Emma Palmér is the CEO of Fangsi, a Swedish owned company established in 2009. Fangsi is your helping hand in Asia and work with quality assurance, supply chain management and CSR (Corporate Social Responsibility) in the textile industry.
Fangsi has grown fast and can show an impressing list of clients, including well-known Swedish companies. Thanks to its presences in both China and Sweden, Fangsi maintains a close customer relationship and performs on-site visits in Asia. Let’s have a look at Emma has to say!
I’m quite sure that many readers want to know more about your background and why you started a branch in China. What was your previous profession and when did you decide to establish your company?
My co-founder and I decided to start Fangsi about a year after a Swedish textile company reached out to us due to their struggle with product quality and social compliance in China and India. We soon realised that many fashion and textile companies had similar issues with lacking transparency and the need for improvements in their supply chains, to achieve more efficient workflow and to reduce stakeholders’ concerns.
I was just finishing my MBA (Master of Business Administration) while living in Hawaii but instead of going back to stay in Sweden, I made a quick change from Far West to Far East. The mentioned textile company became our first client and our passion for helping textile and fashion companies to produce in Asia with minimum concerns grew with intensity.
Starting and developing Fangsi with consideration to the connection between product quality, restricted substances, social responsibility and sustainability was very natural for us.
Your company was established around five years ago and have presences in China and Sweden. How has the journey been since 2009?
It has been intense with a steady move forward, continuously heading towards our vision. Our belief is in interdependent relationships in the global textile supply chain, where smarter, transparent and sustainable processes are needed to help the industry take sustainable decisions already in the design and development phase. In 2012, we took a big step towards our vision by establishing a close collaboration with the Swiss based company Natific, who later acquired a majority share in Fangsi.
Previously, mainly big companies worked with CSR, but nowadays we see small-and medium sized companies who are engaged as well. Can you briefly describe how Fangsi works with CSR?
CSR can cover a wide span of areas and working with it can mean different things depending on whom you talk to. This is how we see it. If you are a textile company or fashion brand you are likely to have most of your production in low cost countries. Considering the people, raw material, chemicals, and water used in the production, the supply chain is likely the area where the company has the biggest impact.
Risks and opportunities are also anticipated and managed better with a continual focus on social and sustainable conditions in the supply chain. Not only speaking about the first tire, which still so often is the case, but also further down the chain where there are even more opportunities for improvements, such as sustainability like water efficiency and chemicals. This is also a good example where you will find a close connection to the quality of the finished product by working proactively.
No matter size of the company, the supply chain is our core focus for CSR. Our team will go on-site for audits to assess and train factories to ensure compliance. Not only being able to measure but also calculate resources to take sustainable decisions already in the development phase. That is truly fantastic.
The assessment is divided into two teams for the Social and the Sustainability sections. Due to the merge of Fangsi and Natific, we can now also start to avoid audit inflation on a larger scale. Duplications of audits have been going on for too long, with audits based on the same criteria and only slight variations in goals or tolerances.
To achieve the desired transparency in the supply chain, we are able to monitor ongoing compliance and sustainability performance of the suppliers and track these versus defined metrics, score versus peers, and trends of key metrics. Reflecting the improvements in efficiency and sustainability for separate facilities and the supply chain as a whole.
In 2010, I performed a quality inspection at a textile factory close to Shanghai. The factory produced suit bags and my job was to measure the suit bags and check for stains. Not a single person spoke English in the factory and it was hard for me to complete the inspection. How do you work in order to minimize obstacles like this when you visit factories? How long time does a factory inspection take in general and how is it performed?
What we continuously discuss internally is the importance of communicating well to get suppliers’ understanding that we are in the factory for everyone to benefit. For successful long-term collaborations in the supply chain and not only for single deliveries. A supplier does not always want to realise quality issues being found and it is a balance how to communicate this.
To show an example of different obstacles, it is usually not an issue when I as a Swede is in the factory but can be trickier for our local employees. Having a good relationship with the supplier will help you a lot during the inspection, such as moving boxes etcetera, making a huge difference in time spent in the factory.
It was important for us to have local employees from the start, to interlace our different cultures and minimize potential obstacles including the language. Equally important is it to from time to time work on-site as the cross-cultural team we are, with both Swedish and local staff. Often very appreciated by both the factory and our clients.
Depending on what is prepared when we arrive at the factory, what issues we find, type of discussions needed, where in production it is, order quantity, style to be inspected (a technical jacket versus a t-shirt) etcetera, we usually can do a proper inspection at about two styles in one man-day. A quality inspection can be performed in different stages throughout the production. If we come only for a Final Inspection, when everything is finished and packed, there is a risk that we will find issues which are too late to deal with, or that the time to meet the delivery date is running too tight.
Depending on the client and situation, we prefer to start already with a pre-production meeting, after client approved the sample but before the production starts, or after a first trial order is produced. By doing so, we can minimize possible issues prior to cutting and sewing. Thereafter, inline inspection(s) during the production is important to make sure that the production is running well, with enough time to correct anything that might need to be corrected, prevent potential later issues and keep track on production time.
Last, a final inspection when everything is ready and packed. The final inspection is carried out according to the well-recognized method called AQL. The sampling size (amount of pieces to be inspected) is determined according to the order quantity and the client’s required quality level is transformed to an accepted amount and type of defects to be found.
Despite the AQL method, which per se is not waterproof due to a variety of aspects, an inspection will always be subjective and also depend on the brands’ quality level. Working close with our clients to get to know their specific quality concerns and requirements is therefore important to us.
The textile industry is big in China and India and you perform factory inspections there. Can you share any remarkable differences in the way of working with textile production and quality assurance in these countries?
China and India are the top textile producers in the world, but they have developed quite differently, such as their organization of production procedures and technology. I came across a survey some time ago, saying that Chines textile workers average wage is higher than Indian workers’. However, Chinese factories are specialized in reducing costs through mass production and economy-of-scale to be very cost competitive.
In India, the majority of units are small operations (about less than 20 machines). The similar mentality of cutting cost corners is interesting though. A (too) low price will most likely come right back and bite you in the ass, at the same moment or when you least expect it. Having the eyes and gut feeling to recognise these tricks can be crucial, and cultural experience helps a lot.
The different developments have also fostered different productions and quality management styles. Many Chinese factories are working strictly with high efficiency and discipline (can be tracked back to China’s cultural background), easy to be connected to high quality. But considering China’s mass production, it is likely to also think of the opposite.
India has a larger share of small batches with customization, which also can be connected to high quality focus. Unfortunately it is not that easy. There are also external conditions such as the infrastructure and governmental strategies and policies, quite different in China compared to India, to take into consideration when working with textile production and quality assurance in different countries.
As China gets more and more expensive, the textile production is gradually moving to countries like Bangladesh, Vietnam and Cambodia. How will China’s future be when it comes to textile production? Do you plan to relocate your office to another country?
The textile industry has been chasing the ‘low cost needle’ for a long time but it will become more and more difficult due to the global economy, rising costs, demand for fast fashion and at the same time an increasing requirement to deliver environmentally friendly production. Bangladesh, Vietnam and Cambodia etcetera as you mention are not able to swallow a large textile production like the one China operates, and they compete on different grounds with various expertise and experiences.
We will also see Africa as the continent to further explore, with its own specific competitive edge. The textile production in China is changing and moving also within China. I believe China will continue the development in textile production with new organizational structures and more advanced production, including an increasing awareness and actions towards sustainability. While hoping that new developing areas will have the possibility to start up with a higher lowest level regarding social and sustainable conditions in comparison to what most existing low cost production countries had.
Due to the nomad attitude in the industry, we have had an open and flexible mindset considering our location already from the start. The textile supply chain is global and in my eyes, China will remain a large player in the textile world for many years to come and Shanghai is and will continue to be a good hub also in other Asian countries.
If the future would require a local office also elsewhere, we would welcome that expansion. Unfortunately, due to the conditions in the world, it is not appropriate to send any nationality everywhere, however we also see the advantages of traveling with abroad expertise.
A final question: Where do you see yourself and Fangsi in five to ten years?
Considering the timing of your question, let’s just say that our vision as mentioned briefly in the beginning is getting closer. If the industry is ready, it will have a tremendous global effect. I see myself right in it.