Retail Relates
'Retail Relates' is not just a podcast; it's a journey into the heart of retail and commerce. Our episodes traverse the path from traditional marketplaces to digital platforms, highlighting the successes, trials, and invaluable lessons learned along the way. We're conversing with those shaping the industry—from the front lines to behind the scenes, the creative minds to the global strategists - offering a diverse 360-degree perspective. We're revealing the relationships and personal narratives that make retail engaging and accessible. 'Retail Relates' is an invitation to explore the world's interconnectedness through the lens of retail, encouraging listeners to discover the personal journeys and stories of those who drive innovation and unite us across cultures and continents.
Retail Relates
Customizing a Sustainable Future in Manufacturing: A Conversation with Roger Lee
In this captivating episode, we sit down with Roger Lee, the visionary CEO of TAL Manufacturing. With decades of experience in the garment industry, Roger provides a unique insight into how TAL Manufacturing integrates sustainability into its core practices. He shares the company’s impressive journey towards carbon neutrality by 2050 and its pioneering efforts in made-to-measure clothing, which not only reduces waste but enhances customer satisfaction as consumer demands evolve.
From the importance of curiosity in leadership to the transformative impact of technology on manufacturing, Roger's perspective underscores the need for innovation in an ever-changing landscape. He emphasizes the crucial role of artificial intelligence and computer vision tools in ensuring quality and transparency for consumers, reshaping industry standards.
Dive into the conversation as we explore what drives Roger personally and professionally, where he finds inspiration and his vision for the future of the apparel industry. This episode is perfect for anyone interested in sustainability, fashion innovation, or the intricacies of running a successful business in the modern world. Join us, and don’t forget to subscribe, share, and leave a review!
Roger Lee Biography
CEO | TAL APPAREL
A future-focused leader who joined the family business TAL Group (TAL) in 2005, Roger brought significant expertise from his strong IT background, setting TAL on a path toward innovation-led garment manufacturing as an INNOFACTURER®.
With a deep understanding of the garment industry, Roger’s expertise has enhanced TAL’s reach and ambitions. The company employs over 20,000 people in its manufacturing and supply chain operations across Thailand, Vietnam, and Ethiopia, with the capacity to produce more than 50 million garments annually. TAL supplies one out of every six men’s dress shirts sold in the U.S. By focusing on quality garments, on-time delivery, and value for money, the company has grown into one of Asia’s largest garment manufacturers.
Roger also oversees The Apparel Group (TAG) in the U.S., which provides design and logistics management services. During the 2020 pandemic, TAL acquired the made-to-measure pioneer J. Hilburn. Additionally, TAL shipped over 50 million masks to U.S. clients, including hoteliers, retailers, and consumer brands. In November 2020, TAL launched protective washable masks under the Enro brand, designed to withstand up to 100 washes.
Roger is actively involved in several trade organizations in Hong Kong, including the Hong Kong Government Textiles Advisory Board, where he served for seven years until reaching the mandatory tenure, the Innovation and Technology Commission (ITC) of the Government of HKSAR, and the School of Fashion and Textiles at The Hong Kong Polytechnic University. He is currently a panel member of the ITC.
So this is an episode that I've been looking forward to for some time now. From a personal perspective, it gives me a chance to reconnect with Roger Lee, who is the CEO of TAL Manufacturing. I met Roger many years ago when I was at Brooks Brothers. He is a remarkably intelligent leader, somebody who you can learn a lot from. And then, from a podcast perspective, the goal for Gotham Paula and myself has always been to introduce our audience to as many different perspectives of the retail and global commerce industry as possible, and today you will have the opportunity to listen to the CEO of one of the leading manufacturers around the world and gain just another wonderful perspective of this ecosystem that we love so much. Roger will take us through the innovation and growth path that Tal has gone through over the last several decades, and one of the points of the podcast that I think you'll find very interesting is the exchange between he and Gautam on Tal's commitment to sustainability, which really is decades old and was put in place long before sustainability became the buzzword that it is today. Roger talks through the commitment that TAL has to made-to-measure and how that continues to advance and modernize, and his perspective that at one point we may see made-to-measure become much larger than it is today and that in and of itself it can provide answers when it comes to efficiency and sustainability. And then just the opportunity to talk a little bit more to Roger about his own personal passions, his insatiable curiosity, the need to discover and to create solutions. In fact, we went on so much that we ran out of time with the episode and Gautam and I did not have the chance to debrief, and so you will not get that at the end of the episode, because the episode itself we just found to be interesting and so we let it go. Our co-host, paula, couldn't be with us for this one, but we know that she is listening.
Rich:Now let me give you a little bit about Roger Lee. He is a future-focused leader who joined the family business TAL Group in 2005. He brought significant expertise from a strong IT background, setting TAL on a path toward innovation-led garment manufacturing. As an innofacturer I love that term With a deep understanding of the garment industry, rogers' expertise has enhanced Tal's reach and ambition.
Rich:The company employs over 20,000 people in its manufacturing and supply chain operations across Thailand, vietnam and Ethiopia, with the capacity to produce more than 50 million garments annually. TAL supplies one out of every six dress shirts sold in the United States. By focusing on quality garments, on-time delivery and value for money, the company has grown. Tal acquired the made-to-measure Pioneer J Hilburn, based out of Dallas. Additionally, tal shipped over 50 million masks to US clients, including hoteliers, retailers and consumer brands. Roger is actively involved in several trade organizations in Hong Kong, including the Hong Kong Government Textiles Advisory Board, where he served for seven years until reaching the mandatory tenure, the Innovation and Technology Commission, itc of the government of HKSAR and the School of Fashion and Textiles at the Hong Kong Polytechnic University, and he is currently a panel member of the ITC.
Rich:It is an absolute pleasure to have you on the show, Roger. Thank you very much for joining us on Retail Relates today.
Roger:Happy to be here. Thanks for inviting me.
Rich:So where in the world do we find you today?
Roger:Today I'm in Singapore. We moved here as a family during COVID, my wife's in Singapore, so we now live here.
Rich:Well, we appreciate you joining us today. I am going to go ahead and start with our first question. We've read a little bit about your bio and we have it the more complete bio in the show notes. So we take a little bit of a less traditional approach and, instead of having you talk about everything you've done and go from your history beginning to end, what are the three pivotal moments that you think have brought you to where you are today?
Roger:I think it starts from childhood where my father said to me growing up that there will be three things will happen to you. One is after college you're financially cut off so you've got to make your own money. That all his inheritance will go to charity and don't come back to work in the family business. And at that time I didn't realize that the business was not owned by us. Okay, that was. I was a kid, I didn't really understand that. So he did cut me off financially after college. He has. I've seen his will. All the money has gone is going to charity. But the third one wasn't true and I did come back to the family business. The reason I'm saying that is I think if I wasn't given the first two conditions, I would have turned out different. I wouldn't have been so hungry. You know, he showed me the good life. I wanted to continue to have a good life. So I knew I had to work hard in order to earn the money. So that was one was to drive and motivation as a kid in order to earn the money. So that was one was to drive and motivation as a kid. The second one I would say was joining consulting. I was my first careers in consulting.
Roger:People would say what did you learn from consulting? How's it related to what you're doing manufacturing and apparel industry? I would say the biggest thing I learned was thinking from the customer's point of view. So you go in consulting, you go on customer's site, you're being paid I don't know what. The rate was crazy dollars per hour to consult and you know nothing right In the beginning. You know nothing. So the key thing is to really think from their point of view. What are they thinking? What's the customer thinking? What do they want? So you spend a lot of time putting yourself in their shoes.
Roger:In our business and most all businesses, I think it's know different. What is the customer thinking if you're trying to sell them something, why do they need you? That I think I learned from the consulting days. So that was if I didn't join consulting, I don't think I'd be able to do a lot of what I do today, because I've been trained how to think from the other point of view, and this also relates to people, not just customers your team what's your team thinking? How do they feel? How do you get feedback? In consulting, you have no hard assets. All your assets are people. So if you don't have good people, you can't retain good people, you know you can't do well. So I think that's no different in any industry. So I think that's the second big thing that I would say has really, really made me who I am today. The third one is a little bit more obscure in that I've been privileged.
Roger:I joined a group called YPO. It stands for Young Presidents Organization. It's a nonprofit started in the US. It's really for young CEOs to join and to learn from each other. Ypo has changed me in two major ways. One is I have a group of CEO mates I guess you can call them that. We get together once a month in a strictly confidential environment and we can share our pains and sufferings and success. It's a group of people that you have that normally in a normal work environment, you have no one to talk to a CEO of a company, no one to share pains, no one to learn from. That's really changed. That's helped a lot.
Roger:In addition, I'm lucky to go to Harvard every year. It's a YPO Harvard program, harvard Business School program. Every year I spend a week and this is where I'm going to in a couple of weeks In Harvard, completely shut off from outside and we just work. It's intense work. It's probably the hardest intellectual work I'll do within one week in the whole year is that week, and I've really learned a lot from the professors and from the fellow CEOs, members that attend, and to me it's just learning. I've learned so much from that. It's changed a lot of how I approach running our business. So I'll say those are the three biggest things I could think of.
Rich:And if you didn't wind up back in this business, what do you think you would have done instead?
Roger:I've always had the ambition. I'm not sure how easy it would have been to run a company Not for the money, not for the title, more from the point of view of creating something. I think you have the most power to create something when you're at the top of the company, because you can create something that's holistic. When you're running a function, what you create is within your function and is not as holistic as being at the top. So I don't know which industry I would have ended up in. I think there's multiple industries I could have done. I think not consulting. I think consulting is a great base for 10 years, but I really want to create something lasting and that's moving into industry. So I think I could have moved into different industries. I have a computer science, electronic engineering background, so I think there's a few things I could have done.
Gautham:Let me double click on that point. I have an engineering background, so I think there's a few things I could have done. Let me double click on that point. You know I have an engineering background myself before I moved into business. What was that point, that pivotal point that made you transition from an engineering mindset into wanting or was it always inherent that you wanted to be a business professional leading?
Roger:a company. I guess I've always had that mindset growing up that I wanted to be a business professional. Engineering was something my father guided me towards doing. It wasn't my first choice. I wanted to just go away straight and study business studies. And he says, well, you could do an MBA later. You don't need to do a BBA, let's learn something really hard and good. So I said okay. So I listened to him and did engineering. But I think engineering is all about the mindset, right, it really teaches your logical mindset, which is super important, and I think my whole team underneath me are all engineers. So I guess we all gravitate together in the way we think.
Gautham:It's funny you say this because you know, as an engineer, I too did not really want to be an engineer. I always wanted to be a marketing professional, but, coming from India, you've got to try being an engineer first, so I get that. I want to ask one more question before I turn it back to Rich. I was looking at your resume and it's interesting that you know. I think around 2010 or something is when Tal Group published their first sustainability report. Now I'm a sustainability researcher myself 2010, sustainability was not very popular, especially around the world, let alone in developing countries. So what made you lead that initiative? What got you thinking about sustainability and doing good for the planet, especially given clothing does have a big role to play in the environmental status as it is?
Roger:today. I'm not going to take any credit here. I joined a company. I joined in 2005 and the company DNA, when I joined already, was trying to do good for the environment. So if I go back to before that, in the 1990s, we opened a factory in China and we discharged, we use water in our processing and we built a wastewater treatment China and we discharged, we use water in our processing and we built a wastewater treatment plant from day one. So we were treating water in the 1990s when no one else was right, it wasn't a thing. I calculated, added a dollar per piece. For people outside industry a dollar is not much, but people inside industry a dollar is a hell of a lot of money. Okay, but the cost per piece at that time was a dollar extra to process the water. It's inbuilt to the company DNA before I arrived it's about, you know leaving the place in a better state than when you first arrived.
Gautham:So I have to ask you this, roger, sorry I have to interrupt Now. That's very unusual that a company, especially a manufacturing company, has that in the DNA in the 1990s. So what was it that caused the company to be so environmentally focused, investing? I mean, we are talking about pennies, you're talking about a dollar, right, that's a lot of money that impacts the margins. So give us a little bit of the background of what drove the company to be so sustainability oriented, even that in the 1990s you know, I wasn't there oriented even that in the 1990s.
Roger:You know I wasn't there, obviously at that time. But what I can tell you is when I joined, my father was the CEO, dr Harry Lee. He came in and started running the company, I think in 1983. And if you know him you know that he's very principled and extremely clean with every part of the business, right no shortcuts, no under table money, just everything's by the book. And he's also a scientist, right, and he understands what wastewater can do to environment. So he's always been in every aspect of the company driving sustainability, whether it's taking care of the workers or taking care of the environment. That was really driven by him. Now he took over in 1983, the company started in 1947. So I don't know between 1947 and 1983, whatever was already drilled in or he started that.
Rich:He definitely cleaned up a lot of minutes and talk about the businesses that you're in and what your major I'd say sources of revenue or your major business objective is?
Roger:I guess it goes back to our core, which is manufacturing. I'll give you a quick background that people probably don't know. We started in 1947. We started actually as a fabric mill. So in our industry you've got fabric mills that you knit or weave. Then you buy the fabric, cut it and sew it and then you ship it. So that's the garment manufacturing part.
Roger:We actually are today garment manufacturer, but we started in the fabric mill in 1947 in Hong Kong and we grew and then we had garment manufacturing. We actually started making everything else around the garment, which is buttons, thread, the potty bags, the boxes. At one point we even owned shares in air cargo, because he did a lot of air cargo back in the days. So we had like a hundred different companies and in 1970s we ran into a financial difficulty when oil crisis came and we basically, long story short, we diversified everything and then we just kept the garment manufacturing and that's where my father took over 1983 and started. Just kept the garment manufacturing piece and that's where my father took over in 1983 and started just with the garment manufacturing piece. Everything else was diversified out for us to survive financially. So today we're known as one of the bigger garment manufacturers in the world. We're definitely not the biggest, but one of the bigger. We have been known up to recently as probably one of the biggest dress shirt makers. Up to recently as probably one of the biggest dress shirt makers we make. The last numbers we looked at was one out of every six dress shirts sold in the US is made by us Dress shirts that retail for over $50,. 60% of those are made by us. So we focus on more the mid to upper end of the market.
Roger:In 2011, I restructured the company to move the dress shirts into one of the divisions and we actually have four divisions, and actually the bigger division during COVID was our casual side, so we also manufacture polo shirts. So I think we make for 17 golf brands today and we do hoodies. We do a lot of casual wear. The third division we do is outerwear. So we used to be huge in doing outerwear in the seventies and eighties. It's a lot smaller now and in the fourth division is made to measure.
Roger:We do one piece at a time. We custom make one piece at the time in the production line, which is very unusual for our industry. Right, you're talking about typically, you want the bigger orders. You want 10 000 pieces in order. You want 20 000, 100 000 pieces, but we also make one piece at a time and we're pretty big in that now too. So we're really a manufacturer. We buy the gun, we buy the fabric, we cut it, make it according to the specs and then we ship it. So we're known as as uh, one of the bigger manufacturers, probably also known as one of the most expensive manufacturers, because we do things to the best of our ability and we don't take shortcuts and you know, a lot of processes in place and that costs money. So we're not cheap in what we do, but we're super reliable. So that's our main business.
Roger:Over the years we've added auxiliary businesses around it. A lot of it's around make to measure. So in order for you to custom make clothing, you need to have measurements. So there are many different ways to take measurements, but the most accurate way is not going to a tailor, because if you go to 10 tailors they give you 10 different measurements. It's not as simple as people think in taking measurements.
Roger:So we have a computer vision software company and hardware company that creates 3D body scanning. It used to be a booth, used to be a physical booth. You walk in and then you scan. Now it's an app on the phone that you can use. The lenses on the phones have improved so much we can just use that. So we have a company doing that.
Roger:We have another brand actually that sells. It's called Jay Hoban. It's it's got a stylist around the country that come to you and they come and measure you or use the app to take measurements, and then the biggest part is these stylists know your wardrobe inside out, and men hate choosing how to style what to wear. What color Should I have a pocket, not have a pocket? What should the color of the buttons be? These stylists take the thinking out of that and help you dress yourself in a way that shows your character. Where you want to be quiet or a little bit loud Takes all the guesswork and thinking out of that, and so we have a company that sells men's custom clothing as well. So we've added small businesses around our core, which is still the traditional garment manufacturing.
Gautham:Roger, can I ask? I'm a technology geek, so can I just ask a little bit more about the body scanning and the efficacy of it, and what are the challenges that you face, both from a technology side and a customer adoption side? And lastly, the unit economics? I'm not. How does this work Like? Are you, if you're able to speak about the last one as well?
Roger:Back in the day. So we started doing made to measure before I joined, so this is a while back, I think it's early 2000. So I joined 2005. I think 2002, we started doing that and at that time we expected that made to measure was the way that consumers will buy clothes in the future for many, many different reasons. And we said what is the tech around that that you need? And we said measurement is obviously one of the key things. And how are you going to do that? And we felt that we had to scan the body because tailors we know, just have different ways of measuring. And we also felt at that time that if the more data you had this is before today, where we all know data is super important the more data you have, the better informed your decisions are and the more data mining and stuff you can get out of there. This is back in early 2000, right? No one talked about data science or anything like that, but we felt that the more body measurements we had, the better our ability to fit consumers was going to be.
Roger:And at that time the closest thing you had was, I think TC Squared was an organization that had 10,000 body scans or measurements, and everyone in the industry was using that and we're like, wow, we can do a lot better than that. We actually can. People, which is simple in and out scan, then the next one. So we created this company called sidestream, out of north carolina, that focus on that tactic. Basically, I think it's uh, the use case is hard sometimes. Ultimately it's not like tsa you walk through a scan and can get measurement because you do. I think most people don't know that when you actually measure someone, you need to get down to an eighth of an inch is what the tolerance is in making clothes. So that's part of the tech. Now, if you're asking about made to measure, we've been in this for over 20 years. The stats I can share is in terms of shirts, dress shirts, for example, woven dress shirts we make over 600,000 pieces a year. When you add in polo shirts, pants, outerwear, suits, our units are almost close to a million units.
Roger:It's an area where most manufacturers try and don't succeed, because you need a lot of perseverance. You need to innovate in how you change styles, because the sewing machine is set up one way and every product requires a different setup. So how do you do quick change? So basically, we've spent years and just thinking about the whole process and if you're a geek like me knows you know, in the factory you will start really thinking about how's the factory working.
Roger:You know, hey, in bulk is very simple. Traditional manufacturing simple. You take a whole roll fabric, take it to the cutting table, cut the whole roll and then you're done In the made-to-measure. You take a big roll of fabric. You only cut what you need, which is typically two yards, and then you send the whole roll back to the warehouse. Just that logistical change is super inefficient if you use the traditional way. So there's so many ways to do this and we've been doing it for a long time we haven't talked about it until recently because I think we're far enough ahead of everyone else in the world in how we do this that it'll take a while for people to catch up to what we're doing.
Rich:So I don't mind sharing what we're doing today From body scanning and the sheer number of measurements that you've taken. Has that impacted your ready-to-wear business and how you look at size scales and sizing in general?
Roger:So doing made-to-measure making clothes one piece at a time has not impacted in terms of our ready-to-wear business, in terms of volume. The brands that really succeed in made-to-measure are not traditional brands, and that's down to pure economics. Traditional brands are set up with big retail stores, a huge warehouse distribution network. Most often it's unionized, so it's expensive. And when a traditional business says I want you to do made to measure, you still have to pay for all the overhead. Your warehouse, your retail store that normally stores are actually mini warehouses right, you have a lot of stock inside. When you do made to measure, you have no stock. You don't need a warehouse because nothing is stored in the United States. Everything is made in the factory on demand and sent over as needed. So if you take all that cost out, it's actually a huge saving. So traditional manufacturers, when they do traditional P&L, can't make it work. So the ones that are making it work today are the ones that started from scratch at work today, are the ones that started from scratch, doesn't have any of that legacy network costs and are really successful.
Roger:And are those brands taking business away from traditional? Not yet. It's not at the scale yet that it needs to, because the biggest barrier is most men don't think about buying custom right. They think custom is out of reach, cost-wise and it's not easily accessible. I truly believe that custom will be the first choice of any consumer in the future, once it gets to scale. And I do want the traditional retailers to go and do make to measure. I want them to be successful because the more people do it, the more consumers will start thinking, oh, maybe I should look at custom first before going to a traditional place, so that tipping point will come. The question is just in which years are going to come. This is fascinating.
Gautham:So you believe that made to order is going to be the future? How do you dovetail it with the need for people to have the clothing in their hand yesterday, because I'm assuming this is going to take a little bit longer? Right, I see the positives. You're saving the environment. There's a lot of cost savings there as well. But how do you get the speed to get it into the hands of the customer that a traditional, larger scale manufacturing can achieve?
Roger:I think Amazon with its two-day shipping, next-day shipping, has changed a lot of consumer expectations. But when you go and get something custom made, if I can get it to you in the next hour something complex, not something simple, right? I'm not talking about taking a mug and putting a logo on it, something a lot more complex. Do you think a lot of work has been done to customize it for you? If you get it an hour versus in three days? You know we talked about suits, some brands saying, hey, if I get my suit too quick to the customer, they think I didn't really do anything special to it. How can it be so fast? So when it comes to custom, actually all consumers are pretty okay to wait. Now, our lead time is pretty short I think one of the shortest in industry. We can get pretty much 100% of our shirts out within three to four working days. Three to four Wow. Now, if we got consistent volume every day, if you got a thousand pieces every day, I can get out in one day. The reason why it takes longer is that we can't staff the sewing lines to its peak, because if I get 2,000 today and 1,000 tomorrow, what do I do with half my sewers, so we staff it to roughly the upper quartile of need. In actual fact, to get a product out, we can do it in a day. If we have consistent volume to match the capacity For suits, we get it out in two weeks.
Roger:The fallacy of the whole thing is that we definitely save retailers in the environment from the point of view that you don't need warehouse. Transportation is a lot less. The return rate is actually a lot lower once you get it right the first time. You don't have the 30 plus percent typical retail return rate. You have single digit return rate because you really have to fit right and they choose what they want, they choose the color, they want style. So it's super rare to get return once you have it right the first time. After the first time, your actual footprint, environmental footprint, is quite low. The only thing that drives it up is the effort that we have to do to cut down the 30-day lead time, to make it down to a three or four-day lead time. Now, once we get our model perfected, we can actually move it closer to onshore, closer to the customer, because we're still working automation. We're working a lot of things.
Roger:Us is not great if you want to set up a 4,000, 5,000 people factory in one location, and also eventually we'll get there into many factories that do it on demand. But if you think about the amount of waste that a brand goes through right Every season, why is there a discount every season? Because they got stuff they can't sell so they'd have to discount it, and all that is waste and it's unnecessary waste, because people are just buying because it's cheap, not because they need it, whereas in made-to-measure you're only selling people what they really want and there's rarely any discount in the season because there's no, you've got nothing to discount in the US. The worst case is you've bought some fabric that's not been made yet in a factory that someone else can buy off you and reuse. So you know there's still a debate which one's more environmental friendly. But I would say long-term terms of cutting waste out made to measure is the way to go.
Roger:Number one.
Roger:Number two Rich.
Roger:I'm not sure if you've done a podcast in startup businesses, right? Most people say, hey, I started a business. It's growing 100% a year. I say that's great. Where's your money coming from? What do you mean money? I'm making money.
Roger:I said if you double your business every year the working capital you need, because you buy the goods from the supplier, you pay the supply before you sell it to the consumer, so your working capital just gets bigger and bigger.
Roger:So if you don't have, you may have a magical product, but if you don't have the working capital to support it, you can never grow. You're going to get into financial trouble and eventually they do Once they feel like, oh yeah, that's true, I never thought about that. In the made to measure business you take the money from the consumer first it's positive working capital before you pay the supplier. You take the money when you take the order and then you place the order and it's made on demand, so it's a. You know you always want to invest in businesses that are positive cash flow, not negative cash right, positive working capital, so it's negative. So this whole, the whole economics works if you really think for it no end of season discounts, no huge retail warehouse networks, no overhead costs and you get the money before you pay the supplier. It works if you really think through it.
Rich:Are there lessons that you've learned either from a technology or manufacturing process in the custom world that you've been able to leverage into your ready to wear world?
Roger:Yes, for sure, In manufacturing you lose the most efficiency when you change styles. Okay, so you're manufacturing at 80% efficiency and then a new style comes, everything is retweaked and then efficiency drops down to 20 and the name of the game is how fast can I get it back to 80. In made to measure, we change style every minute. Right, Every product coming out is different. So we've done a lot of I don't know you call it, you know changes to the setup, the machinery, the thinking of how we do things so that we can change style without losing a lot of efficiency. And made to measure. Well, so we adopt some of those for sure back into the ready-to-wear manufacturing process so that we can change style faster and have less efficiency loss.
Rich:So I have to ask the question. I tuned in the other night to a Netflix documentary on overconsumption and I was surprised that the CEO of a leading manufacturer was addressing overconsumption. What was your thought process behind that?
Roger:It wasn't very complicated. The production house approached me and said are you interested in doing something like this? We want to talk about waste in the industry not just our industry, in multiple industries, and I was, like sure, happy to contribute because we've been talking about waste in our industry for a very long time. We've been talking about the 1.5 degrees, about all the metrics we want to hit as an industry. We haven't hit any single metric that we as an industry want to hit.
Roger:Change is very slow in our industry and people will say, well, isn't that going to hurt your business? By speaking out, no, we all know what the reality is and I'm just speaking the truth and our customers understand that it is the truth. They still need a reliable manufacturer that can produce high quality work. They're not going to leave us. Because I speak out and I felt the more that consumers can know what really happens and over consumption and really think about it. That will be a step forward. It won't change the industry, but it'll be a step forward in making people think twice before buying stuff they don't really need.
Gautham:I love that point and I always use the word responsible consumption, and I teach marketing, but I teach my students think about responsible consumption and when it comes to clothing, you know students love to be fashion forward, so I always say high quality, repairable products with the least waste right, and it kind of aligns with what you're doing, roger. I want to ask one question, after which I promise I'll keep quiet, which is that I'm a sustainability researcher. Clothing, as you know, a paddle in general is a major contributor to the environmental crisis that we have. What kind of innovations are you dealing when it comes to being at the forefront of making this a more sustainable reducing waste, for sure, water recycling. Is there anything else that you're doing that you are willing to share with us?
Roger:I think it's nothing where you haven't heard of before. We started, as you said, producing the sustainability report in 2010, but we actually started internally on reduction of water and energy in 2007. So we had set ourselves internal targets in 2007. We started when we built our factory after. The next factory that we built after that was in Vietnam. We decided to adopt the US LEED lead US Building Council's standard of building factories and in Vietnam our two factories we have today are both LEED Gold certified and the first one that was LEED Gold certified was the highest rated factory in the whole of Vietnam at that time.
Roger:So we've always set ourselves standards on how to measure ourselves, to see whether we're actually making an impact. So we did simple things like that low-hanging fruits and that just you know we reduced waste. So lunchtime we turn off machines, we look at do we actually need lighting everywhere? You know lots of things. And then we started measuring the power that the sewing machine uses and can we get more efficient sewing machines and that kind of thing. So we started looking at that a long time ago.
Roger:The other thing at that time that we looked at was solar panels traditional solar panels. It didn't make sense. The payback period was 20 years at that time. Now it's a lot shorter, so it makes sense now. Water consumption is a lot shorter, so it makes sense now. Water consumption is a big thing, so we've looked at technology to use less water in our processing. So nothing really that you haven't heard of before. The real thing is focus and determination to make a goal. So we actually have put out our neck out there by committing to carbon neutral by 2050 and we joined we're one of the few people that have joined the UN fashion charter to commit to that and actually the more midterm, short-term goes 2030, we need to reduce by roughly 50%. That's how, because there isn't enough technology out there to help us get there yet, which is why I'm smiling.
Gautham:Yeah, that was very hard, ambitious goal. I love that. I know I said last question, but I got to have one more follow-up question. Saving the planet, doing good for the planet, requires collaborative effort, right? You're a manufacturer. If you look further upstream, how do you look at suppliers to you? Are you trying to influence them, are you trying to ensure the sourcing is correct and so forth? How do you deal with that? Like, the traceability of these supply chains is really hard, right?
Roger:Definitely very hard. I mean, we have over a thousand suppliers, it's complex.
Gautham:Sorry to ask you there, but the suppliers, are they from around the world or are they more?
Roger:From Asia, mainly from Asia, some from Europe, but mainly from Asia. We just don't. We simply don't have the manpower to go and patrol everything. We're getting better. I think brands are getting better, we're getting better.
Roger:And saying to the suppliers because the focus has always been on us, the garment manufacturer, not on the upstream in terms of the raw material suppliers, the person who makes the fabric, the buttons, the thread no one's really focused on that. But actually there's a lot of energy being used there. Even growing the cotton, there's a lot of water. So it's finally come to this and it's what you call scope one, two, three. So we're now looking at a broader perspective, not just within our four walls. We're looking at upstream.
Roger:So I think the measurements are coming in place. The regulations, the brand setting, standards are coming into place. So, yeah, it's super difficult because there's too many suppliers, there are too many components that make a garment. People don't realize that there's a lot of components that make a garment, so it is hard to patrol, the cost is super high, so it's not affordable to manage. But I think rules are getting in place, standards are putting in place, so it will get better. I would say the biggest driver to change at this point is going to have to be regulation. When governments set regulation, it will level the playing field for all manufacturers and we just have to do it. We've always been doing ahead of everyone else, but we don't get recognized from that point of view.
Gautham:You're talking about cross-border regulation that is mind-bogglingly challenging to get through, and then, of course, enforcement becomes an equally tough challenge. I mean, sustainability is a hot space for me, so thank you for sharing your perspective.
Rich:So at some point in the podcast we will often ask you to think about a moment of failure. I actually I'll leave that question out there, but I'm going to start with over the tenure of being CEO of Tal. What's the one thing you're most proud of? I think it's on the people side.
Roger:When I joined the organization, we were known for our product, our technical processes, our quality, but we had no focus. We didn't really focus on people, in that we weren't developing next generation. We didn't have a systematic way. We had leaders in place that grew up in a single function so either manufacturing the whole life or sales the whole life, and didn't really know other parts of the business. So I think the biggest impact that I've made is changing the culture of the people in terms of how they think. Every time we think about not just their function. It's how to think holistically, and in order to do that, it takes many, many years of education, upgrading, both bringing in people from outside who have different experiences, and also promoting people who move in. So I would say my job today is 10 times or even 100 times easier because the team below is far more competent than the team I had below 10 years ago and I took over 12, 13 years ago now running the company. So at that time it was just a lot of work on giving directions, so very directive type of leadership. To now, where I don't have to be directive 99% of the time, it was only that 1% of the time I jump in and I see that hey, we're going off track. Then I pull them back. The teams below me, the presidents of organizations, the COO, really work well together, to the point that customers see it so.
Roger:Normally when you go into a traditional manufacturer you always meet the same one guy all the time. He talks, all the time. He tells you everything. He'll tell the factory is super directive. That's how they do it.
Roger:But the generations are getting older and the brands are thinking what happens if this guy retires tomorrow or something happens to his health? We are risk mitigating. We don't have any risk mitigation. Whereas retires tomorrow or something happens to his health, we are risk mitigating. We have, we don't have any risk mitigation. Whereas when it comes to our factories, the people that they talk to are multiple levels and multiple different people. So they know that if something happens to one person, including myself, they can still do business with us. There's no risk.
Roger:So I think customers actually saying we need to move to town, or actually part of the business to town because the people working with, is not sustainable. It's too much risk in eggs in one basket. They rely on one person and if something happens we're in deep trouble. So I think it's really stood the test of time is our people. How we've grown. Our people empower our people got them to think a lot, a lot broader, a lot deeper, and customers see that too and appreciate that. It's allowed us to move forward faster, because even though you might be one of the leaders in the industry, if you don't continue to innovate and improve yourself, you won't be the leader in the future. So how do you do? That is having the best people.
Rich:So it's interesting that you bring that up, because we obviously spend a lot of time on the podcast talking about technology, whether it's AI, or whether it's automation or technology in general. One of our primary audiences, or students. They will ask the same question what's going to happen to the jobs with technology and automation? The jobs aren't going to be there. And we've spent time talking about technology and automation and now you're talking about people. How important do people become as we look five, 10 years down the road?
Roger:I think it's equally important as today. No change. People have said the same thing. Right, ai, I know, is a huge change for everyone in every industry. So was Excel. When Excel started, everything was manly done in the books and Excel came and said oh my God, my job's disappearing. And then you can repeat that example many, many times where people thought their jobs are disappearing because technology takes over and makes things a lot more efficient. You don't need people, including automation right, a lot of industries have automation, but you still need people.
Roger:There is one scary fact that I understand is that the AIs, the computers that are coming up, are going to be smarter than people for the first time. That's the scary part. But people are still going to innovate. We're super smart as human beings to figure out what we can do. It just accelerates the progress of every industry. But AI is just a tool, and what are we going to do as humans to use those tools to the most efficient way? And I'm not worried about human beings losing jobs. The one thing I would say is the hardest part of leadership is not creating a strategy. People think, oh my God, they create this strategy. It's amazing. It's super complex, all that stuff you can have the best strategy in the world, but if you don't have the people to execute it, what's the point? It's not. The most complex thing in leadership is managing people. That's the hardest thing. It takes the longest time to learn. Everyone's different, so you can't use one strategy to manage the team.
Gautham:I love that. As a professor, I've been teaching analytics and technology for 10 years. I always say that it always boils down to people and leadership. In our podcast, we have a third section, which is about advice. Right, you hopped on the idea of importance of people and you talked about how long it took you to build the team that you wanted. What is it that you look for in people? Give our audience some insights into what are the underrated skills that you want to see in your team members.
Roger:It's pretty simple for me Curiosity Is someone curious about everything around them, because it doesn't matter how old you are, whether you're a teenager, whether you're in your 30s, whether you're in your 80s. If you have the innate curiosity in you, you're willing to learn, you're willing to know more, you want to know more. You only get better with knowledge. So if people are curious, naturally they will do better in life. People who are content and don't feel like they don't need to learn Okay, there's some bosses out there. I know everything in the world. Why do I need to learn? They're going to be stagnant at some point and something's going to catch up, so it doesn't matter what level you are. Curiosity, to me, is one of the most important things that's never really talked about.
Gautham:In fact, it's talked about a lot in this podcast. I was just texting with Rich saying that that's the number one thing that we've said, and as a professor, I also let me ask you this like in a world where things change very fast, where instant gratification is kind of the norm, how do you inspire? I heard you kind of talk about curiosity as a trait. You either have it or you don't. Is there some way we can inculcate curiosity into our generations, especially given all the technological tools we're going to have moving?
Roger:forward. So I've got three young kids, 12 to 18. They're very much social media focused. They learn everything from social media. So in some ways they're curious about the world by learning. You have to be curious about every aspect of the world, not just what's on social media. So then it applies to work. So it's something we have to teach them. To say you're curious in the social media, you learn a lot, which is great. Are you learning about other aspects of your daily life, like you're taking Uber every day? How does Uber work? Do you ever thought about that? You thought do you think it just magically happens? It doesn't. And if you start thinking about how Uber works, you're going to think about hmm, actually, you know, what really bugs me about Uber is that I can't get a reliable car, or I can't get reliable this, I can't really reliable that. Then you start and if you start thinking about, you're curious about how it works and you're curious about can I do a better job? That's how you get better than anyone else is you keep thinking through those things.
Rich:So obviously encouraging students today to be curious and to understand how things work would be important. What advice were you given that stuck with you?
Roger:So I still remember to this day that my father was reading Business Week magazine and he said read this article. I said OK, and it was on Amazon, the warehouse they're setting up. How many warehouses are setting up across the US? So I read it and it says what do you think? I cannot remember what I said to him. The only thing I remember was that, no, you don't get the long term vision of what they're trying to do, because I looked at a very short-term narrow, just based on the facts, without really thinking about what's the long-term implication of that. And that still stuck to me was hmm, I thought I was semi-smart, I thought I could get it, but obviously I completely missed it. So that taught me a lesson that I really need to think a lot broader and deeper and ask more questions and really challenge my own thinking when I'm absorbing stuff, reading stuff. I think that was about 25 to 30 years ago. This is an infancy of Amazon.
Rich:So, before we move into the rapid fire round, where do you find your inspiration personally?
Roger:I guess through work, if I get bored at something, I really get bored, and then I try and figure out who else in the company can do it, because when I'm bored it's no good, I can't move things forward, and I think all of us have gotten through stages where you get bored in certain things. I have the luxury of being a CEO, so if I'm really bored with something, I'll find someone on my team that can take it on for me, because it's hard to work on something that's boring. Now, not everyone has that luxury. Obviously, when you start off and I've been through the grind like everyone else I had to learn from the beginning and do the boring stuff, because that teaches you fundamentals and that's basics. That's different than being in my role, because as a CEO, you've always got to be inspired. You've got to think forward, you've got to think what's next To me inspiration comes with how do I make things better?
Gautham:So you said curiosity is a good trait to have, so Diversity is a good trait to have. And I just heard you say you think about what you can do better. So I have to ask this question but what is the one thing that you would like to do better today in the apparel?
Roger:industry. I mean, sustainability is number one. There's no close number two. We've got to fix our waste. We've got to fix the energy consumption. We've got a lot to fix. It's all around sustainability.
Roger:That, me, is number one that needs to change our industry. But if you allow me, I want to switch and go back to the example I talked about and share with you openly what we're doing. So every year we go to Harvard. It's interesting the courses that we take. The reason I like to go back every year is typically, if you do an OPM, apm course, you go three months intense. You learn whatever's current. We get to learn the current business cases, case studies every year.
Roger:So everything time it goes is mostly new stuff that's just published and obviously AI is one of the newest things. So they started challenging us three years ago how do you incorporate AI into your business? And then it was like there was a key question how are you going to change your industry using AI? And something just magically popped into my head. It used to be one hour for the whole week on AI. Then it became two hours, then it became three hours and then they taught us how to use different chat GPT tools. There are a few different tools out there to try and solve a question and taught us how to do that. So there's a lot of things. And then that one question is how do you use AI to change the industry? And I can share openly what we're doing right now. We're doing many things, but this one thing I really want to implement to change the industry, which is a very boring task but a necessary task it's inspection, quality inspection.
Roger:There are a lot of auditing firms out there that make billions in revenue in just doing third-party audits on manufacturers like us. I want to develop a computer vision tool for town to start with. And people say oh, you must be doing that to save money on number of QCs. You need right Quality inspectors you need. Answer is no for sure, because labor is cheap, relatively speaking, where we manufacture.
Roger:So it's not that it's I want to have, because I don't think people realize to inspect a dress shirt. People don't realize how many minutes it takes. They say I said how long? Oh, 30 seconds. Now, if you really inspect everything, it's three, four, five minutes and people miss things. Right, human beings are still using their eyes. They still miss things. So if you want to check an iPhone. I'm not an iPhone manufacturer. I'm guessing you will plug it into some sort of machine and run different algorithms, test different things, get the responses. It's not a human being looking at a phone itself and saying there's a past inspection. That's not how you inspect an iPhone.
Roger:But when you inspect a garment, that's how you inspect a garment. It's purely using human eyes and you're going to miss a lot of things and you don't have the time to inspect 100% of your garments. The customers don't pay us enough money to allow us time to inspect every single garment. We do 15 minute garments a year. Think about how many minutes times three minutes and how many minutes that will cost. We're not paid that. We're not paid enough to be able to do 100%. So we do a random inspection using an AKL algorithm. So if a camera can look at the product real time and tell you straight away where the defects are, that saves a lot of time.
Roger:Number one. Number two I can do it for 100 of diamonds. Number three I can provide that data transparently to the customer so they know the quality they're getting and they know what the final inspection was. I can show them early on inspection in the before end of the line. I can show them. End of the line I. I can do open box audits, which is common in our industry, random opening box.
Roger:I can do all that with a computer system that they know they trust it's real data, it's not tampered with, and then hopefully our customers will love that system, the data, and limit all the third-party inspections for us. And then they're going to say, can I use the same technology for my other suppliers? I'm going to say yeah, sure. I'm going to say yeah, sure, I'm not going to charge you guys, I'm going to try and get a third-party company to do it. I don't want to make money off this. What I want to do is I want to help the industry standardize on what is quality. That's my goal, using AI, using a tool that we can't do ourselves, but use computer vision. Ai can do.
Gautham:I love it. I can see a lot of things right. It also becomes a platform. I am going to ask one question on this. I've talked with quite a few people who implement computer vision. Clothing and computer vision isn't that harder to do, in contrast to cans in the grocery store.
Roger:Absolutely Much harder, but I think the technology is getting much better. The algorithms are getting better. Capturing the images is one of the things. The lenses are getting a lot better, a lot cheaper. We've now got two different companies outside companies running their system in our factory to test. So, basically, what's happening in the AI industry is there's a lot of companies using AI. What, fundamentally, what raw material do these companies need to make their product better? Is data. So we're opening up our data set, which is our garments, to them to use their technology in our factory, to give them, for free, our data set to test and make their products better. I have two, maybe I have three companies. I want it to be a two horse, three horse race. I want the best product to come out, so I'm giving them data.
Rich:That's one of the big things AI companies don't have the access to industry specificspecific data and we're opening that up to AI companies to use and once we can marry it together, it will. Are you employing it simply because you're trying to cut costs and be the cheapest, or are you employing the technology to improve quality, improve transparency? One probably will cost jobs and probably will cost your brand, and the other actually can produce a better product and likely save or create jobs in the process.
Roger:So if we can force the industry to create a better product, the product should also be more sustainable, more durable.
Rich:We rapid fire round. We have three questions. I'm going to start, gotham will jump in the middle and then either give you the third or I'll jump in with the third. You're hosting a dinner party. You can invite three guests. It can be living, dead, real, fictitious. Who are they?
Roger:So my three, maybe one or two, I don't know what people will think, but I'll tell you what I honestly think Off the top of my head. Bill Clinton I've met him once briefly, for like three minutes. He's super engaging, really interested in what you're talking about and will tell you how he thinks and mean and he has a lot of experience, right and from different aspects of his life. I know he won't sugarcoat things, he would tell it as it is and he's just engaging. He really cares about your questions. Number two would be Steve Jobs. I admire the simplicity of his products. I think everything that we use in the world should be easier to use, simpler to use, and he was able to figure out what we needed before we felt we needed it. Typically, people think about oh, how do we make this product better? Oh, what's the consumer asking for? He wasn't.
Roger:He was way ahead of what the consumer was asking for and just to pick his brain about how he thinks about things will, I think, help a lot. Brain about how he thinks about things will, I think, help a lot. If more people like him, we would create products a lot better and faster than today. The third one you guys may laugh at this Taylor Swift. I attended her concert with my daughters because my daughters wanted to go see her in Singapore. She was here for six nights.
Roger:It wasn't about her music, it was about the show she put on and she, as far as I know, has sold over a billion dollars in tickets. It's a billion dollar company. How did she create this? How do you create something from nothing? I mean, obviously she had a fan base, but how do you create this big thing suddenly to a billion plus dollars in ticket sales, which is a billion dollar company and get everything to work?
Roger:It's a three-hour concert, right? Most concerts are nowhere near three hours and you go out at the end of three hours and don't think it's three hours. You're captivated every moment of the concert. So how do you get the crew to think about the script? How do you put it all together? I mean, it's running a billion dollar business and at her age she's pretty young. She probably has a big support team behind her. I know her parents play a big role, but still putting it all together it's not an easy thing to do. So it's just curious, right? It's a completely different industry and she's made it big. And how did she make it big? I don't think it's just from her songs.
Rich:She's built a community and the irony with what we've been talking about today is she puts quality behind it and she invests in the community and in the people that support her.
Roger:So it kind of aligns with the same values that you've been talking about, but I'm not part of her community and I'm still interested in attending her concert, right, I mean, and I'm way older than her target audience. But I just wanted to see what the whole thing was about and it exceeded my expectations.
Gautham:I had to close the door so that my daughter and wife did not hear that you heard Taylor Swift concert, but no, it's hard act to follow, roger. But I'm gonna ask you the next question. I'm a foodie, so what's your go-to meal? What's your favorite meal?
Roger:Okay, my go-to food is chocolate. I love dark chocolate. Okay, love, love, love dark chocolate, but that doesn't help with my weight control. My favorite meal probably Japanese. I like Japanese food in general it's healthy, it's clean, it's tasty, simple, fresh ingredients. So that would be probably my go-to cuisine.
Rich:All right, so I will close it out. You've traveled quite a bit. You have the ability to transport yourself instantaneously to anywhere in the world for 24 hours. Where are you going?
Roger:As you said, I've managed to travel the world. It's a hard question to pick one place. I would choose somewhere where it just takes a long time to get to, because it just takes so long. It takes more than 24 hours to get to some places. Right, I've been to Antarctica hard to get to, just amazing nature. So I would think everything comes down to nature.
Roger:I really appreciate pure nature where no human has interrupted it or man-made things. That just changes the way it is. So Antarctica, to see the raw nature. I just came back from Finland where we saw northern mites, but it's hit and miss. So if I can find a spot as north as possible to go see northern mites, but it's hit and miss, so if I can find a spot as north as possible to go see northern mites. So you know just now, it's much easier than traveling, hoping one night you'll see it. Or to someone that bora bora, who I've never been because it's too hard to get to. So I would just choose somewhere that's super hard to get to. It opens up your mind. It's kind of like meditation, you know. You think about the wonders of the nature and just meditates in mind and brings it down to a peaceful level. So any of those places I would say I will be really happy to be transported to.
Rich:It is a very logical and inspirational perspective to have on travel, and I can attest to the Northern Lights. My wife and I went to Iceland and took a couple of trips to try and find the elusive Northern Lights. We ended up seeing them on the plane. Roger, thank you very much for joining us today. This has been a fantastic conversation. I can't wait to share it with our audience. We hope to have you back. Maybe do a round table on sustainability, as this is a topic that's come up several times, and I think Gautham it'll keep coming up and it should keep coming up. So, thank you, thank you very much.
Roger:Appreciate it, Thank you very much, appreciate it.
