Known for its innovative textiles, functional fabric supplier Everest Textile Co., Ltd. is a key supplier of the world’s leading sportswear brands, such as Nike and Adidas. Many of those textiles are produced at its manufacturing complex in Shanshang District in Tainan, which does everything from spinning and weaving to dyeing, laminating and processing.

The factory complex is nearly 30 years old, and signs of its “age” are openly visible. Its structures are generally old and simple, consisting of nothing more than corrugated steel in some spots. From the outside, it looks a bit like a rural steel factory, just on a much bigger scale.

But out of view inside the plant, Everest Textile is engaged in a process few other Taiwanese enterprises have attempted, trying to transform the facility into the “smartest” factory in the country outside of the high-tech sector.

“We could now be said to have achieved Industry 3.0 to 3.5,” says Everest Textile President Roger Yeh proudly. “In the future, we’ll be able to cut the time from when we receive an order to when we deliver it from three months to one month, or even one week. And we can achieve mass customization.”

Mass customization – making things “custom-made” at mass production costs – is one of the key elements of Industry 4.0.

What Yeh described was Everest Textile’s NT$450 million smart factory renovation plan launched at the end of 2014. The initiative reflects the company’s ambition to be Taiwan’s pioneer among textile manufacturers, and even among manufacturers of any kind, in using Industry 4.0 to reinvent itself.

Recouping the Investment in 18 Months

To many, Industry 4.0 is synonymous with automation, a perception Yeh considers to be somewhat inaccurate. “Industry 4.0 is not just about automating machines,” he says. “It involves the whole [production process].”

The company started the process with the machines in a single factory in its complex, integrating the real and virtual worlds by monitoring the machines in real time and connecting them together via an online network.

Mark Hsieh, a section manager in the company’s Smart Everest Office, explains that when the program was launched two years ago, various sensors were installed on the machines to connect them together on the same online network. The sensors collect steady streams of production data and transmit the information to the factory’s ERP (enterprise resource planning) system, which then aggregates the data and sends it to a cloud platform for big data analysis.

“The cloud platform is like a person’s spinal cord,” says Tony Hsieh, general manager of SAP Taiwan, a Germany-based enterprise software provider, that helped Everest Textile develop its cloud platform.

As with the spinal cord, the cloud platform is a nerve center that integrates the production system with upstream business and purchasing systems and downstream customer systems, Hsieh explains. This enables manufacturers to quickly react to changes in raw material supply and customer demand.

At Everest Textile’s Shanshang complex, the dyeing factory is further along than the other individual plants in adopting “smart” technologies. All of its production equipment is connected via an online network, helping it achieve two hallmarks of Industry 4.0: machines that can communicate with each other and production that is monitored in real time. Very few people are seen on the factory’s floor.

When a work order is loaded online and the barcode swiped, the computer automatically notifies every machine to get ready, telling them how much fabric will be dyed, the color to be dyed and the ratio of dye to water. On the factory’s second floor, the automatic feeder sends dye to the dyeing machines on the first floor.

During the dyeing process, production data is constantly collected by sensors and shown on large touch monitors in the factory, so that the staff on site may stay on top of what’s happening easily.

The data is then sent via the internet to the cloud platform and is analyzed automatically. The results are fed back to the production line, triggering adjustments that optimize the production process.

“Since the introduction of the system, it now only takes us one hour to dye 500 yards of fabric instead of the three hours before because raw materials are used more precisely and the production process is more efficient,” says Tien Po-wen, the manager of the dyeing plant. “We save about NT$600,000 to NT$700,000 in costs per month, so the investment in this one factory will be paid for in 18 months.”

Even more important, Tien stresses, is that real-time analysis of the data generated during production can be used to strengthen management of the process.

Yeh explains that in the past, the production data from one day could not be printed out and analyzed until the next day, leading to a delay in making adjustments, and data could not be accumulated, limiting the amount of analysis that could be done. Now, he says, data is analyzed as it is collected.

Once each of Everest Textile’s individual factories completes the process of being hooked up to the internet, they can be connected online and then turned into an efficient production unit with the help of artificial intelligence and its deep learning capabilities. When an order is received and is processed from beginning to end, data based on all parameters of production will be collected and considered as production occurs. As the system gets fed more data, it will learn on its own and eventually identify the optimal production method.

But more than just the software is needed for the factory to achieve the best results.

“Just buying the system isn’t Industry 4.0,” SAP’s Hsieh stresses. “Each company must think carefully about how the collected data can really help its management. That’s the key.”

Employees in Everest Textile’s fabric weaving plant have even suggested that after the plant is completely turned into a “smart” production unit in the future, people won’t be needed to watch over the machines all the time and the factory’s lights can be turned off to save energy. The company is now studying different measures to complement its factories’ smarts.

Forced to Innovate

Everest Textile’s decision to overhaul its production facility was not made simply to ride with the times. It was a move forced on the company by a rapidly shifting market and economic environment.

“Orders are getting smaller in volume but for more variety,” dyeing plant chief Tien says, explaining that orders that were once for 100,000 yards of fabric dyed in a single color have evolved into orders for 10,000 yards dyed in 10 different colors. Even if a customer needs a 300-yard special order for soccer uniforms, Everest Textile has to make it.

Because of technical limitations in the past, dyeing plants used almost the same amount of dye and water regardless of how big the order was that they were processing, meaning that the smaller the quantity, the higher the unit cost. High-variety, low-volume production was extremely challenging. With the introduction of smart solutions, however, high-variety, low-volume production is possible at a cost level similar to that of high-volume runs – the trademark of mass customization.

Also, manufacturers in old economy sectors that have hunkered down in Taiwan rather than heading for low-cost labor havens are finding it increasingly difficult to attract workers. Installing intelligent systems has had the added bonus of solving their labor shortage issues.

Those attributes proved highly appealing to Everest Textile, but because it lacked its own software or hardware technology, Yeh corralled nearly 20 vendors of information and communications technology (ICT)to develop solutions and recruited 16 ICT software and hardware engineers to establish the Smart Everest Office.

Outside of the cloud platform, which was supplied by German company SAP, everything else was furnished by Taiwanese suppliers. Taiwan’s biggest industrial computer company, Advantech Co., Ltd., provided the interfaces that connected SAP’s cloud platform with other contractors’ control systems.

“ICT is Taiwan’s strength. We ran into a lot of problems, but the Taiwanese vendors all had the technology needed to solve them,” Yeh says.

Even with that support, making a nearly 30-year-old factory complex and aging machines “smart” was a tall order.

“The hardest part was changing our operating procedures and habits that had built up over time. That took time to change,” says the Smart Everest Office’s Hsieh, who has worked for Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) before.

Despite the challenges, Yeh is determined to complete the transformation of the entire Shanshang complex into a smart production unit in two and a half to three years. In the future, he envisions connecting the facility online with suppliers and customers, and developing new commercial models to extend his business from manufacturing to services. He has already begun discussions with material suppliers to encode all of their raw materials.

By improving the competitiveness of its base in Taiwan, Everest Textile is showing other companies in the old economy sector how they can keep their roots in Taiwan and fend off pressure to relocate their operations to lower cost production bases overseas.

As Yeh says, quoting an old Chinese saying: “Once you’ve transformed and upgraded your operations, you no longer have to move from place to place in search of water and grass like a nomad.”

Translated from the Chinese article by Luke Sabatier