How a Midsize Textile Maker Uses Technology to Compete Globally

The textile manufacturing industry shipped out a generation ago. But a midsize North Carolina company uses IT to bring home the profits of globalization.

After the Civil War, when John Q. Gant came home to central North Carolina, he took a job at a cotton mill in Altamahaw. Throughout the 1870s, he bought up shares of the mill, and by 1880 he owned it. Facing stiff competition from the mills up North, Gant invested heavily in the one thing many of his Southern counterparts had largely ignored: the best, most cutting-edge technology on the market. In the late 19th century, the company—today called Glen Raven and headquartered a few miles south, in Burlington, N.C.—became one of the first Southern mills to dye fabrics (most others sent their cotton up North).

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In the 1930s, Glen Raven started using synthetic fibers and began knitting operations, which eventually led the company to invent panty hose in 1959. The company has never been content with standing still, either. Today, it claims to hold significant market share with its durable Sunbrella fabric, which is used for restaurant awnings and outdoor furniture. The private company has flourished globally even as North American textile manufacturers—in competition with Asia for a generation—have largely fallen off the map.

About Glen Raven

Headquarters: Burlington, N.C.

Primary business: Textile manufacturing

Employees: 2,800

IT executive: John Duncan, VP, corporate information services

IT employees: 25

Key technology vendors: Jomar, Oracle

Today, John’s grandson, Glen Raven CEO Allen Gant Jr., 59, continues to apply his grandfather’s philosophy for success: Invest in technology, profit from it, then reinvest in more technology. Only now, IT is just as critical, if not more so, than the latest manufacturing equipment. The strategy is paying off for this mid-market company (which does not disclose its revenue). Glen Raven now sells products in 121 countries and has 2,800 employees.

Gant talked with CIO Associate Staff Writer C.G. Lynch about how IT gives Glen Raven a competitive advantage.

CIO: Glen Raven has not only survived the migration of the textile industry away from the United States, you’ve been able to expand globally. How has IT enabled this growth?

Allen Gant Jr.: As an international business, we have operations in Western Europe, Eastern Europe, the Americas and Asia. The coordination of those businesses would be virtually impossible without IT. For example, we have a China operation that runs 24/7. It’s a 190,000-square-foot facility in Suzhou that we opened in September of 2006. This facility is a marketing, sourcing, product development and manufacturing center for Glen Raven throughout Asia.

One of the plant’s roles is the manufacture of Sunbrella fabrics, which are supplied to casual furniture makers with operations in China. IT is able to keep it up and running on a real-time basis from right here in Burlington. We run a comprehensive enterprise resource planning tool that enables us to manage every aspect of our business—from ordering of fibers for manufacturing through shipment and billing to customers. This tool assures the information transparency that we must have to manage a global enterprise.

We operate an Oracle database with Jomar software. Every decision we make is based on information available through ERP. And we never dreamed of that five years ago, just never dreamed of it. So from a logistical standpoint, imagine the beauty of being able to look into an IT system and know exactly what’s coming off those production units all the time, how we can ship to customers, where we can source a product from. We satisfy customers with a matter of a click.

How do you know whether IT is truly aligned with your business?

I know that from when times are really difficult. If it’s crunch time, you have to produce or you’re going to lose the company. If you have a solid core in IT, which allows you to make the appropriate analysis very quickly, that’s when you realize just how valuable your IT really is to the company. We can make the right decisions to improve all aspects of our company. We can analyze our purchasing decisions, including cost and cost elements; we can look at the delivery systems for orders going to customers; and we can review credit approvals and billing to our customers.

With this information in hand, we have optimized control of inventories and purchasing strategies and we have improved on-time delivery to customers. This capability becomes increasingly important when you are running a global business. During times of prosperity, everybody forgets that it took a lot of hard work and tough times to bring you to these really great times. There have been times in the textile industry when the whole industry lost money—just like the airline industry was a year and a half ago. Having our IT aligned with the business allowed us to move forward quickly.

How do you decide which IT investments to make?

If it concerns innovation and new products and services for customers, then it gets a very high mark. If it’s to squeeze another penny out of operations, then that probably has a very low priority to us. Our company is certainly interested in operating efficiently and keeping our costs in line. For example, with the recent increases in natural gas prices, we have done extensive work to increase our energy efficiency. We have also developed a recycling system that finds new uses for much of our waste, such as converting textile wastes into insulation materials. Reducing costs, however, is only one part of the equation and not necessarily the most important part.

We have already reduced costs and automated virtually every function that can be automated. Our future growth and profitability, therefore, rests with innovative new products and services. We see so much more of an upside to inventing the next great fabric compared to savings achieved by sourcing less expensive supplies. As a privately held company, we have the ability to invest for the long term in products and markets where we see outstanding ROI potential.

Innovation is inherently risky. How do you make those risks acceptable?

We’ve never been greedy. We’ve never had to worry about what the stock market said tomorrow, what our shares sold for or what somebody else thought. We’re going to continue to invest in technology and innovation to make us the best there is. And you can’t compromise there. Once you start compromising, you’ve lost the battle. Think about the signal that you send to all of your employees.

The most important way to mitigate risks in IT is to screen your software vendors very carefully and work only with those companies that are financially strong with long track records of success. Second, it is essential to have a solid program of hardware backup and recovery capabilities. When we review proposed IT investments, our primary filters are information accountability and customer service. Do we actually need the information that we can create through a new investment, and will this information help us to serve our customers better? If both of these answers are “yes,” then the project will likely receive a green light. With the costs of hardware and software coming down each year, it is much easier to mitigate the risk of IT investments, particularly when you determine early on that an investment will enhance your customer service. By following these principles, the issue of acceptable risks in IT has not been an issue for us.

Does John Duncan, your vice president of corporate information services, report to you?

No. He works through our CFO.

Why not have the head of IT report to you directly?

We asked that question point-blank. And we’ve decided to have it the way it is because our particular CFO, Gary Smith, is so involved with the individual businesses. He’s not a bean counter. He is one of those rare financial experts with a deep appreciation for overall business strategy and our need to invest for the long term.

Gary has been with Glen Raven for about 10 years and participates in all key decisions. He works with the divisions on their needs and helps them understand the financial aspects of the business. Because he is so closely involved in the structure of the company, he helps ensure that we foster an environment in which it is easy for our associates to serve their customers. And so our IT guys say that they have exactly the right balance of people who are in favor of what they’re doing.

Copyright © 2007 IDG Communications, Inc.

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