Listen in as Calderon Textile’s Founder and CEO Azher Khan and Ammar Khan, Vice President of Sales and Marketing, discuss the challenges the textile industry faces moving into the new decade, and how they’ve positioned their company not just to embrace those challenges but to take a leadership role in assisting CSC customers to achieve greater success in their own businesses.
What are some of the emerging trends in the textile industry and how do you take advantage of them?
Azher: I would like to provide a historic perspective to this question and then Ammar can take the more current side. When Calderon Textiles started in 1983 all towels were made of open-end cotton yarn. Calderon was one of the first companies to introduce ring-spun cotton towels. Now the trend is to make products with man-made fibers such as polyester. We have introduced products that contain polyester but feel like cotton. We have been developing new technologies that, for example, ensure that the print on patient gowns lasts as long as the life of the fabric. We call this Color-Lock technology.
Ammar: As a millennial I have a different perspective. The new decade poses a lot of interesting concepts that have been formalized over the last year or two. I think the trend that our industry will have to take advantage of is “big data.” Big data is a not just a couple of buzz words, but it is an imperative topic for companies to begin to harness the power of the data that we have to help drive our decisions and our internal processes. If we are not relying on the datasets and that information, we will simply be guessing at what we feel the emerging trends are rather than following what the data presents to us. Calderon is currently looking into more software solutions to help manage the process of transforming data into information and it is critical for our industry to begin to utilize the information that is available.
As we head into the new decade, what are some the challenges facing the textile industry?
Azher: Currently, the big challenge is that this is a geopolitical business—an international business affected by geopolitics and the trade conflicts that are happening with different countries. We regularly send letters out to our customers briefing them on the trade situation. We also prepare ourselves in terms of having inventory ahead of any tariff that may be imposed. For example, there have been, in my time with Calderon, three times where there’s been a cotton crisis, and every time we have purchased ample supply to avoid the higher prices that come with the cotton crisis. And I’m very proud to say that we have been able to mitigate most of the increases. So, our customers have benefited from us having that inventory ahead of tariffs and high cotton prices. And you know, inflation and recession are always on our minds. We’re talking about in 2020, towards the end, that there may be even be some recession. Those concerns are always with us, as they are with our customers. We work to remain a very nimble company that prepares itself for these challenges.
Ammar: I agree that geopolitical issues are a huge threat to our business. Beyond the traditional problems, though, when I think of this question, I think of all the new types of “new school problems” facing our industry. The current business environment is evolving fast and at a faster pace than before. The service industry is also more challenged with the rise of transparency due to the emergence of accountability on social media. Keeping up with the pace of commerce within our target markets, meanwhile, and staying relevant will be very important. So, companies need to make sure that they can remain agile, that they have workflows that match the expectations for high responsiveness, and that this new set of documented procedures and workflows will be able to support the needs of the new customers’ expectations.
What do you see as the biggest challenge CSC customers will face in the new decade and how can suppliers help to solve it?
Ammar: The biggest threat is from the national chains and the national chain strategy to commoditize our business. What these national chains would like to have consumers believe is that a bar mop is any bar mop, and a delivery service is any delivery service. But the key to cost effectiveness is looking at the entire acquisition cost over the span of the product’s life as opposed to only the one-time product cost. What we have to do is to prove to the end users and the end customers that the independent nature of our CSC members, who care about the identity of the businesses, is worth the price. That is going to be done through differentiation of their products, demonstrating that they have the correct product for the correct target market, and understanding that it’s not that a product is under spec or over spec but correctly spec’d. And that is going to be the result of analyzing the data that’s available to them and to their customer base. Additionally, the value-adds that independents bring are going to have to be brought to the forefront and more emphasis placed on customized service rather than just à la carte delivery services.
Azher: So probably another of the biggest challenges that Calderon is facing and, I believe, our customers are facing, is workforce development. It is difficult to attract and retain good employees. And that’s why our interview process is a two-way interview, so that they are going into employment for Calderon knowing what our company culture is and understanding our company, and we can plan on having them be long-term employees. Finding the right people, hiring them, and retaining them is a challenge, although we are very proud that there are many staff members that have been with us for twenty even thirty-some years.
Why is it important to educate those in the linen industry? Why do you spend so much effort on it?
Azher: One of the biggest challenges any industry has is communication. But education and sharing information with the customers has been a hallmark of Calderon Textiles. We believe in communicating what it takes to manufacture textile products. The more educated our customers are the better the relationship is. It’s not just a word I’m using, but we truly mean it, that we want to create that partnership with our customers. And for that reason, we are always trying to educate.
Ammar: Okay, so I would agree that we want to make sure our customers understand our products, but also our processes. In the future, as we all become more supply-chain sophisticated, we’re going to need to find those opportunities for different types of thought processes to achieve different levels of cost savings. Processes that we weren’t able to do five years ago, we can now, and that’s through a variety of different means, but one of the bases is that we understand each other, we understand our products. Because if we don’t, we’re going to miss out completely on collaboration.
Azher: At the 2020 CSC convention, I will be speaking to explain what it takes to bring textile products from overseas to our distribution network. Ultimately, we want the customers to see and understand the processes from the beginning stages of cotton to getting the product delivered to them, and what the challenges are, what the various facets of textile production and supply are. I’m looking forward to sharing the textile story with them.
Ammar: Another of our big initiatives is to help educate not only the customers we directly interact with but people across their entire organizations. So, for that we have built a video series that focuses on the basics of textiles manufacturing and the supply chain. It’s a five-part video series with study guides and quizzes that allows entire organizations to internally train staff about the products they are exposed to. Education is definitely the key and a focus of what we are trying to bring to our customers’ organizations.
I believe the key going forward in our textile industry is to relentlessly collaborate. And the thing that makes me really excited is to work on this with so many different unique customers, to focus on their unique challenges and their markets. I believe we can collaborate to evaluate product offerings to make sure they’re in line with what the market will bear in terms of price, product, and performance. I believe that there is ample space to collaborate, find cost savings by better aligning our businesses together. Ultimately, having better aligned processes will enable both the customers and the suppliers to have that better view of what the next three years will look like, what the next five years will look like, and the ten years after that as well.
Why is Calderon taking the lead in partnering with CSC members? What benefits do you get in being a supplier for CSC businesses?
Azher: It’s really rewarding to work with independent laundries because you are dealing with the owners who are the decision makers. They do not operate in an “ivory tower,” and they do manage their companies on a day to day basis. I learn from them all the time. It becomes a two-way street with CSC members where we strive to understand their challenges, and we work on solutions for them. I am repeating myself, but it really is very rewarding to solve a problem for them.
Ammar: Working in this industry and specifically with independent laundries, I have the same word to describe it—rewarding. The biggest benefit of being a supplier in CSC is that all of these independent laundries are family-owned businesses. And we are a family-oriented company. We don’t have tons of rules on the walls to follow, it’s more about just doing the right thing. And this kind of family attitude leads towards long-term customer retention. The takeaway from this is that both the CSC members and Calderon are focused on adding long-term value to the company and to finding mutually beneficial partnerships.
Azher: Yes, and for me that long-term partnership is also rooted in a friendship relationship with the owners in the CSC companies. That relationship is what makes it where I personally would be willing to do anything possible to be of assistance to them, basically willing to fall on the sword for my customers, because it is that friendship relationship that has been built over a number of years. That’s why I have my cell phone number on my business card, so they know I’m always reachable to them no matter what the circumstances might be. Having that relationship and friendship is very important. Getting together once a year at the CSC conference is very important, also. Besides being a time for education, it’s a time to be able to meet more on social terms and continue to add to those relationships.
Ammar: You know, working with independent, family-owned companies, we often find that we have shared values and ethics and we share wanting to do the right thing. This makes it much easier for collaboration. When you have a common ground, common trust, and future aspirations, not just for your current role or for your generation but the generations that continue to come, these aspects together make working in such a space so rewarding for us.