Technology adoption in consumer goods manufacturing in Asian, low-cost sourcing countries

Abstract

With increasing cost of labor, additional regulatory pressures, and changing consumer habits, consumer goods manufacturers in low-cost sourcing countries in Asia are increasingly looking at manufacturing technologies to help. These manufacturing technologies in the apparel industry range from electronic sewing machines that have been around for decades to the precision control robotics that are still in the development phase. We aim to demonstrate the benefit of technology adoption and catalog the barriers faced in implementation. To achieve this, the project first explores the extent of technology adoption within the Li & Fung supplier network through the use of the technical audit; a questionnaire which includes 5 technology related questions that are filled out on-site by a third party auditor. This analysis is then expanded through a vendor survey launched to hundreds of factories that asks additional questions around technology adoption. Finally, this analytical review of technology adoption is complemented by an in-depth design and implementation of a technology system, specifically an Industrial Internet of Things (IIoT) system, at a bottling factory. This study further demonstrates the potential impact of technology in factories and the challenges to implementation. In demonstrating the benefit of specific technologies, we are able to show a statistically significant correlation of higher performance with two technologies from the technical audit. Through our IIoT project, we also simulate how an inventory buffer optimized with the data gathered by the IIoT can increase productivity by as much as 34%. Finally, we catalog financial, strategic, and organizational barriers that factories face.