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e-Magazine (For the Japanese version of this article)

New Series: Employing AI / IoT to Create New Businesses A Garment Production Platform Linking People and Technologies Hidekazu Kawano CEO & Founder Sitateru Inc. [Date of Issue: 30/June/2017 No.0268-1048]

Date of Issue: 30/June/2017

New Series: Employing AI / IoT to Create New Businesses
A Garment Production Platform Linking People and Technologies

Hidekazu Kawano
CEO & Founder
Sitateru Inc.

Total optimization (the creation of a virtuous circle) in garment production requires innovative approaches that make proactive use of IoT and ICT.


A garment production platform

Sitateru Inc. has responded to the paradigm shift occurring in the garment industry by developing an Internet-based garment production platform drawing on an extensive database of businesses (shown below in red) and another of garment factories (in blue) to provide an optimal manufacturing environment.

Platform of garment production Keeping pace with the rapidly digitalizing fashion market

Faced with increasingly diverse consumer tastes, the apparel and fashion market has to develop a range of different sales channels that avoid consumer commodification, including high-mix, low-volume production options that reflect changing demands, as well as mass customization/personalization for niche markets.

For example, while there have always been businesses that will supply a custom order for even just one shirt or suit tailored to size, in recent years there has been a gradual increase in services where such orders can be placed online. The industry is also beginning to feel the need to adapt to the rapid advance of digitalization, including using AI, big data and other technologies to analyze consumer behavior—for example, creating data from social media conversations (information) about fashion—and reflect these trend predictions in fashion.

Digitalization has also become an urgent issue for the factories supporting the apparel and fashion industry, mid-stream garment factories included. The micro-enterprises and small and medium enterprises scattered around Japan face a whole host of challenges, including heavy dependence on specific partners such as major manufacturers, trading companies, and independent brands; the market changes described above; the offshoring of production facilities; adjustment around busy and slow times caused by exchange rate fluctuations; and the slow uptake of ICT as production infrastructure.

With the number of domestic garment factories down to around a third compared to 30 years ago, resolving the various challenges they face will first of all require reducing their dependence on specific customers and instead diversifying their customer portfolios by making effective use of the Internet and technology to broaden their “frontage,” finding multiple new customers suited to their particular production environments, boosting operational performance, and developing systems geared to low-volume production. This in turn will open the way for risk-hedging on future problems.

In particular, one perennial issue has been how to boost capacity utilization rates during quiet periods.
By producing low-seasonality garments during quiet periods, garment manufacturers can develop more balanced production plans, making effective use of surplus resources in their factories to develop an efficient cycle of high-mix, low-volume production that also creates more stability in stable employment and revenue.

A partner plant manager using an app

A partner plant manager using an app

Sitateru's strategy for shifting from partial to total optimization

Sitateru's production system was developed in response to small retailers' frustration at not being able to offer customers the clothes they wanted to make for consumers because apparel businesses' excessive emphasis on profit was driving so many production facilities offshore, while also causing structural duplication as a result of their focus on partial optimization. Innovative approaches were needed to realize total optimization in the garment industry, including the proactive introduction of IoT and ICT.

Recognizing these challenges, Sitateru has introduced three innovations that actively employ IoT and ICT to realize total optimization in the manufacturing part of the garment industry.

Sitateru's three innovations

1. Reaching out to businesses that want to make garments

First, we have developed our own chat tool, called My Atelier, to provide a quick response to the various different requests from businesses wanting to make garments, bags, and other apparel products. This chat tool enables businesses to engage with the My Atelier concierge1 via smart phone or computer without any need for complicated knowhow or preparations, opening the way for garment production that is not reliant on place or environment.
1 Professional garment production advisors

2. The Sitateru control system

Our second innovation is the Sitateru control system, which comprises a database on factories nationwide together with a matching system. We contacted 300 micro-enterprises and small and medium-sized enterprises around Japan that have tremendous technological capacity but have traditionally been heavily dependent on fixed business arrangements as the standard business practice in the apparel industry, with the result that other businesses outside their usual customers have been unaware of what they can offer. By bringing together data on their technological capacity and the items they are able to produce, as well as their price bands, lead times, and busy and quiet periods, we can now match orders from new customers with the optimal factory for their purposes, realizing high-mix, low-volume production with a short turn-around time.

3. Smart factory project

Thirdly, we are currently pursuing a smart factory project to bring IoT into garment factories. Our aim is to introduce IoT sensors and applications to analyze operational status and display this online in real time, building an extremely efficient supply chain geared to responding rapidly and flexibly to customer needs.

New infrastructure utilization methods

As outlined above, our first step was to put ourselves in the place of businesses wanting to make garments and find a non-intimidating and unobtrusive way of using ICT and IoT to create an environment in which customers feel comfortable and confident in placing production orders.

Currently, we are receiving a growing number of garment production orders not just from apparel and fashion brands but also general companies and local governments. In response to requests from these customers, we can offer garment localization—local production for local consumption, in other words—that uses only garment factories in a particular area. There have been an increasing number of cases where, for example, a local department store has asked us for a production and sales plan using locally-produced cloth, or we have used a local factory, locally-sourced cloth, and a local designer to produce truly localized workwear for employees at local companies. This effectively takes the concept of infrastructure beyond something used simply for production to a tool for realizing different ideas and designs.

A factory manager with Sitateru staff

A factory manager with Sitateru staff

A future woven by people and technology

We expect to see the demand for high-mix, low-volume production boom in the coming years, and in the midst of what is being described as the fifth industrial revolution—or the “sharing economy”—new production methods like these are indeed likely to become the mainstream. Rather than partial optimization that protects the interests of single players' vested interests, we need to develop a business model based on total optimization that has been refined by industry as a whole, ensuring the circulation of profit.

Sitateru's business philosophy is to realize “a future woven by people and technology,” working to enable people in various positions to produce garments freely wherever and whenever. As Japan's first garment production platform, we aim to use people and technologies to link the garment industry in a more open and seamless way to satisfy both customers wanting to make garments with the factories with that capacity. We will create a world in which consumers picking up our garments can experience joy in the form of diverse and individualistic garments born out of this open environment.

Partnership with various domestic garment factories and cloth manufacturers  “Production by the optimal factory chosen from a nationwide producer database of garment factories, cloth and materials manufacturers, and textile companies, etc. The database includes more than 1,000 factories, among them 300 partner factories and 73 cloth, materials, and textile companies, as well as more than 70 product types (as at May 2017).”

Partnership with various domestic garment factories and cloth manufacturers

“Production by the optimal factory chosen from a nationwide producer database of garment factories, cloth and materials manufacturers, and textile companies, etc. The database includes more than 1,000 factories, among them 300 partner factories and 73 cloth, materials, and textile companies, as well as more than 70 product types (as at May 2017).”

(original article : Japanese)


Business Outline
A garment production platform business that uses the Internet to provide an optimal production environment through a database of (a) businesses that need to produce various types of garments and (b) small and medium-sized apparel manufacturers in Japan and overseas that have previously been unable to exploit their outstanding technologies due to factors because they lack the necessary ICT, etc. Advice and production knowhow provided by professional staff via the Sitateru concierge tool combined with a wide-ranging domestic network of apparel manufacturers and partner factories enable high-mix, low-volume production with a short turn-around so that businesses can make the garments they want to make.

Hidekazu Kawano CEO & Founder Sitateru Inc.
About the Author
Hidekazu KAWANO, CEO & Founder, Sitateru Inc.
Worked for a manufacturer and a foreign-affiliated financial institution before setting up a comprehensive risk management business and Sitateru’s predecessor firm. Went across to Silicon Valley, San Francisco in 2013 to increase his professional knowledge, including the development of a system-sharing business using leading-edge IT. On his return to Japan in 2014, he established Sitateru Inc., and now divides his time between Kumamoto and Tokyo. His innovations have been showcased in various media, including two appearances on the economic documentary TV series Nikkei Special: Dawn of Gaia.

He participates as a leading professional in the Ministry of Economy, Trade and Industry’s Study Group for the Promotion of Fashion Sector Collaboration between Designers and Textile Production Areas, as well as Google’s investigation into the digital revolution and related regulations. Sitateru was selected as a model company for the Ministry of Internal Affairs and Communications’ Council for Local Employment Development program for the promotion of new IoT-based corporate partnerships. Kawano also lectures part-time at Kumamoto University.


(For the Japanese version of this article)


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