. As suppliers to the world’s leading sportswear brands such as Nike and Under Armour, the island’s functional fiber makers hold 70 percent of the global market.
“We will only be able to maintain our competitive edge for two years, so we need to come up with further breakthroughs,” remarks Yeh, revealing a keen sense of crisis.
Everest produces 70 percent of its output in Taiwan. The company was able to break free from the cost trap thanks to the secret weapon that is industry 4.0. With its intelligent production line, “Smart Everest” can afford to manufacture in Taiwan.
This might be a way out for Taiwanese companies who are racking their brains how to return to Taiwan now that rising labor costs in China and other low-cost countries make overseas production less lucrative.
“The government likes to scare us, telling us how many FTA (free trade agreements) South Korea has signed. I tell you, it’ s not that bad,” Yeh says emphatically. “The point is whether you make yourself stronger; if you are not getting stronger, it won’t help no matter how many FTAs you sign,” the textile entrepreneur says.
Foresight and an Open Mind
Yeh, who has worked in the textile industry for more than 40 years, is not a tall man. But despite his small stature, the 69-year-old has a great presence and enjoys a good reputation in the industry for his bold investments in equipment and technology.
In order to bolster the company’s position and increase future competitiveness, Everest Textile, which boasts annual revenue in excess of NT$8.2 billion, invested NT$350 million or 4 percent of annual revenue over the past two years in the development of industry 4.0.
Outsiders voiced concerns that Everest Textile, as a medium-sized enterprise, was taking too great a risk with this massive investment. A graduate of the Taipei Institute of Technology, the precursor of National Taipei University of Technology (Taipei Tech), Yeh emphasizes hands-on experience, and firmly believes in the motto "Don’t think too much; what counts is doing it.”
Yeh reads at least one book per week and posts his handwritten excerpts on bulletin boards in the factory to spread his insights to employees who cannot find the time for reading. In the textile industry he is therefore known as “Teacher Yeh.”
Two years ago, Yeh came across an article on industry 4.0, the fourth industrial revolution. The concept fascinated him so much that he kept looking for further literature on the subject. He used his established model of reading books on behalf of his employees to impart the ideas of industry 4.0 directly to those working on the production line. At the same time, Yeh set up an intelligent manufacturing workgroup with himself at the top. He scouted the electronics industry for talent with expertise in automated control systems. Cautiously, the company explored the way forward, gradually learning by doing directly on the production line.
“In the beginning, we had no clue what this was about; we did not even know how to make a presentation,” says Allen Lin, assistant vice president of Everest Textile’s Dyeing Department. However, faced with a boss who does not take No for an answer, they kept trying. “The president is very dominant. When he says he wants to do something then he will follow through,” Lin says.
Within two years’ time, Everest Textile managed to bring online a smart model production line at its dyeing and spinning mill in Tainan. The company plans to invest in artificial intelligence and big data applications to maximize results by looking into customer applications, market trends and target marketing.
Smart Production Line
“President Yeh is too thrifty to install air conditioning in his office, but he is willing to invest tens of millions in equipment,” Advantech President Chaney Ho gushes with admiration for his business partner.
Advantech’s automation software is being applied on the Everest Textile production line. Yet Ho frankly admits that entrepreneurs like Yeh who dare to make massive investments are few and far between in Taiwan. Most manufacturers doubt that such investment generates direct cost benefit and therefore shrink from taking action.
Taiwan’s textile industry, however, is quite aggressive and willing to try.
Last June, Douglas Hsu, chairman and CEO of the Far Eastern Group, a major shareholder in Everest Textile, personally came to Tainan to inspect the smart pilot production line.
“You really did it!” Hsu exclaimed at the site, not hiding his utter surprise. Hsu had been among the doubters of the project and never committed to any investment in it. Meanwhile, he has decided to introduce smart manufacturing to the group’s textile mills in China and Vietnam.
Yeh is not afraid of competitors following suit. “Anyone who wants to do the same is welcome to come and take a look. I hope that Taiwan’s textile cluster can perform well, then we won’t have to be afraid of the red supply chain,” Yeh says.
Translated from the Chinese by Susanne Ganz