Edwin Keh’s lectures are always among the most anticipated of the Hong Kong seminar. As the CEO of the Hong Kong Research Institute of Textile and Apparel, he works with business leaders and academic researchers to develop technology for Hong Kong’s competitive and creative apparel industries. Edwin is also a lecturer at the University of Pennsylvania’s Wharton School, where he teaches the Global Supply Chain Management in China course, with Marshall Fisher, author of The New Science of Retailing: How Analytics are Transforming the Supply Chain and Improving Performance.
He knows a lot about sourcing and logistics. Until 2010, Edwin was chief operating officer and senior vice president of Wal-Mart Global Procurement, and prior to that, held executive positions for Payless Shoesource International, Donna Karan International, Country Road, and Abercrombie & Fitch. He remains active in charities and advises social enterprises.
Edwin’s lecture is profoundly optimistic, but not maudlin; pragmatic, but not rigid. He makes cutting-edge technological trends such as waterless industry, energy efficiency, a new generation of green materials and recycling technologies, self-cleaning treatment, and plant-structure fabric seem within reach, without minimizing the challenge of ambitious research and development. Political, scientific, and sociological facts inform his worldview, as he discusses the importance of Nixon’s visit to China in 1972 and its impact on trade.
This observation is followed by questioning China’s ability to continue to create value from manufacturing, and points to the Kuznet curve economic hypothesis that suggests that a society will no longer tolerate the downside of manufacturing—such as pollution—as it reaches maturity. As China quickly approaches this turning point, the country is just as rapidly entering an era of innovation.
Those of us fortunate enough to hear from China experts on a regular basis, have become familiar with the results of economic shifts that accompany large-scale immigration to urban areas. As Edwin points out, these shifts include higher energy consumption, breakdown of family structure, demand for a higher level of education, and a longer life span—and all heavily influence consumer demand, product creation, and the supply chain. Edwin asks, “Where does the American company end and the Chinese company begin?” He points out that personalities and talents are absorbed from one, two, or more cultures, and product production and adaptability will quickly follow. In turn, the supply chain itself must be reengineered because the one we’re using is unsustainable.
“Good Baby” illustrates Edwin’s example of a hugely successful Chinese company and a radical departure from the stereotypical low-wage labor factory. This company’s core capabilities lie in research and development, with eight development centers throughout the world. Operations and production are localized, making it possible to cater to cultural and lifestyle demand for strollers, children’s car seats and furniture. Timbuk2 is another example. This designer and producer of messenger bags is based in San Francisco. With quality production in Guangdong province, Vietnam, and Indonesia, the focus on sourcing all materials within proximity to the factory is central to the company philosophy of lowering energy consumption in transit, and the importance of promoting a transparent supply chain.
The world’s supply chains for apparel and beyond, could do much worse than to adopt Edwin Keh’s vision of the future.