Setting goals for a company that has a history tracing back 250 years, being a pioneer in its core business and also the biggest suppliers with huge global market share, can be daunting… but not for Coats Plc. The enthusiasm and passion that runs through the team to transform the company from ‘being the biggest to being the thought leader’ is infectious. With motivated people in key positions and a good mix of old-hands and fresh talent, Coats is ready to take on a bigger role for the next level of growth over the coming 15-20 years, not only keeping pace with changing dynamics of the sewn industry but also anticipating and providing solutions to support the evolution of the industry and tap newer opportunities. Recently, in a freewheeling interaction with Paul Forman – Group CEO and Ashok Mathur, Regional Chief Executive, South Asia at Coats Plc. in Bangalore, Team AO discovered the passion that drives and differentiates Coats from their competitors…
With a strong footprint in the core thread business where it is the undisputed global market leader, Coats Plc. took a strategic decision 5 years ago to reposition the company, drawing upon its latent capabilities to become leading suppliers, setting the rules of the game. Among the first things to be done was to put a fresh team in place for this new journey. Paul Forman took over as Group CEO just over four years ago and with wide experience in global manufacturing, as well as strategy consultancy and M&A advisory services, he is no doubt the right man for the job. “My role is to ensure that five years from now, Coats will be a leading value adding partner in our core business, making inroads into new product areas, which are often referred to as the speciality business and strengthen the positioning of the brand in the crafting industry,” says Paul. Many may think of this vision as a tall order, but not the Coats team. “We have a DNA of putting ourselves in the customer’s shoes and then finding solutions, this same commitment will propel us forward and create new opportunities,” adds Ashok, who has spent 30 years living the vision of the company.
“My role is to ensure that five years from now, Coats will be a leading value adding partner in our core business and also making inroads into new product areas.”
The journey to the next level has already begun and the centralized R&D team is working on new products and solutions to elevate the company as a service provider. The recently introduced Coats Global Services is one decisive step in that direction, created with the specific aim of helping industry partners to realize productivity and supply chain gains, develop people and enhance corporate responsibility, worldwide.With goals that set the rules to achieve success through customer-focused innovation and winning propositions driven by motivated people and global teamwork, the two imperative themes at Coats are ‘value’ and ‘people’.
While the company is a global player, making US $ 1.7 billion in sales in 2013, the urge to penetrate deeper is paramount and guiding operations at all its regional business centres are five-core principles: Freedom to operate; Delivery (keep our promises); Openness and honesty; Customer led innovation; and Energy for change. “While Ashok takes all the day-to-day decisions for the region and has a budget allotted for implementing values and innovations, Rajiv Sharma, the Divisional Head, and I are the nodal points where ideas and important changes are discussed. So while I make sure that the same directions guide the global team for synergy, the local business is the responsibility of the regional heads,” says Paul. The teams are encouraged to interact, share experiences and benchmark practices, all of which make working with the company a unique and engaging experience.
“With a 95% track record of supplying any coloured thread in 48 hours, the real challenge is to support the industry to meet the challenges of speed and colour matching, both of which can make or break a company.” – Ashok Mathur, Regional Chief Executive, South Asia, Coats Plc.
South Asia is very pivotal to the growth agenda of Coats. “With this region evolving as a market, there are many new opportunities that are coming up,” says Ashok. While apparel and footwear are already major market segments, the demand is expanding for the entire spectrum of speciality threads and yarns covering automobile seats, airbags, filtration products, fire retardant and other performance products which are among the emerging categories the company envisages as the future growth areas. “This region is very interesting; it has players at different levels of industry evolution. There is Sri Lanka, which has the most sophisticated information sharing and partnership approach to business. Bangladesh, which has seen exponential growth but is currently going through the well-known challenges on compliance, Pakistan which is poised to take advantage of GSP+ with the EU and India which should get back to higher export and domestic growth once the economy returns to a higher growth path,” shares Ashok.
Indeed, this unique mix of industry challenges and opportunities makes the region a versatile work place, pushing the company to outperform as a total solution provider. “With a 95% track record of supplying any coloured thread in 48 hours, the real challenge is to support the industry to meet the challenges of speed and colour matching, both of which can make or break a company,” says Ashok. As pioneers in the science of colour matching and digitizing colour, recent solutions like Coats Colour Express, a web-based service that provides customers with the world’s fastest, most accurate and colour sampling service for industrial sewing thread, Coats is taking huge strides in supporting supply chain needs. Coats Colour Stock Match, a part of the Coats Colour Express solution, is already being used by 800 customers in 50 countries to enable quick and easy location of possible colour match thread in existing stock.
Sitting at the top with a bird’s-eye view of the changing global scenario, Paul shares what he perceives as the top 5 trends that will determine the direction of industry over the next few decades. He and his team are putting appropriate strategies in place to address these trends. According to Paul, the biggest trend is going to be the need for productivity enhancement along the complete supply chain. “There is an awareness of the need for end-to-end optimization, as the industry is facing a crisis with diminishing returns becoming the reality of business,” says Paul. Coats, which has always moved with the business is already looking at solutions in this direction.
The second major emerging trend is ‘speed’, both within operations and also in sourcing. “Today, retailers are looking at a combination of far-sourcing, near sourcing and in-sourcing to meet a global fashion year which has travelled from a two season cycle to a two week cycle,” shares Paul. Emerging hot-spots for near sourcing are Turkey and Central America, with Morocco, Tunisia, Egypt and Honduras fast catching up. Paul observes that while 70% of sourcing is from far-sourcing, 30% is catered by near-sourcing, especially for those products that have to be in stores in a few weeks. “The movement of in-sourcing has been hyped and I don’t think that the mass products will ever go back to the Western countries, but high capital intensive products like speciality yarns may go back to the West,” reasons Paul. He adds that what brands are looking for today is a China plus plus strategy, which implies sourcing from China, plus Asia, plus nearer home so as to meet the apparel needs of consumers today.
The third definite trend emerging is the need to differentiate, which leads to the fourth trend of innovation in product and service. It is here that concepts like sustainability and Green find an opening. “At Coats, we are constantly working to meet consumer-driven needs on environment and product innovation. Thread and zippers that are bio-degradable or which glow in the dark are just a few of the innovations in that direction,” shares Paul. R&D is at the core of development and innovation is customer- and market-driven.
The fifth trend which has been the latest focus area is the need to protect brand equity by taking responsibility for the supply chain that gives you the product,” says Paul. No doubt, recent incidents in Bangladesh have played an important role in highlighting the need to be more ethical in sourcing and also to take responsibility, but Coat Global Services was put in place even before the incidence, clearly indicating a company with a high degree of responsibility and commitment to give back to the industry.
Having defined the parameters and set the pace for future development both Paul and Ashok are very confident that Coats is well positioned to not only meet the challenges of tomorrow, but also take leadership position in guiding the industry over these transforming years. “I think we are poised on the cusp of a new phase of the industry with new manufacturing centres evolving and old ones changing their working styles, while new challenges threaten old stereotypes. Coats is excited about the future and believe we are well on the way to being not just the biggest player in our chosen product areas but also becoming a truly pioneering and leading business partner to the apparel and footwear industry globally,” concludes Paul.
