We try to find the best solution for the problem, regardless of whether that solution is in our wheelhouse or not. It ensures our solution has longevity.
Pockets of excellence in emerging countries have helped shed their image as mere sources of cheap hands and low-cost brains. Instead, some of the best businesses in these markets are hotbeds for innovation, producing breakthroughs in raw materials, manufacturing processes and technology. Products redesigned in emerging markets are often cheaper. However, the most innovative companies in these regions have claimed their place in global supply chains by redesigning business processes to do things faster and better and finding new ways to meet consumer needs.
The world’s centre of economic gravity has been shifting towards emerging markets in Asia for some time. Companies in China, the tiger economies in South East Asia, and India are capturing growth due to global investments deeply embedding private companies in global supply chains. Sri Lankan companies aren’t as well integrated into global supply chains, the apparel sector being the most notable exception. The apparel sector’s global competitiveness wasn’t an accident, points out MAS Holdings’ Chief Innovation Officer and Chief Technology Officer Ranil Vitarana.
MAS Holdings manufactures apparel for leading global brands like Nike and Victoria’s Secret, among others. Its group revenue is the equivalent of 6% of Sri Lanka’s exports. Some of its group revenue would be earned at units spread across the world. But Sri Lanka is its headquarters and operations base, where it’s one of the top employers.
Apparel accounts for over a quarter of Sri Lanka’s merchandise exports. Rarely has the success of one industry and one company mattered so much to the country’s prosperity.
Vitarana, who’s been with MAS Holdings since 2000, first as a merchandising manager and now CIO and CTO, recalls how the approach to establishing a competitive advantage had always been different at MAS. From the beginning the company didn’t want to play at the bottom of the price pyramid by churning out vast quantities; that’s not the equation it was going after, points out Vitarana. “Instead, the rhetoric was always about how we can be the number one or number two supplier to our customer, and of wanting to be the supplier of choice. Ideas about how we wanted to differentiate ourselves made us invest in things that other companies didn’t.”
Most apparel exporters in Sri Lanka have long since emerged from a formula of cheap hands and low-cost brains for a competitive advantage. Their supply chains are lean and efficient, and their manufacturing processes were more sustainable; that was the first wave of innovations. In the second wave, MAS was intent on cutting lead times on orders and producing smaller batches of apparel to help the brands, and their customers, reduce costs and wastage. Companies have cut the time to market by shifting their manufacturing bases (nearshoring and onshoring), concentrating their sourcing and introducing new processes.
Now a third innovation wave is underway at MAS Holdings. However, unlike the past waves of innovation, MAS Holdings’ innovation unit, Twinery, where groupwide innovation is centralized, is uniquely ahead.
INNOVATION CHOPS RECOGNIZED
During the last few years, Twinery’s breakthroughs have included innovations in products for athletes to improve performance, recover faster and train efficiently, with some innovations falling into a category popularly called Wearable Tech and products designed for women (Femtech) like apparel with functional use during menstruation, pregnancy, menopause or urinary incontinence. It’s also innovating in healthcare industry-related products.
Its innovation chops were recently recognized by global media brand Fast Company when MAS Innovation (Twinery was ranked 18th in the world on its one hundred best workplaces for innovators listing.
“Winning awards is important to us. More than anything else, it helps benchmark ourselves against everyone else,” confides Ranil Vitarana during an interview. “We are trying to create an environment where people can express their creativity and build products and everything that goes with it.”
It’s the nature of innovation to feed upon itself. Innovation in one area of an economy or a supply chain will encourage, rather than undermine, innovation elsewhere. However, innovation, the stuff MAS has gained capability for, isn’t the type widely seen in Sri Lanka.
Lacking an innovation ecosystem to benefit from stacks the odds against success. Vitarana explains that Sri Lanka is hamstrung compared to the talent availability in a global innovation hub city and by its distance from the consumers it serves. “As a result, a person joining a company is more likely not to have an innovation or entrepreneurship background. Unlike in Silicon Valley, where you have hundreds of people you might be able to hire, we have to develop the talent here. Given these many challenges, our success with innovation is quite an achievement.”
MAS is growing accustomed to the spotlight. In 2021 Clarivate – the former intellectual property and science division of Thomson Reuters that tracks scientific advances and patents from around the world – recognized MAS for innovation in the textile industry. Twinery and MAS Holdings are the first Sri Lankan companies to be awarded by Fast Company or Clarivate.
During the last few years, Twinery’s breakthroughs have included innovations in products for athletes to improve performance, recover faster and train efficiently, with some innovations falling into a category popularly called Wearable Tech and products designed for women (Femtech)”
SOFT GOODS
MAS’ founder and now Chairman Mahesh Amalean would rhetorically ask what the difference was between invention and innovation, suggesting that innovation was invention coupled with market adoption.
Twinery, also known as MAS Innovation, aims to do just that, not just innovate but unveil products people want to buy. It was launched in 2013 by combining research and development units from within the organization. In the last couple of years, innovative products developed at Twinery have met the ultimate test of market adoption.
Some products are apparel with a specific function. Others, like Spryng, an FDAapproved active pneumatic compression calf wrap designed to aid recovery with its wave-like pattern, isn’t a garment at all. Since it’s untethered, a wearer can move about without the limitations of wires.
Apparel is a category in retail-speak called soft goods and includes bedding and textiles. Hard goods are a broad range, everything from furniture to electronics. The intersection between the two is an area with plenty of scope for innovation which Twinery explores.
Where Wearable Tech is concerned, Vitarana points out that their first challenge is integrating hard goods like motors and batteries into sports and other apparel. An obvious problem is that electronics, batteries and water don’t mix well. Fabric can get wet and washing with soap and water is the only way to deal with dirty fabrics. Fem-tech is another area in which Twinery has commercialized several products.
Vitarana, an engineer by training, identifies two challenges to overcome before any innovative wearable tech or most other innovative soft products can have mass adoption. “We compete with plastic devices which are generally very precise. Plastic has nice finishes. Our challenge is to bring the kind of accuracies you see in electronics into textile-based products.”
The second challenge for wide adoption is the ability to mass produce. “Electronics production has been automated to such an extent that it can churn out millions of units cheaply. To scale, we need similar unit economics and an ability to mass manufacture. We make a piece of clothing and sell maybe 50,000 units, but a successful electronic item will sell 15 million units at a launch. These are the two big challenges to be unlocked when it comes to making it mainstream.”
MAS has a long history of joint ventures and collaborations with customers including the biggest apparel brands in the world like Limited Brands, owners of Victoria’s Secret, Nike and PVH – owners of brands including Calvin Kline & Tommy Hilfiger”
BEYOND THE WHEELHOUSE
It’s tempting to dismiss such claims of Twinery being world-beating. However, since 2018 Twinery has launched or is in the advanced stages of unveiling innovative products that blur the lines of what apparel, tech or a healthcare company may be expected to launch.
Companies that approach innovation, often do so around their existing strengths or capabilities. Although the term is loosely used, most innovation isn’t entirely new nor does it always involve technology. Successful companies create value by combining their knowledge with those of their suppliers, customers and consumers. This has always been the case.
The idea of open innovation extends this, emphasizing it over the falling relevancy of the corporate R&D lab. They will attract collaborators from universities, suppliers and outside investors by offering a share of rewards.
MAS has a long history of joint ventures and collaborations with customers including the biggest apparel brands in the world like Limited Brands, owners of Victoria’s Secret, Nike and PVH – owners of brands including Calvin Kline & Tommy Hilfiger.
However, the top end of the apparel industry was becoming knowledge-based, and research and development had to give way to a more open and democratic innovation model. Clever ideas have always been around, especially among consumers, but silo company research structures were too closed to pick them up.
“We try to find the best solution for the problem, regardless of whether that solution is in our wheelhouse or not. It ensures our solution has longevity. We partner with other people and companies with the right skills and capabilities. That whole attitude makes our approach unique.”
Solution means a lot more than just the physical product. It might be one at the right price or with a viable lead time. “In today’s world; these solutions are becoming much more complex,” Vitarana says.
Moving to an open approach to innovation proved more effective for MAS. Insights then can come from bright sparks anywhere, as they soon found out.
“There are multiple parties, skills and capabilities that are needed to make this possible. And it’s very difficult for you as an organization to have everything in your wheelhouse. It’s difficult to be a good digital player, a good data player or a good material science player.”
“But what this doesn’t mean is that you want to go and do everything outside. You can’t outsource everything, you have to make sure that you truly understand what your USP is, and invest behind it.”
Commercializing innovation can happen in one of four ways for MAS. The first is to partner with another company with the technology. Licensing technology to industries other than apparel, a long-term aim, is a second option. Providing innovative solutions to existing customers is the third and the fourth option is to launch MAS brands.
PEOPLE AT THE CENTRE
Fast Company’s Best Workplaces for Innovators celebrates company cultures that empower employees at all levels to improve processes, create new products, or invent new ways of doing business. Its annual list of the best workplaces for innovators ranked 100 companies based on recent evidence. MAS’ innovation unit, Twinery, was listed as 18th in the world for 2022.
Between January and March 2022, more than 900 companies applied to Fast Company’s Best Workplaces for Innovators. As the application rules required, they detailed a particular example of internal innovation and answered questions about investment, company-wide programmes and processes, and workplace culture. Global consultancy firm Accenture partnered with Fast Company to evaluate the applications.
Vitarana says with pride that the affirmation from support systems at MAS and Twinery makes it possible for them to continue to be innovative and is a testament to the leadership and the teams he leads. “So we are not killing that spirit. That’s probably what this win signifies,” he adds.
The spotlight on Twinery fell at a difficult time for Sri Lanka due to its sovereign debt crisis. Between the Easter Sunday bombings and now, many talented Sri Lankans have left the country. “To be able to achieve something like this, for me, speaks so much of what we